EB Daily Market Report - Brief Update - Tuesday, November 18, 2025
Good afternoon!
Just a quick recap of today's action as I'm catching up from last night's Portfolio DRAFT and preparing for today's Max Pain event.
First, we will enter the Portfolio stocks announced yesterday as of their respective closing prices on Wednesday, November 19th, the same time that we close out last quarter's Portfolio stocks. Many members ask if that means to enter the next morning at the opening bell. No, we enter our positions as of the closing bell on Wednesday, not the opening bell on Thursday. So, technically we're entering at 3:59:59 as of the last trade.
We are not Registered Investment Advisors and use our Portfolios to demonstrate how we attempt to beat the S&P 500 over time. Last quarter was a drawdown, which has occurred periodically since we began the Portfolio concept back in November 2018, or 7 years ago. We are in the process of closing out our 28th quarterly Model Portfolio and 26th quarterly Aggressive and Income Portfolios, which began in May 2019.
It is up to members to decide whether to purchase and hold the stocks in these portfolios, trade them, or ignore them altogether. It's completely up to each member. You should always view these Portfolios as being very aggressive, particularly the Model and Aggressive Portfolios.
As for today's Max Pain event, room instructions have been sent out separately. Normally, we're in an uptrend with plenty of potential downside in monthly options expiration week. This week is a bit different in that our major indices are off their all-time highs, so we should see more in-the-money put premium than usual. More on this later today.
Now onto today's market action....
Our major indices continue to drift lower and the Volatility Index ($VIX, +8.7%) continues to soar. The VIX is now above 24 and I've said plenty of times that I believe the risk is too great to trade stocks when the VIX moves through 20. Yes, key market bottoms form at some VIX level above 20, but we don't know what that level might end up being. If it's 24 or 25, then buying right now makes great sense. But if the VIX continues rising and ultimately reaches the 30s or 40s or higher, then buying at this level will turn out to be a HUGE mistake.
The IWM (small cap ETF) broke below neckline support at 238 and this move lower measures to roughly the 224-226 area. Today's low was 230.96, though the IWM is currently just above the flat line and is leading the other major indices for the first time in awhile.
Meanwhile, the S&P 500 is down 0.75% and the NASDAQ is down over 1%. Defensive sectors are leading today, which is normal for down days. Health care (XLV, +0.68%) has been the best-performing sector over the last month and that continues today. The 5 aggressive sectors are all lower, led by consumer discretionary (XLY, -1.47%) and technology (XLK, -1.46%). Software ($DJUSSW, -2.49%) is breaking down beneath key price support in the 8100-8200 range and that's a problem for technology. Semiconductors ($DJUSSC, -1.76%) is threatening to close beneath its 50-day SMA for the first time since the start of May. Price support on the DJUSSC has not been lost, however, so watch 26730 closing support. We hit 26843 earlier, but are now trading back at 27278. Semis are quite influential, so loss of support would be a bigger problem for technology.
NVIDIA Corp (NVDA-2.33%) reports its latest quarterly results tomorrow after the closing bell. 179.83 is the closing support I'm watching there. Currently, NVDA trades at 181.81 with just 24 hours to its earnings report and reaction.
My long-term opinion has not changed. I believe we are heading higher. Unfortunately, it does appear that the December rate cut is unlikely at this point, causing relative weakness in many interest-rate-sensitive areas and POSSIBLE further downside across our major indices. NVDA's earnings could either save the market from further deterioration short-term or add to the weakness. While it's difficult to say with a lot of confidence which way NVDA goes after earnings, I can say that the AD line has deteriorated in recent weeks and NVDA, relative to its semiconductor peers, has been downtrending for 3 1/2 months. If I had to venture a guess, I believe NVDA reports stronger-than-expected numbers, but that it doesn't matter. A 10-15 dollar gap down in NVDA would not surprise me at all, given the state of the market right now and the elevated fear levels. If 179.83 support is lost, I see NVDA testing gap support at 164.06 from its July 14th close.
I hope I'm wrong for the sake of the overall short-term action.
Happy trading!
Tom