Caleb Silver, editor in chief at Investopedia, my man, great to have you here.
And for all the times you and I have done this, I'll say we don't look up and quite see this style board more broadly.
What are you seeing in these markets?
Quite the rally today.
Are you're not entertained.
This is as big a relief rally as we've seen in a long time.
Again, as Peter just said, oversold turns into overbought real quick these days, and we're seeing an individual rally broad based across sectors except for energy and defense, which have been the leaders.
But if you look at semis, semis had a huge day on semiconductor, up 12%.
Looking at other semiconductor stocks, up 11, 10%, and you wonder why individual investors have a hard time selling their favorite stocks.
You get a 6% rally in a stock like Nvidia today.
Hard to let go because when the relief rally comes, it comes from the big stocks first.
I mean we're taking a look right now.
You and I at semiconductors, we're seeing Intel up 7%, Broadcom AVGO up 5.5%.
We are entering, if we take a step back.
From this day or this week, historically the weak part of the 4 year cycle, especially as we hit kind of this weird spot of Q2 in a midterm election year.
What does history tell us and how are day to day investors preparing for the road ahead?
Yes, not to be chicken little this far away from Thanksgiving, but these are the worst two months typically of a midterm election year.
It gets chaotic and it's been nothing but chaotic for the first quarter.
So expect more volatility if it wasn't this geopolitical event and the war in Iran.
Might be something else.
There's going to be a lot more headlines.
Individual investors have remained pretty resilient, though, not a lot of dip buying as we've seen in other cycles because of the unpredictability of oil prices, but still hanging in there with their allocations and doing some buying outside of the defined contribution plans as well.
I want to get your sense on what are among the most popular names as you and I have had these conversations over the years.
We see that retail investors, they gravitate to the Nvidias of the world, the Microsofts of the world.
They had a very strong session today, but they've really been beaten down year to date.
Are those still the strongest, most popular names that day to day investors are keeping their eyes on?
Yes, and if you look across the different ways we track this, whether it's Vandertrack or some of the other trackers, you see that it's the big stocks.
It's obviously Nvidia.
Tesla still has a huge fan base that wants to buy the dip.
That stock is down 20%.
It's on sale for those investors right now as usual, but a lot of the semi-stocks that have.
And beaten down and the software stocks, they're getting a bid from individual investors, but they stay faithful to the home cooking, the stocks that brought them these great returns over the last 3 years.
I don't expect that to change.
I know day to day readers of Investopedia, they're flocking to it as an outstanding resource to learn things like backwardation.
What is top of mind?
Why are people looking up that term right now?
That's exactly what we're seeing in the oil market right now.
Remember, oil, like all commodities, trades on the futures market, but Also the spot price.
When the spot price, the price you pay for oil delivery today, is higher than the future prices, that's what we call backwardation.
The opposite is contango.
No, not a beautiful city in the river plate or a dance, but that's the normal state of commodities where you'll pay less today but more in the future because of storage costs.
That's not what's happening, and that tells you that oil traders at least believe that this war in Iran will not last very long.
Last, I still got some time.
Fibonacci retracement.
We know that from our friends in the CMT Association.
Interesting to see those technical analysis tools work their way onto the computer desktops of retail investors.
Seems like they're trying to learn a lot more about at least the technical side of it.
Who would have thought that an Italian mathematician from the Dark Ages would make an appearance in today's chaotic, volatile markets.
But the Fibonacci retracement shows where technical analysts think the next level down might have. for the S&P 500 and it was down about 9% from Friday's close, so they were thinking if it continued to fall, it had another 9% to go before it hit that retracement level.
The Fibonacci sequence, of course, famous for the rabbits.
We had that big relief rally today that changes the calculus.
The math needs to look a lot differently right now, but the relief rally did relieve some pressure in the markets.
Caleb Silver, EIC and Investopedia, my man, thanks for being here to kick off the show.
Nice to have you.
