Fundamentals tell me what to buy. Technicals help me decide when.
The Sandbox Daily (6.17.2026)
Welcome, Sandbox friends.
Today’s Daily discusses:
three technical indicators worth your attention
Let’s dig in.
Blake
Markets in review
EQUITIES: Russell 2000 -0.72% | Dow -0.98% | Nasdaq 100 -0.99% | S&P 500 -1.21%
FIXED INCOME: Barclays Agg Bond -0.36% | High Yield -0.37% | 2yr UST 4.184% | 10yr UST 4.929%
COMMODITIES: Brent Crude -0.53% to $76.72/barrel. Gold -1.67% to $4,281.7/oz.
BITCOIN: -2.18% to $64,359
US DOLLAR INDEX: +0.84% to 100.38
CBOE TOTAL PUT/CALL RATIO: 0.84
VIX: +12.37% to 18.44
Quote of the day
“Everybody in my MBA class at the University of Chicago was very smart and very hard working. But hard work and intelligence are mere table stakes. Not everybody has fortune smile on them; not everybody gets lucky.”
- Howard Marks, Oaktree via Barry Ritholtz in Serendipity: The Role of Luck in Your Life and Career
Three technical indicators worth your attention
If there were ever a time when investors needed a second opinion, this market is it.
One day, AI is the greatest thing ever and stocks surge. The next day, investors worry AI will disrupt entire industries and those same stocks sell off. Markets are constantly weighing new information, changing narratives, and shifting expectations.
My investment process is built on fundamental analysis. I focus on economic conditions (interest rates, inflation, confidence surveys, etc), management teams, growth prospects, and valuation to determine which assets deserve a place in a portfolio.
That said, I don’t ignore technical analysis. Outright dismissing it is a mistake.
Fundamentals help determine what a rational investor should do. Technical analysis helps us understand what investors are actually doing.
In TA, charts reflect the collective actions of market participants – rational and irrational alike – and can provide useful context when making investment decisions.
I view technical analysis as a second opinion, not a substitute for fundamental and macro research. Once I’ve identified an asset class or theme I want to own, technical indicators can identify potential support and resistance levels, help assess sentiment and positioning, and improve entry points.
With that in mind, let’s look at three technical tools I use most often: simple moving averages, relative strength (RSI), and volume.
1. Simple moving averages (SMA)
Moving averages are basic, yet important, and widely monitored technical indicators that help to visualize the overall trend of a stock. A moving average is, as the name implies, an average based on prior closing levels for the stock. It is moving in that every day that average must be updated to reflect the latest period.
A 50-day SMA represents the average closing price of a stock over the past 50 days. It “moves” because each day, the most recent closing price is factored in, while the oldest closing price, from 51 days ago, rolls off. The 50-SMA is helpful because it shows the recent trend of price action.
A 200-day SMA is the average closing level over the past 200 days. This metric is helpful because it filters out recent, cyclical noise and focuses more on structural trends playing out over longer time frames.
While there are many ways to use moving averages, we like to keep it simple and look to them as long-term levels of support or resistance.
When the stock is trading above the SMA, then the SMA is viewed as support, or a level that can hold as a near-term floor. When a stock is trading below the SMA in question, then it’s viewed as resistance, meaning that level is going to be hard to break through and continue higher.
In technical analysis, the Polarity Principle states that prior resistance, once overcome, turns to support; and vice versa, prior support, once broken, becomes resistance. A stock’s current market price versus these moving averages informs us of key support/resistance levels.
Technical analysts may look to use two separate moving averages – often in conjunction with one another – to determine where a stock goes next. Notable patterns technicians will call out that use two SMAs are the Golden Cross (bullish and can indicate more upside) and the Death Cross (bearish and can indicate more downside).
2. Relative strength indicator (RSI)
This is a momentum metric – measuring both the speed and magnitude of a move. It is used by technical analysts to determine whether a stock has reached overbought or oversold territory.
