Oct 16, 2026 · 1h 11m
Market leaders break down as investors reassess AI-driven growth
Market Expectation Breaker; Apple, Eli Lilly, Cheesecake Factory In Focus | Stock Market Today
The episode frames the sell-off as a test of whether weakening leadership reflects a temporary reset or a deeper market deterioration.
- 1Nasdaq and S&P 500 weakness spread from mega-cap technology into growth, cybersecurity, and semiconductor stocks.
- 2Apple and Eli Lilly showed relative resilience, but both still require proper technical setups and favorable earnings developments.
- 3A weekend screen for strong stocks and sectors could reveal the next leaders once the market finds a foothold.
Don't miss
The hosts turn the market sell-off into a practical framework, explaining how to distinguish a normal pullback from an expectation-breaking deterioration and where to look for future leaders.
The brief
Ed Carson and Mike Webster open with a sharp sell-off that weakens the Nasdaq and S&P 500 while the Dow holds up relatively better and small caps continue to struggle.
The hosts argue that SPY breaking below key moving averages matters because mega-cap technology had been carrying market leadership, and that support is now failing.
Damage spreads through growth, cybersecurity, and semiconductor names, reinforcing the warning that strong fundamentals cannot override deteriorating technical action.
Apple and Eli Lilly emerge as relatively resilient examples: one benefits from less aggressive AI spending, while the other offers defensive growth but still needs a proper buy point.
The episode’s practical conclusion is a weekend screening process: identify stocks and sectors holding up now, then look for leadership after the market stabilizes.
What was said on this episode
25 statements · 11 positive · 9 negative · 1 mixed · 4 neutral
AI financing fears contributed to 10-year Treasury selling despite surging oil prices.
“USO for the ETF. And the 10-year Treasury, and this was one of the stories of the week, this one sold off, even despite surging oil, despite hot oil inflation prices, because of the AI financing fears that hit all those sectors.”
Listen at 2:04
One more Nasdaq session below the 21-day high would confirm an intermediate downtrend.
“one more day with that high stuck underneath there confirms through my checklist that you're in a... intermediate, short term to intermediate term downtrend.”
Listen at 5:11
IWM remains in a downtrend until it moves above the 21-day average.
“It's in a downtrend until proven otherwise.”
Listen at 10:35
IWM trading below its 200-day average is unfavorable.
“being underneath that is a really bad place to be.”
Listen at 10:55
Defensive stocks such as Coca-Cola tend to work when the market is weak.
“The money is flowing into let's pull up like a coca-cola going into something like that that's just really not our our type of stock doesn't look wrong but that's when the market doesn't look good these are the types of things that work”
Listen at 12:28
Apple breaking through resistance would make its setup interesting.
“if i can blow through that i think that'd be interesting”
Listen at 27:48
XLP will likely sell off if money rotates back into growth technology.
“if money starts flowing back into the queues or things like that, this will likely sell right off.”
Listen at 29:09
Mutual funds must remain at least 95% invested.
“mutual funds have to stay 95 plus percent invested at all times.”
Listen at 30:10
Mutual funds sell volatile holdings and move into defensive stocks during market declines.
“they're selling off their Microns and their Dell's and their SanDisk. And they can't raise capital. They can't raise cash the way all of us can do. So what do they do? Well, they go into the Johnsons and Johnsons and the Cokes and the Pepsis and the Costcos and things like that and hide.”
Listen at 30:17
Cheesecake Factory could form a higher handle and provide another entry point.
“if it can handle out here and then... drift down a little bit and kind of have a little bit of a higher handle that can give you another entry point.”
Listen at 31:32
Cheesecake Factory becomes an entry point if it exceeds today’s high.
“If it takes out today's high, that's an entry point.”
Listen at 31:43
Eli Lilly was buyable when it moved above resistance.
“With this one, I would say it was buyable a couple days ago as it was moving over that area of resistance.”
Listen at 32:33
Money is rotating into slower medical stocks and out of technology.
“it feels like money is moving into the slower type of medicals right now as it's moving out of the technology space.”
Listen at 33:39
Eli Lilly is attractive as a defensive-growth stock.
“I like this better because this is defensive growth.”
Listen at 33:56
Eli Lilly should hold up if the market returns to AI, though it may lag.
“if the market returns to AI, it's not like Lilly's going to fall apart. I mean, it might lag.”
Listen at 33:58
Medical and retail stocks may work in both declining and rising markets.
“I would be looking for medical and retail for names because they have the potential to work in both environments, even if the market turns and goes up.”
Listen at 50:20
The current AI bubble may be in its early stages of a long expansion.
“I think we're at the beginning of the first couple of innings of a long AI bubble”
Listen at 54:56
Investors should establish initial exposure through broad ETFs when markets turn positive.
“getting your foothold in there is so critical. And if you can't find a perfect stock to buy or you don't want the individual risk, go with a broad base ETF, whether it's SPY or Qs or even a sector ETF to get a foothold.”
Listen at 55:56
Investors should not try to predict when the AI bubble will end; they should use charts.
“Trying to guess that is beyond silly. I'll let someone else try to figure that out, just use the charts.”
Listen at 56:40
Higher-normal interest rates create a drag on investment and spending.
“When mortgages are 3%, 4%, it's a lot easier than 7%. So it is coming normal. So it is normal. But that does. suggests more of a drag on thing.”
Listen at 1:01:29
Market price action is the ultimate signal for evaluating AI concerns.
“if the market ramps up, that's your signal. And if the market sells off, it's like, well, that's your signal too on those things.”
Listen at 1:02:39
Each of four hyperscalers is spending more than $100 billion on AI-related infrastructure.
“each one of those four hyperscalers is spending more than $100 billion.”
Listen at 1:05:05
CoreWeave could fail despite a compelling AI investment story.
“if you're looking at something like a core weave just remember there are lots of stocks in the 99 time frame 97 and 99 that look like this and went to zero and so you don't Don't fall in love with something, no matter how compelling the story is, because they can have an exit strategy.”
Listen at 1:06:39
The AI trade could triple while CoreWeave goes to zero.
“The AI trade might triple by the end of the year and CoreWeave goes to zero.”
Listen at 1:07:15
Screen stocks above $10, sufficient dollar volume, and their 50-day and 200-day averages.
“Look for stocks, run a market surge. stocks that are above 10 bucks the stocks that are above 25 million dollar volume or 75 million dollar volume depending on how many stocks you want to make it through your list um and that's dollar volume not share volume so either 25 million or 75 million or those are my go-to and that are above their 50-day simple and their 200-day simple”
Listen at 1:07:46
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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