THE 50 IS NOW RESISTANCE" - NVIDIA Beats, 49 Breakdowns vs 17 Breakouts

 

 Market Sector Tracker - Gary Kaltbaum's "Investor's Edge"

Tracking leading/lagging sectors, top stocks, and market positioning

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📅 Wednesday, November 19, 2025 (Adam Sarhan Guest Host)

"THE 50 IS NOW RESISTANCE" - NVIDIA Beats, 49 Breakdowns vs 17 Breakouts

Market Action

• Dow: +47 points to 46,138
• S&P: +25 points to 6,642
• NASDAQ: +131 points to 22,564
• Russell 2000: +3 points to 2,352
• Pattern: Huge rally at open, hit 50-day MA, sold off hard, weak close in middle-to-lower half of range

The 50-Day Becomes Resistance: "We rallied hard right at the open, came very close to that 50, if not touch the 50... and then sold off hard, right away. So clearly there's some resistance right at the 50-day moving average for now." First time below 50-day since April/May.

NVIDIA Earnings (After Close):

• Q4 Revenue guidance: $65B (vs $62B estimate) - BEAT
• Q3 Revenue: $51.2B (vs $49.34B estimate) - BEAT
• Gaming revenue: $4.3B (vs $4.42B) - slight miss
• Stock: +3-3.5% after hours
• Jensen Huang: "Blackwell sales are off the charts"
• Cloud GPUs: Sold out
• Q3 Networking revenue: $8.19B (vs $7.7B) - big beat

Leading Sectors 🟢

1. Semiconductors (SMH) - Up 38% YTD (down 9% from high), bouncing on NVIDIA news
2. Leadership still intact - But under pressure

Lagging Sectors 🔴

1. Cybersecurity - Palo Alto Networks (PANW) down 6% after hours on earnings
2. Crypto/Bitcoin - Turned negative for the year, down 35%+ from highs
3. Broad market weakness - See internals below

Leading Stocks 🚀

NVIDIA Earnings Beat:

• Stock +3-3.5% after hours
• All key metrics beat (revenue, guidance)
• "Blackwell sales off the charts"
• Cloud GPUs sold out

Lagging Stocks 📉

Palo Alto Networks (PANW):

• Down 6% after hours on earnings

Bitcoin:

• Turned negative for the year (Adam believes yesterday)
• Down 35%+ from recent highs

Adam's Market Internals Analysis 📊

Critical Deterioration (using BreakoutsAndSetups.com tool):

Breakouts vs Breakdowns:

• Breakouts today: 17
• Breakdowns today: 49
• Adam: "More stocks are breaking down than breaking out. Not good."

Movers Up vs Down:

• Movers up: 192
• Movers down: 299 (almost 300)
• Adam: "There's more movers down than stocks moving up... there's weakness there"

Gaps:

• Gapping up: 15
• Gapping down: 12
• "Even... interesting to see that number not skewed more bullish" on up day

New Highs/Lows:

• 52-week highs: 52
• 52-week lows: 131
• All-time highs: 24
• All-time lows: 33

Pullback Metrics:

• S&P 500: Only 4% below all-time high
• NASDAQ 100: 5.8% below all-time high
• Dow: 4.7% below all-time high
• Russell 2000: 7.7% below recent high (deeper deterioration)

Adam's Positioning 💰

• Playing defense: "I'm playing a little defense here. I don't want to push it. Give the market some time."
• Watching 50-day MA: "Above the 50, bueno. Below the 50, no bueno."
• Waiting for confirmation: Wants to see market get back above 50-day with accumulation days (up days on heavy volume)
• Tool: Uses BreakoutsAndSetups.com for real-time breakouts/breakdowns/setups/movers (free trial available)
• Extended hours tracking: Monitors after-hours breakouts, breakdowns, stocks up/down

Crash/Correction Outlook 🎯

Adam's technical framework: The 50-day moving average is now resistance after market tested it at the open and sold off hard. This is the first time below the 50-day since April/May. Pullback is normal - "5% pullbacks in S&P happened historically several times a year. They're garden variety." Defines stages: under 10% = pullback, 10-19% = correction, 20%+ = bear market. Currently just pulling back (S&P only 4% off highs). NVIDIA beat should help tomorrow, but watching whether it sticks or sells off. Key: "Three out of four stocks follow the broader market" - stay in harmony, don't fight the tape. If market gets back above 50-day with accumulation days, "could take us into strong end of year."

Key Observations 💡

Adam's Technical Teaching:

• 50-Day Rule: "Above it is good. Below it, not good. That simple."
• Breakout Definition: Stock moves sideways 3 months between 50-55, breaks above 55 on huge volume = big institutions buying
• Breakdown: Opposite - breaks below support on volume = institutions selling
• Why Breakouts Matter: "Not all breakouts lead to huge rallies, but all rallies begin with a breakout for the most part"
• Historical Leaders: Palantir, Amazon, Apple, Tesla, NVIDIA all had breakouts, many broke out multiple times

Probability vs Possibility:

• "Anything can happen. But what about the probabilities?"
• "Stack the odds of success in your favor"
• Use 50-day as guardrail for probabilities

Emotional vs Rational Decisions:

• Adam's book: "Psychological Analysis" (#1 on Amazon for 3 months)
• "Most of us make emotional decisions and think we're making rational ones"
• "Default setting: emotional decision. Then find logic to justify it" (confirmation bias)
• Three Questions Before Entering: Where will I exit if wrong? How much will I risk? Know most trades don't work (keep losses small, let winners run)
• Post-Analysis Tool: Print trades, write why you bought/sold, keep winning/losing folders for 12-18 months

NVIDIA Context:

• "What's good for GE is good for the market" (old saying) - now it's NVIDIA
• "Institutional sweetheart or darling of AI stocks"
• Makes chips that power all AI, also used for crypto
• Not up 15-20% after hours, so "not expecting much tomorrow"

Russell 2000 Warning:

• Down 7.7% from highs (vs S&P only 4%)
• "Clearly big cap tech stocks have been holding up the market, under there there's been deterioration"

Palantir Trigger:

• "Reported earnings in early November, gapped down"
• "Since then, the market and AI trade specifically have been under pressure"

Market Definition:

• "Market, folks, is a market of stocks. It's a stock market, but it's also a market of stocks."

Newton's Law Applied:

• "An object in motion stays in motion"
• "Find leading groups... trend is your friend"
• "Most pullbacks in bull markets are just that - short in size and short in scope"