Do not confuse overbought and oversold, which speak to the speed and magnitude of a move in a given time, with overvalued and undervalued, which refer to valuation.
The RSI measures momentum by comparing the strength of “up days” versus “down days,” generally over 14 days.
This indicator oscillates between zero and 100. A reading under 30 is indicative of a stock being “oversold” and a reading over 70 signals an “overbought” condition.
RSI has been used and trusted for decades to signal swings in the broader stock market.
One important thing to remember is that an overbought or oversold indication can be worked off simply by some sideways action. So, the fact a stock is overbought/oversold does not indicate that it must pullback/bounce for that condition to be worked out.
In extreme market moves, it can be helpful to consider the RSI in conjunction with what you believe about the company’s fundamentals.
This happened earlier in the year to CrowdStrike. In the midst of the Q1 software selloff, CrowdStrike’s RSI fell to its second lowest level in the stock’s 2020s history. The move was extreme, with no specific fundamental reason other than general AI disruption fears in my view, to warrant it. The move seemed irrational. When a move is irrational and extreme, you generally want to be thinking about taking the other side of the trade. By combining technical tools like the RSI and the others discussed here, you give yourself the best chance at successfully stepping into weakness and buying a healthy businesses on sale.
3. Volume
Volume is how many shares are bought and sold in a given day. It sounds simple, but what that can tell us about a stock is important.
Think about every trade as a vote on a stock’s intermediate-term growth prospects and valuation – whether it is undervalued or overvalued — and in turn, where investors see the stock going in the future.
Trades on any given day serve as a sample size of the broader investor population. If a stock is going higher, it’s because investors are “voting,” or showing a willingness, to pay a higher price for a company’s earnings. Conversely, if a stock is going lower, that means investors want to pay less for earnings.
With every trade being a vote on valuation, technicians argue that the higher the volume, the more trustworthy the move in the stock. If a move is made on very low volume, then it can’t be trusted because the size of the vote on that day, the sample size, is small and therefore not truly telling of investor sentiment. A move on above-average volume, however, is considered more robust because more of the investor base is voting and the sample size is larger.
Share appreciation is a sign that demand is outstripping supply at the current price level. The reverse is also true. If a stock is selling off on heavy volume, the shareholder base more broadly believes the stock is indeed overvalued. A stock drops when there are more sellers than buyers.
That said, polls themselves can be flawed, either because the sample population was skewed in some way, or due to an issue with the polling methodology. The same can be said for volume analysis, which is why we cannot analyze it in a vacuum.
Things like short interest, news flow, broader sector and market dynamics, options activity, and much more can manipulate the signal from volume.
While volume is an important “lie detector,” it must be considered in the context of other metrics.
Bottom line
While there are countless indicators and tools that technical analysts rely on to forecast the future direction the stock market and the market of stocks, I think these three metrics – simple moving averages, momentum, and volume – are a good starting point for those looking to enhance their investment process and seek that “second opinion.”
The best part? These data points should be available on just about every brokerage platform out there.
So, while I focus on fundamentals first, I always incorporate multiple technical indicators for confirmation in my process and increase the odds in my favor.
That’s all for today.
Blake
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Welcome to The Sandbox Daily, a daily curation of relevant research at the intersection of markets, economics, and lifestyle. We are committed to delivering high-quality and timely content to help investors make sense of capital markets.
Blake Millard is the Director of Investments at Sandbox Financial Partners, a Registered Investment Advisor. All opinions expressed here are solely his opinion and do not express or reflect the opinion of Sandbox Financial Partners. This Substack channel is for informational purposes only and should not be construed as investment advice. The information and opinions provided within should not be taken as specific advice on the merits of any investment decision by the reader. Investors should conduct their own due diligence regarding the prospects of any security discussed herein based on such investors’ own review of publicly available information. Clients of Sandbox Financial Partners may maintain positions in the markets, indexes, corporations, and/or securities discussed within The Sandbox Daily. Any projections, market outlooks, or estimates stated here are forward looking statements and are inherently unreliable; they are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.
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