- Statistics and narratives blind the weakest investors.
- The AI story is getting so boring.
- The Dow and the S&P 500 are both hitting new all-time highs.
Mark Twain famously said there are three kinds of lies: “Lies, damned lies, and statistics.”
It was his way of exposing how easily numbers can be twisted to prop up a weak argument.
We see the same thing every day in today’s markets.
People take a ratio of new highs to new lows and call it “breadth.”
They grab the percentage of stocks below some arbitrary moving average and declare “weak participation.”
They invent an oscillator, slap someone’s last name on it, and suddenly it’s a “warning signal.”
None of that replaces the only thing that actually tells you the truth: going in and looking for yourself.
But humans love shortcuts. They’ll do anything to avoid the work.
Instead of just spending an hour flipping through all the charts, they’ll waste an entire career attempting to build tools to avoid flipping through those charts.
It’s a remarkable trait – one we happily exploit.
Because at TrendLabs, we have an unfair advantage: We actually do the work. We go through the charts. We look for ourselves.
Nobody else wants to.
Good.
If market breadth is supposedly “so weak” and “nothing is going up,” then riddle me this:
How did the equally weighted S&P 500 just finish the month at its highest level in history?
A miracle?
Or – hear me out – maybe it’s just math.
Those of us who actually count have been saying the same thing for months: This isn’t deterioration; it’s sector rotation.
Nearly two-thirds of NYSE stocks are in uptrends. Strip out all the so-called “Magnificent 7” from the S&P 500, and guess what?
The rest of the index is still making new all-time highs.
Go look for yourself. Remove Alphabet (GOOGL), Amazon.com (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA) from the equation.
The market is still ripping:
But they’ll keep lying to you with “statistics,” insisting those seven stocks are the only ones going up.
Anyone willing to spend five minutes actually looking at charts would see how absurd that is.
The chart above shows the truth:
It is mathematically impossible for the equally weighted S&P 500 to hit new all-time highs if only seven stocks were going up.
Turns out a lot more are.
Don’t Fight Papa Dow
The way I learned it,
you never fight Papa Dow.
The Dow Jones Industrial Average is still the world’s most important stock market index, and it just closed the week and the month at fresh all-time highs.
And it’s not just the price-weighted version.
As you can see in the chart, the equally weighted Dow also just finished the week and the month at its highest levels in history:
So why does this matter?
Because this is what dictates our behavior as traders and investors.
Every day, every week, we’re trying to answer the same simple question:
Should we be spending our time looking for stocks to buy, or should we be spending our time looking for stocks to sell?
The weakest minds fall for whatever lazy narrative is trending. Right now it’s AI, 24/7.
They can’t let it go. They won’t do the work. And because of that, they’re blind to everything else that’s working – which, by the way, has nothing to do with AI.
The lesson?
Don’t be a simp.
Look past the narrative. Look past the noise. Go look for yourself.
You’ll find more opportunities than the lazy crowd even knows exists – and that’s where the real money is made.
This Week in Everybody’s Wrong
On Monday, we opened Thanksgiving Week by expressing our gratitude to the short sellers.
The ability to profit from falling stock prices is one of the many features that makes U.S. markets great.
And the more short sellers there are, the better it is for us.
On Tuesday, we talked about traditional brokerage firms opening the door to sports-betting markets for their clients.
Plenty of people want you to believe sports gambling and trading public securities are the same thing.
Nope; sports gambling is not investing.
On Wednesday, we did the math.
More stocks are going up, not fewer, and Transports are confirming Industrials.
If Charlie Dow were here today, he’d be the first to tell you it’s a bull market.
On Thursday, we discussed our environment and why it matters.
Weighing the evidence and stacking the probabilities is the best way to put ourselves in position to win.
If your system can’t adapt, you’re going to fail.
On Friday, we celebrated a new set of fresh monthly candlesticks.
Nothing in my entire process is more valuable than reviewing monthly candlesticks.
Whenever in doubt, zoom out.
On Saturday, Quantitative Analyst Grant Hawkridge shared another example of what it means to always be improving.
We couldn’t do what we do around here without Grant.
And it all begins with curiosity.
Have a great Sunday.
We’ll see you Monday morning…
Stay sharp,
- Monday:
- Following a double beat, Ross Stores $ROST soared to a fresh all-time high with its best earnings reaction since 2022. In addition to the strong quarter, the management team raised its forward guidance ahead of what they believe will be a strong holiday season.
- The $185B software giant, Intuit $INTU, posted a double beat and rallied 4%. Revenues soared 18% year-over-year, led by the global business solutions and consumer segments.
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- Tuesday:
- There were no S&P 500 earnings reactions to cover, so we wrote about one of our favorite growth stories in the market: robotic surgery.
