Bulls Back In Charge, UNH: Continue To Ride With Uncle Warren, PYPL: Breakout Or Fakeout?
On Friday October 24 the S&P broke above the massive candle that had contained it for two weeks from Friday October 10. That’s a breakout and it puts the bulls back in charge.
However, the market remains very thin and the major market cap weighted indexes are being pulled higher by “just seven stocks” – despite what the bulls say. It’s not that the rest of the market is falling apart. It’s just mostly treading water as the Magnificent 7 continue to race higher as can be seen in the first chart above comparing the performance of the MAGS (Mag 7), SPY (S&P 500) and RSP (Equal Weight S&P 500) ETFs over the last 6 months.
United Health (UNH) reported 3Q25 earnings Tuesday morning before the open and the turnaround appears to be progressing nicely. UNH increased full year EPS guidance marginally from at least $16.00/share to at least $16.25/share.
But the real story here is a multiyear one. If UNH can stay on track, I see no reason it can’t reclaim its former EPS levels approaching $30 and even surpass them. If so, the stock will continue to go higher over the next few years. Continue to ride with Uncle Warren.
Paypal (PYPL) also reported 3Q25 earnings Tuesday morning and the stock is showing life up 11% at the moment. I have followed PYPL for a long time and owned it for a long time as well before throwing in the towel. They raised 2025 EPS guidance to $5.35-$5.39 from $5.15-$5.30. They also made a deal with OpenAI. I’ll keep an eye on it but I’m not about to jump back in just yet.
