Episode 32: Building Wealth Podcast with Steven Sitkowski
Record Highs, AI Growth, and How to Read Stock Trend Lines
The Nasdaq has reached a new all-time high. Technology stocks continue to lead. Corporate profits remain strong.
So why are there still warning signs beneath the surface?
In Episode 32 of the Building Wealth Podcast, Steven Sitkowski examines a market that continues to show surprising resilience despite higher interest rates, elevated oil prices, geopolitical uncertainty, and weakening market breadth.
He also answers a viewer question about how to draw trend lines, using Tesla, Intel, and Bank of America to explain support, resistance, and potential breakout patterns.
Why Is the Stock Market Still Rising?
One of the biggest stories of 2026 has been the strength of technology.
Steven points out that the Nasdaq reached another all-time high despite interest rates remaining elevated. Technology was also up approximately 31% for the year at the time of recording.
According to Steven, one of the biggest reasons is earnings.
Companies benefiting from AI investment have continued to generate strong growth, helping major technology stocks overcome some of the pressure created by higher rates.
Corporate profits also remained historically strong relative to the overall economy, providing another source of support for stocks.
What's Happening Beneath the Market?
The major indexes may look strong, but market breadth tells a different story.
Steven highlights four consecutive weeks of bearish market breadth. On both the New York Stock Exchange and Nasdaq, significantly more stocks declined than advanced during the previous week.
The difference between new 52-week highs and lows was even more dramatic.
Another warning sign is the percentage of stocks trading above their 200-day moving average.
At the time of recording, that number had fallen to approximately 43%.
That means fewer than half of stocks were trading above one of the most widely followed measures of their long-term trend.
The indexes remain strong largely because some of the stocks that are rising are moving significantly higher and carrying the broader averages with them.
Why Earnings Growth Matters More Than P/E Alone
Episode 32 also returns to an important valuation concept: the PEG ratio.
A traditional P/E ratio compares a company's stock price with its earnings. But Steven argues that P/E alone doesn't tell investors enough because it doesn't account for how quickly those earnings are growing.
The PEG ratio adds earnings growth to the equation.
For example, two companies could both trade at 20 times earnings, but if one is growing earnings twice as quickly, investors aren't necessarily receiving the same value from each stock.
With corporate earnings remaining strong, Steven points to lower PEG ratios as evidence that parts of the market may offer more value than headline valuations suggest.
How Do You Draw Trend Lines on a Stock Chart?
The educational segment of Episode 32 focuses on trend lines.
Steven explains that he typically draws two:
An upper trend line connecting two or more high points.
A lower trend line connecting two or more low points.
The direction of those lines can help identify the stock's trend.
If the highs are becoming lower, the upper trend line slopes downward. If the lows are becoming higher, the lower trend line slopes upward.
When those two lines begin moving toward each other, they can create a wedge pattern.
Steven describes this as a potential breakout pattern. A move above the upper trend line may signal increasing bullish momentum, while a break below the lower trend line may indicate increasing bearish momentum.
Tesla, Intel, and Bank of America Examples
Steven uses several stocks to demonstrate the concept.
With Tesla, he identifies rising lows alongside declining highs, creating a wedge that could eventually break in either direction.
Intel shows a similar pattern, with the stock recently reaching its upper trend line before pulling back.
Finally, Steven examines Bank of America, where both trend lines had been moving lower. However, the stock was also approaching an important support level, demonstrating why trend lines shouldn't necessarily be evaluated in isolation.
Support, resistance, moving averages, valuation, and the broader trend can all provide additional context when evaluating a chart.
Key Takeaways from Episode 32
The Nasdaq reached a new all-time high despite elevated interest rates.
Strong corporate earnings and AI investment continue to support technology stocks.
Market breadth has remained bearish beneath the major indexes.
Fewer than half of stocks were above their 200-day moving average at the time of recording.
The PEG ratio can provide additional valuation context by incorporating earnings growth.
Trend lines can help investors identify direction, support, resistance, and potential breakouts.
A wedge forms when upper and lower trend lines converge.
Investors can combine technical analysis with fundamentals to better understand individual stocks.
Episode 32 of the Building Wealth Podcast with Steven Sitkowski highlights an important lesson: the major indexes don't always tell the entire story.
Understanding earnings, market breadth, valuation, and technical indicators like trend lines can provide investors with additional context when evaluating what's really happening in the market.
FAQs
What are trend lines in stock trading?
Trend lines are lines drawn on a stock chart to connect important high or low points. They can help traders visualize the direction of a stock and identify potential areas of support, resistance, or a future breakout.
How does Steven Sitkowski draw trend lines?
Steven typically draws an upper trend line connecting two or more high points and a lower trend line connecting two or more low points. He prefers multiple touch points because they can provide stronger confirmation of the trend.
What is a wedge pattern in stock trading?
A wedge can form when upper and lower trend lines begin converging. Steven describes this as a breakout pattern because the stock may eventually move above the upper trend line or below the lower trend line.
Why is market breadth important?
Market breadth shows how many individual stocks are participating in a market move. In Episode 32, Steven points out that breadth remained bearish even while major indexes stayed relatively strong, suggesting that gains were concentrated among fewer stocks.
What is the difference between a P/E ratio and PEG ratio?
A P/E ratio compares a company's stock price with its earnings, while the PEG ratio also considers earnings growth. Steven prefers looking at PEG because it provides additional context about the relationship between a company's valuation and its growth.
What is the Building Wealth Podcast with Steven Sitkowski about?
The Building Wealth Podcast with Steven Sitkowski helps investors better understand the stock market, investing, wealth building, options trading, and economic trends. Drawing on more than four decades of experience in the financial industry, Steven Sitkowski shares practical market insights, investment education, and strategies designed to help individuals make more informed financial decisions.
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