Episode 304: Worst Episode Ever

In this week's episode, David and Ian discuss the current consolidation, what they are seeing out of financials, specifically banks, European financials, industrials, small cap areas of the market, like biotech, and improved breadth. 

Transcript

David 0:39

Welcome back to the Weekly Trend podcast. Today is Friday, July 10th, 2026. S&P 500 currently at 75.41. I'm David Zarling. I'm here with Ian McMillan. How was the 250th anniversary of our independence for you?

Ian McMillan 0:56

It's great. It's beautiful

David 0:58

Yeah. Do any parades,

Ian McMillan 1:00

And

David 1:00

parades or fireworks or sparklers for the kids?

Ian McMillan 1:03

Yeah, parades, sparklers, all the good stuff, all the Americana

David 1:08

Great

Ian McMillan 1:09

The way it should be, right?

David 1:11

Yeah, I gotta give a shout-out to Nebraska. We were in Nebraska for a wedding over the 4th, and wow, they know how to do fire- fireworks there. Legit

Ian McMillan 1:21

Now, do you guys, do you guys have strict laws there?

David 1:24

Yeah, Wisconsin's one of those where a lot of times you have to go over the border to get the good stuff

Ian McMillan 1:31

into

David 1:31

Illinois, Minnesota.

Ian McMillan 1:33

You buy your fireworks from Phibbs

David 1:35

No, their laws are probably stricter. I'm guessing you have to go to like Michigan or Minnesota. I'm not exactly sure. I mean, I love fireworks as much as the next person. I just can't bring myself to spend 1,000, 2,000 on it myself

Ian McMillan 1:50

Oh yeah, for sure not.

David 1:51

But you know, when you got kids in college and potential weddings coming up, kind of seems like a misallocation of capital, even though I like, trust me, love America

Ian McMillan 2:03

You could have, you could have fun for 100

David 2:06

Mm-hmm But I'm telling you, we were at this wedding, which was out in the country. Come over this country road hill, and you could see the whole skyline of Lincoln, Nebraska, and the whole skyline was lit up. It was insane. It was one of the most... I just giggled. It was, like, so shocking. And kudos, man. If you're celebrating, I mean, America is the greatest country in the world, and arguably the history of the world. I mean, nev- never has a society been so self-governed and so wealthy at the same time in the history of the world. Think we could be tha- thankful for that. Did you see the fireworks from the DC, what they did there? That was insane. Absolutely insane Anyway, it was nice to have the week off from the podcast, but we're back. Markets are a little higher from there, th- there, but right, still in a range

Ian McMillan 2:58

Still blah. Not blah, but you know

David 3:02

Well, if you like trends like we do

Ian McMillan 3:04

Same, same spot we've been in for a couple

David 3:07

Yeah, since May

Ian McMillan 3:09

Some things worse, some things better, I guess Tell Dow, I guess, has been in an uptrend. I mean, I wouldn't say it's like Strongest uptrend, but structurally, I guess

David 3:20

Well, in technical analysis terms, Dow Near new highs. Dow transports new highs, so Dow theory confirming

Ian McMillan 3:30

Sure

David 3:31

Not too bad financials participating Industrials participating. Like I'm not saying that that's where we've got alpha, but anytime financials and industrials are doing fine, it's really hard to get bearish on the market

Ian McMillan 3:47

Doing fine We'll see. We'll see if they keep the old regional banks together. I'm a little sus about that one, but so far it seems to be holding Bank of America. The banks need to hold it together

David 4:01

But I don't know it

Ian McMillan 4:02

And banks have been sideways since Getting in here

David 4:06

Well, globally s- s- systematically important banks, GSIB ETF making new weekly closing highs if we hold today.

Ian McMillan 4:17

Well, yeah, those banks

David 4:19

European banks trying to close at new all-time highs, EUFN. But you're talking like regionals? Like KRE?

Ian McMillan 4:27

Talking about, I don't, yeah, we don't care about European

David 4:30

I, I only do

Ian McMillan 4:32

This i- this isn't a European podcast

David 4:34

We get, we have some listeners in Europe

Ian McMillan 4:37

Yeah, but you don't wanna buy, you don't wanna buy these. It's the f- well, their relatives

David 4:41

Yeah, I w- when you,

Ian McMillan 4:42

but

David 4:43

yeah, when you look at EUFN versus S&P, pretty nice consolidation on top of a base

Ian McMillan 4:49

Yeah, I mean, I could see that. The others, the others are

David 4:53

GSIP continues to go out at new highs versus the S&P, but you're talking to them like, suppose we could use QYBA or

Ian McMillan 5:02

And if you wanna

David 5:02

KBWB

Ian McMillan 5:04

I mean

David 5:05

Some banks. No, on absolute they're going out to new highs, but you're saying, like, is this where you're gonna get alpha? Is this where you're gonna outperform Little harder But it's good. It's good that they're participating. They're r- not rolling over At least not yet. They always can

Ian McMillan 5:19

No

David 5:20

Same with industrials. Industrials, big enough area that there's always something that seems to be working there, but as far as a group What else? What else are you seeing out there?

