00:00 Speaker A
One red flag that Goldman Sachs highlighted over the weekend, narrow market breadth. Uh, break that, uh, what that actually means and is it a red flag to you?
00:14 Michelle Schneider
Well, what they're referring to is only 63% of the market is over the 200 day moving average. And so we have another to overuse a word that we've seen a lot in the first half of 2025, bifurcation potentially happening. And I think that that could be a concern. Um, but there are certain factors obviously from a technical standpoint we have to watch. And one of them would be how the retail space is doing relative to the semiconductor space because we've seen that spread continue to widen where growth just keeps leading and leading. We had a lot of people think that value was going to be the thing this year and we haven't really seen that take off. So I would look for and I like to use XRT as my indicator because it's discretionary and also uh consumer staples. I'd like to see it stay in the game here at least at around 78, 80 if we're looking at a chart. And if that's the case, then this red flag seasonally, we're a little bit in a weak period end of July, but it shouldn't be anything more than a maybe a good correction and maybe a buy opportunity.
02:10 Speaker A
Michelle, what sectors are you seeing overbought conditions?
02:15 Michelle Schneider
Well, one could argue right now that some of the metals that have really rallied tremendously over the course of years, not just this year, might be at a bit of an overbought period. Like, for example, you know, silver got to almost 40 overnight, can't quite make it through. Gold has been struggling to get back over 2400. Copper had a big move. Um, as far as the rest of the market right here, I mean, you have to always wonder whether something like Nvidia is overbought, but we know with something like Nvidia just is the reign supreme. So I wouldn't even venture to say that. In terms of the overbought conditions, there's so many things that are so undervalued at this point relative to the things that are overbought. That's what I would choose to focus on here. What has a chance to go higher? And I think the energy space is probably one of the biggest areas that I'm focused on right now.
03:37 Speaker A
Christopher, where do you see pockets of undervaluation?
03:41 Christopher
Well, I I think she just talked about it. The energy is probably the one sector that has lagged the market significantly. And I I I would say even the the the consumers, consumer durable, not durables, consumers sector has probably lagged the market just as much, not to the same extent, but significantly. Those are the two areas of the market that are undervalued. Having said that, I think in this sort of a market, focusing on undervalued sectors, again, may not work out according to plan.