- The leaders Intuitive Surgical $ISRG and Globus Medical $GMED crushed market expectations and were rewarded with historic earnings reactions.
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- Wednesday:
- The $33B scientific & technical instruments stock, Keysight Technologies $KEYS, rallied 10% on the heels of a double beat. Free cash flow hit a record high of $1.3B, and the company is using it for acquisitions and share buybacks.
- Analog Devices $ADI rallied over 5% after the company beat expectations across the board. Revenues increased 26% year-over-year, led by the industrial segment, which grew 46% over the same period.
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- Friday:
- Following a mixed earnings report, Dell $DELL rallied 5.8% and snapped a four-quarter beatdown streak. AI server orders and shipments reached all-time highs, with $12.3B in Q3 orders and $5.6B shipped, and $30B in AI server orders year-to-date.
- The farm & heavy construction equipment giant, Deere $DE, was punished for beating expectations. Overall sales and earnings declined year-over-year, but the construction and forestry segment increased its sales by 27% year-over-year.
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| What’s happening next week |
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| The main themes next week are technology, retail, and Canadian financials. At the top of our radar will be Salesforce $CRM, CrowdStrike $CRWD, and American Eagle $AEO. We’ll also be watching: |
- The Canadian financial giants Bank Nova Scotia $BNS, Royal Bank of Canada $RY, and Toronto-Dominion Bank $TD.
- One of Riley’s favorite names at Godspeed, Credo Technology $CRDO.
- The dollar stores Dollar Tree $DLTR and Dollar General $DG.
- Discretionary names such as Kroger $KR, Macy’s $M, Signet Jewelers $SIG, Five Below $FIVE, and Ulta Beauty $ULTA.
- And a handful of tech stocks like Snowflake $SNOW, MongoDB $MDB, UiPath $PATH, C3 AI $AI, and Rubrik $RBRK.
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| There will be a ton to unpack next week in the Daily Beat. Now, let’s dive into the top setups heading into next week. |
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| Here’s the setup in CRM ahead of Wednesday’s earnings report |
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Salesforce is expected to post $10.27B in revenue and EPS of $2.86 after Wednesday’s closing bell.
Heading into the report, all eyes are on 225. This is the neckline of what has shaped into a massive multi-year distribution pattern.
The bears want to blast through this level, print fresh multi-year lows, and initiate a brand-new primary downtrend.
And as one of the world’s largest software stocks, a breakdown wouldn’t bode well for its peers. |
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| Here are the past three years of earnings results & reactions for CRM |
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Salesforce has consistently beaten headline expectations, delivering solid top- and bottom-line growth. Despite this, shareholders have been punished for three consecutive earnings reports.
This negative sentiment towards the company’s earnings events confirms the bearish trend we’re seeing in the technicals.
Until we see a significant change in the technicals or fundamentals, we have a bearish bias toward CRM. |
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| Here’s the setup in CRWD ahead of Tuesday’s earnings report |
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CrowdStrike is expected to report $1.21B in revenue and EPS of $0.94 after Tuesday’s closing bell.
Heading into the report, all eyes are on 517. This level was resistance earlier this year before the stock broke out to fresh all-time highs.
Since then, the upside momentum has stalled, and sellers have pushed the price back below this key level of interest.
The most bullish scenario would be a gap-n-go above this level.
We think the more likely scenario is that the bears step in and drive the price lower. |
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| Here are the past three years of earnings results & reactions for CRWD |
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Last quarter, CrowdStrike beat expectations across the board and snapped a three-quarter beatdown streak.
However, the company has reported negative bottom-line growth in back-to-back quarters. This is a problem…
If the bulls want to experience another streak of positive earnings reactions like August 2023 to August 2024, the fundamentals will need to improve significantly.
And based on the market’s expectations, that’s unlikely to happen soon. |
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| Here’s the setup in AEO ahead of Tuesday’s earnings report |
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The market is looking for American Eagle to report $1.32B in revenue and EPS of $0.44 after Tuesday’s closing bell.
Heading into the report, all eyes are on 20.50. This marks a key level of polarity. It was support in 2024, and it has served as resistance in 2025.
Given the setup, we wouldn’t be surprised if AEO makes a gap-n-go move next week. |
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| Here are the past three years of earnings results & reactions for AEO |
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Last quarter, American Eagle snapped a remarkable nine-quarter beatdown streak, which was one of the longest in the market at the time.
And it did so decisively… The stock rallied nearly 40% in a vertical line.
This is all thanks to the sultry Sydney Sweeney and the “Sydney Sweeney Has Great Jeans” advertising campaign.
But there’s more to the story – check out what our retail expert, Jeff Macke, wrote about the situation.
Next week’s report comes down to denim sales. If the company delivers good numbers, we expect shareholders to be rewarded for the earnings event.
Happy Sunday! |
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jog on
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