Ian McMillan 5:31

It's kind of Yeah, I guess. I guess, sir. Banco Santander. Sorry, I don't mean to get stuck

David 5:38

No, we can. Well, even Canadian, Canadian, Canadian bank,

Ian McMillan 5:42

yeah, as in say

David 5:43

Canadian banks. Shout out to our Canadian brothers Not bad. Foolish behavior

Ian McMillan 5:49

Canadian banks Mm. Good for them Guess we'll just take the Stanley Cup, you guys can have the better bank stocks

David 5:58

That probably stung for some. That was a dagger, dagger out of the microphone of Ian McMillan.

Ian McMillan 6:05

I am, I'm

David 6:07

are feisty today

Ian McMillan 6:09

I, I, that's why I got a, I got a woosah before our call here in a little bit. Just gonna go outside. Maybe I'm gonna sit by the

David 6:17

Yep, sit by the water. In the water

Ian McMillan 6:19

In the water maybe

David 6:21

Maybe some box breathing

Ian McMillan 6:23

This is what, this is what happens. See, the, the tangents pick up on podcast when stocks

David 6:32

Yes, there is an uptrend in tangents when there, there is no trend in the market. I mean, we, we're still,

Ian McMillan 6:40

don't,

David 6:40

still technically in uptrend, but what I guess we're trying to communicate is there is a consolidation.

Ian McMillan 6:44

We're in an

David 6:45

But there's a consolidation since May You know, you look at the S&P and it's... I mean, honestly, it's, it's a really good consolidation considering we moved 20% in the S&P, 33% in the Qs

Ian McMillan 7:00

I mean, I'd rather do

David 7:01

Yeah.

Ian McMillan 7:01

down to like

David 7:02

Yeah, we need to be thankful for the type of consolidation we appear to be getting, which is about 4% on the S&P and, what do we wanna call this? About 5% on the Qs I mean, I, I don't... Yes, would we love markets that go in a straight line? And there was a lot of money we made for our clients in that prior leg. So now we wait. Now we wait for this consolidation to resolve, and could honestly go into August. So maybe you'll be sitting in that pool even longer Maybe the tangent, maybe the tangents will increase

Ian McMillan 7:35

They'd hate us. The, the listeners would not happy.

David 7:39

happy with the tangent?

Ian McMillan 7:40

But yeah, I don't, I mean, what, I mean, even under the s- growth and value has been back and forth. I mean, there's not a lot of massive swings between growth and value over the last couple months. I the sectors that you would wanna see underperform are underperforming. I'm not saying we're getting a lot of outperformance from a wide variety, but at least, like, staples Utilities

David 8:11

Even high beta ver-- low vol is consolidating

Ian McMillan 8:14

Hi, Bailey. Love all is good Dollar stays above 100,

David 8:18

Yeah, isn't that interesting that we haven't seen the market

Ian McMillan 8:22

Yeah, the... I'm s- I'm shocked that we're not falling I don't know. I

David 8:26

Dollar's holding 100.

Ian McMillan 8:27

mean, we're definitely...

David 8:29

Well, I say dollar's holding 100, but the weakness that we've seen the last few weeks in the dollar, I don't know, I guess I would ex- expected stocks to be weaker than they are with the dollar over 100

Ian McMillan 8:39

Yeah, and I mean, it's like you said, it's holding nicely Yeah, I mean, there does seem to be a shift, right? If you just look at like Russell 2000 versus the Seriously. Maybe we're, I mean, continue, but Biotech. Biotech's been on a good run. They kinda got to it today That's gonna have to hold it together

David 9:01

Otech has had a good run And meanwhile, semiconductors continue to consolidate too. The leaders, it's not like we've had a massive breakdown I mean, semiconductors since March rallied 88%, and I suppose you could say, "Oh, it's a little bit uncomfortable to have a 12% range." Well, you did rally 88% and semiconductors from March through June

Ian McMillan 9:26

Wow

David 9:26

normal Pretty normal

Ian McMillan 9:28

Pretty solid additional context

David 9:32

Always got to keep that perspective Kinda like US getting bounced from the World Cup. Like if you'd told me they'd play like they did in the wor- in the group stage and then win their round of 32, I'd have been happy. But then when they lose round of 16, I'm unhappy. It's just context. You gotta remember, oh yeah, if, if they had gotten this far at the start, I'd been happy But now we all gotta cheer for Norway Are you?

