Healthcare and financials lead, says CappThesis’ Frank Cappelleri

Frank Holland (Anchor) 00:00.110

we're gonna start with this mag seven chart right

Frank Holland (Anchor) 00:01.990

so take a look at this chart i want to get your take

Frank Holland (Anchor) 00:04.230

on something i think is interesting is that this part right here we haven't seen the max seven hit a new high since all the way back in october

Frank Holland (Anchor) 00:10.150

what are the charts telling us about the path forward

Frank Cappelleri (Founder) 00:11.950

that's right i think it's telling us that we're about to have that happen

Frank Cappelleri (Founder) 00:14.510

this is what we call cup and handle pattern it's a bullish formation

Frank Cappelleri (Founder) 00:17.550

what you do is have it break out have a measure move that would get us there now

Frank Cappelleri (Founder) 00:21.550

of course it all matters what's happening underneath the

Frank Cappelleri (Founder) 00:23.710

surface so we know some stocks are doing very well tesla so forth and so on but what's

Frank Cappelleri (Founder) 00:27.430

interesting about the mag seven is that we haven't had move in unison for a quite some time

Frank Cappelleri (Founder) 00:32.190

so three of them i'm looking at is amazon meta and microsoft look

Frank Cappelleri (Founder) 00:35.510

at those charts that kind of went back and forth recently

Frank Cappelleri (Founder) 00:38.630

but that happens this is what we expect we've seen breakouts before like this right

Frank Cappelleri (Founder) 00:44.030

and i expect the same thing to happen again now is

Frank Holland (Anchor) 00:46.150

there one stop within the mag seven that you need to see really outperform the broader market in order to push this max seven ETF and just that group of stocks higher in the new

Frank Cappelleri (Founder) 00:54.790

year other than the last three we just talked about of course in the video she's been flat for you know if number of few weeks to months

Frank Holland (Anchor) 01:00.630

as well alright we're gonna move on to your next chart right now clear that out for us frank

Frank Holland (Anchor) 01:04.190

taking the next chart i believe it's the XLV we're looking at right here right so this

Frank Holland (Anchor) 01:07.150

is the healthcare ETF a lot of talk about healthcare recently it's recently been

Frank Holland (Anchor) 01:10.390

led by drug makers is there a good thing or a bad thing

Frank Holland (Anchor) 01:13.390

i know they had some negotiations with the white house about prices and a few other things

Frank Holland (Anchor) 01:17.870

is that positive and is that going to lead to a positive trend for this ETF

Frank Cappelleri (Founder) 01:21.350

what has been P J P E T F were pharmaceuticals up thirty percent in four months

Frank Cappelleri (Founder) 01:26.400

X O V up twenty percent in four months which is the biggest four month move in its history

Frank Cappelleri (Founder) 01:31.430

if recall was here in mobile exchange back in august talking about reverting move

Frank Cappelleri (Founder) 01:34.950

it didn't happen until august but hey rehab that we are back here

Frank Cappelleri (Founder) 01:37.990

so i think eventually you get a breakout i like to see more consolidation first

Frank Cappelleri (Founder) 01:41.590

kind of like we're talking about with the last chart maybe a higher low here have more digestion come up but i think eventually see a

Frank Holland (Anchor) 01:47.350

breakout i want to put out for the audience though the last chart was a a year to date chart i believe it was going by

Frank Holland (Anchor) 01:51.390

months this one 's going by year so this period of time is a lot longer than the other period of time we were looking at the

Frank Holland (Anchor) 01:56.550

fact that you're seeing this this move right here what does that say to you about this trade

Frank Cappelleri (Founder) 02:00.870

was that a great comeback and of course no one wanted to go in healthcare for a longest

Frank Cappelleri (Founder) 02:04.150

time we have very sharp move to the upside now

Frank Cappelleri (Founder) 02:06.910

now everyone loves it it's maybe we need a more of digestive phase before we see the breakout

Frank Holland (Anchor) 02:10.990

all right as we do our third chart of this frank and frank segment dealers

Frank Holland (Anchor) 02:14.070

choice which chart do you want to look at next

Frank Cappelleri (Founder) 02:15.910

here we go XLF financials

Frank Cappelleri (Founder) 02:17.790

and as we can tell here another period here where we've seen a potential breakout to

Frank Cappelleri (Founder) 02:22.430

new highs and again we're going all the way back two thousand

Frank Holland (Anchor) 02:24.590

eleven you were going way back on this way back way back but

Frank Cappelleri (Founder) 02:26.670

what do we see a pattern that continues to repeat long

Frank Cappelleri (Founder) 02:30.070

consolidation breakout new all time highs most

Frank Cappelleri (Founder) 02:32.390

important thing follow through follow through

Frank Cappelleri (Founder) 02:34.550

talking about follow through for years so

Frank Cappelleri (Founder) 02:36.990

if that is going to be repeated this could just be the beginning stages of that OK could

Frank Holland (Anchor) 02:40.990

be the beginning stages i want to ask you since we're going all the way back

Frank Holland (Anchor) 02:44.710

how much of this upside movement is led by the idea of rate cuts

Frank Holland (Anchor) 02:47.750

because certainly here one factor in this upside move on this end of the chart has been the fed cutting rates

Frank Cappelleri (Founder) 02:52.800

i think it's a big part of it but if you look back to what's been going on here you know there's been you know rates moving lower and higher so i

Frank Cappelleri (Founder) 02:58.230

think it's a big part of it but you know you have financials second biggest sector in the whole SP five hundred

Frank Cappelleri (Founder) 03:04.230

so eventually need that to be part of the leadership role going forward all right

Frank Holland (Anchor) 03:07.870

so again similar questions to the mag seven

Frank Holland (Anchor) 03:09.990

is there one stock in this group that we need to see do a breakout outperform the market outperform the XLF to continue to push the financials higher in the new

Frank Cappelleri (Founder) 03:17.670

year yes JP morgan which is the second biggest stock within the XLF and obviously

Frank Cappelleri (Founder) 03:22.630

right there and it looks very similar to this now if you're looking at a daily chart that's about to break out as well all

Frank Holland (Anchor) 03:27.550

right we're showing the JP market chart right here

Frank Holland (Anchor) 03:29.870

so you're seeing a similar pattern to the ETF here but you're saying this if this shows leadership it's a very bullish sign for the

Frank Cappelleri (Founder) 03:35.390

group exactly so we can see it's about to break out from this again very similar looking pattern

Frank Cappelleri (Founder) 03:39.470

but going all the way back to here really hasn't done much through you know september and october so eventually get that

Frank Cappelleri (Founder) 03:44.550

and again very similar story what have we seen on the

Frank Cappelleri (Founder) 03:46.510

way back here other breakout

Frank Cappelleri (Founder) 03:48.430

breakout breakout and sometimes

Frank Cappelleri (Founder) 03:50.030

it doesn't happen right away you need some periods of back and forth movement finally get that next person

Frank Holland (Anchor) 03:54.630

important to point out this one since april so we're seeing a number of scouts throughout the year