Ian McMillan 9:58

Yeah. I mean, that's who I'm

David 9:59

Are you? Feel like you should? And I always cheer for the favorites like France or Argentina

Ian McMillan 10:06

No

David 10:07

See? Another,

Ian McMillan 10:08

You don't

David 10:09

another tangent

Ian McMillan 10:10

what are we gonna do, Dave? We gotta get this market to move. got to go for the sake of this podcast

David 10:17

Gotta poke a stick at it

Ian McMillan 10:19

And it's kinda like watching paint dry. an intermediate to longer term trend follower, these are just the, these are the doldrums

David 10:28

Yeah Well, I just go, I just think a 4% range after a 20% move is pretty awesome if that's what we're gonna do. And if that's ABC, like using technical terms, if this is A is the first leg, B is the corrective move. If we get C that would be 9,100 On the S&P?

Ian McMillan 10:51

Yeah

David 10:52

But we gotta, we have A midterm year, Ian. You know, I feel like the politic thing hasn't... There's just not been a lot of narrative around that

Ian McMillan 11:01

There are people that, I mean, the p- we're, I think we're at the stage of, I mean, how do you even trade off that stuff? No one cares about this stuff anymore. There's still, Trump's still tweeting about the Iran war. Ceasefire, no ceasefire. Talks, no talks. People are just numb to it. People are numb to the political buffoonery. And it was going on before Trump. You know, it's not like This is new I don't, I don't... I mean, what if you're making portfolio decisions based on the What was that strait they blocked over there?

David 11:44

Data Hormuz

Ian McMillan 11:45

Strait of Hormuz

David 11:47

Which is actually a curve. It's not straight. Although straight's a geological term That's spelled like

Ian McMillan 11:55

Dave, what are, what are we doing?

David 11:57

We win

Ian McMillan 11:58

I don't know. What are we doing?

David 12:01

Not geological, geographic. That's the term. Geographic. Strait of Hormuz, not straight

Ian McMillan 12:07

Geological What's the difference between geological and geographical?

David 12:10

like geological is more like would that be like actual like physical elements? Like

Ian McMillan 12:18

Oh my God, we need this market to move

David 12:21

Yeah. It has to do with the study of Earth's physical structure, the solid materials such as rocks and minerals, geological

Ian McMillan 12:28

We're, yeah, if this market doesn't move, we're gonna have to segue into, like, a

David 12:31

Yep. Geographical would be more like mountains, plains, straits, Straits of Hormuz. I learned a, learned one I haven't heard since grade school. My brother I, that I saw in Nebraska was talking about wadis. I was like, "Dang, bro, bringing back some old..." You're right. Let me pause. We need this market to trend

Ian McMillan 12:54

I apologize that this podcast is not informational

David 12:59

talked 4th of July fireworks rules, World Cup, geological versus geographical Cover anything else? I mean, we haven't talked about block cameras or And where do you...

Ian McMillan 13:14

Messi's wedding

David 13:15

Who? Oh, Messi? He's getting married? I thought he was already married

Ian McMillan 13:19

Yeah

David 13:20

Oh Maybe that's the point Hmm. Interesting

Ian McMillan 13:24

Yeah

David 13:25

What I think I'd like to see if we're gonna move higher is junk bonds do a little bit better On an absolute basis, they look fine versus something like intermediate term bonds like IEF seven to 10 year bonds

Ian McMillan 13:39

Yeah

David 13:40

Triple C credit spreads are still

Ian McMillan 13:42

Fine

David 13:43

elevated. You know, we're s- yeah, we're still above 250, 250-day moving averages So we'll see. You know, w- what we haven't talked much about is like software or some of these Even Bisdee. Bisdee looks bad. Bisdee's, yeah

Ian McMillan 14:04

I think a lot of the mega-caps are Netflix, Meta, Microsoft, Amazon

David 14:10

Apple, Apple's about to go to a new high

Ian McMillan 14:13

Yeah, Apple looks fine. Amazon's back below its 200-day, isn't it?

David 14:16

Amazon, nope.

Ian McMillan 14:18

Nope,

David 14:18

Bounced. Meta, strong day today. Back above a 200-day

Ian McMillan 14:23

Well, there you

David 14:24

What about breath?

Ian McMillan 14:26

Fine It's fine I mean, overall the Dow is probably the weakest, but

David 14:31

Well, the best performing index through the first six months of the year is small caps, Russell 2000, and then Nasdaq 100 So that's kind of healthy market behavior Makes you wonder where we'll end up on the year We've had...

Ian McMillan 14:49

I mean, right now we're...

David 14:49

Go ahead. No, no. You go

Ian McMillan 14:53

I say we're the highest, highest on the S&P since June 15th. I don't know if we'll close here, but

David 15:00

June 15th. Feels so long ago

Ian McMillan 15:04

Long time

David 15:05

Feels so long ago. So breadth is good. Financials, industrials participating. Other things overseas participating. Some elevated CCC credit spreads. Dollar above a hundred. If we're being picky, likes better things out of junk bonds. Russell 2000 and Nasdaq leading halfway through the year. Ryan Detrick put out that there's been 11 Julys, the month of Julys, in a row positive. Do you think we get that for the S&P?

Ian McMillan 15:35

Crazy. We're off to a good start

David 15:38

We are. And then when we go back to the midterm year thing I mean, typically we get a correction somewhere in these next three months, and then that's the bottom for the year and we rally into year end. It'll be interesting to see if that happens again, if we get corrective behavior somewhere in the next three months And then higher. Or if that was just it, the low was this early July and We're back to talking strength next week and our listeners are happy. They're not turning it off early because we're talking about random things What's the VIX doing? Ooh, volatility lowest, lowest since May.

Ian McMillan 16:19

18?

David 16:19

15

Ian McMillan 16:20

Wow, 15 So yeah, I mean, you could See another flush down here to the

David 16:26

Yeah. Take it. Take it. Let's do it

Ian McMillan 16:31

But until

David 16:31

We wait And that's okay. But I do wanna highlight before we wrap this up the supporter of this podcast, the Adaptive Select ETF listed on the New York Stock Exchange under ticker ADPV, which helps investors access two of the most prevalent factors in markets, momentum and relative strength. Using proprietary identification methods, the Adaptive Select ETF attempts to own the strongest 25 large cap stocks when the market is in an uptrend. And since not all market environments are the same, Adaptive Select seeks to prevent extended declines by moving to short-term treasury bills and cash during long-term market downtrends. Investors can find out more, including how to invest in ADPV, by visiting adpv ETF.com or calling 1-833-880-5200. Investing involves risk, including possible loss of principle. ADPV is distributed by Quasar Distributors LLC. Anything else you wanna highlight, Ian? before we release our listeners into the second half of the year

Ian McMillan 17:28

Second half of the year. Man, when you put it like that, Dave

David 17:31

Well, doesn't it always feel like 4th of July happens and then it's Christmas? Maybe that makes me sound old. Maybe that's really what that's is, is... Wow, Dave

Ian McMillan 17:40

Things get

David 17:40

They do It'll be interesting. I, I, and I think we just have to appreciate when uptrends happen, and also be grateful for sideways consolidations that are only 4% depth. I mean, that's pretty minuscule Don't really want it, don't, don't really want it to devolve into like a 10 to 15. That's not as fun And really during these periods of consolidation, you kind of have to look at what are the strong things And so it does make you wonder, you know If s- value is gonna hold up better than growth, it's not. That's not really happening. It's more growth. So it makes you wonder if-

Ian McMillan 18:17

I know. It's so hard to... I wouldn't say hard. That's not the right word. Just It's a period of markets in the tumbler and Resume higher, we'll

David 18:30

Like we're riders on the storm

Ian McMillan 18:32

Ooh. Ooh. I like that. It's probably gonna be the podcast title

David 18:37

I like it Cause it, I mean, it, it's just little bit of volatility here and, and again, I, I guess I shouldn't paint it as, "Oh yeah, we're going higher." But I don't think we get to c- complain about a 20% advancement or percent consolidation, and then if we do move higher, I don't think we can complain about that

Ian McMillan 18:56

Agree

David 18:57

We just like straight trends We like making money for our clients.

Ian McMillan 19:01

mu- they're

David 19:01

Yeah, we like making money for our clients and it's better when it's in a straight line. Everybody likes that. Who doesn't like that? You're probably a communist if you do like that

Ian McMillan 19:09

Mommies love

David 19:11

Yes. Communist

Ian McMillan 19:14

It's how they take advantage

David 19:16

Mm-hmm.

Ian McMillan 19:16

of society

David 19:17

right Gotta keep the uptrends uptrending Anything else you wanna highlight? You could even do another tangent, Ian. I don't care. It's our podcast

Ian McMillan 19:26

Good

David 19:27

You're good? You're good?

Ian McMillan 19:30

I am

David 19:30

All righty. Well, it was good to get back on here with you. Maybe we get a resumption of the uptrend. Maybe we continue to consolidate. Either which way, we will try to continue to provide some episodes for you all. They'll be more probably engaging when the uptrend continues, unless you guys really like our tangents, which that's fine too. Otherwise, we appreciate everybody listening. Would love it if you gave us a high ranking on your platform of choice and shared it with your friends. That would mean a lot to us

Ian McMillan 19:59

That what? Have a great weekend everyone.