October 21, 2022 Weekend Market Review
The first up Friday in 6 weeks
Welcome to the weekend. We’ve got a lot to review today.
If you're a new reader, first of all - Thank you! Take a minute to subscribe now.
And follow me on Twitter as well. I share a lot of charts and observations there throughout the week.
The markets
This week the market is ending on a high note, which is an infrequent occurrence lately. In fact, today is the first Friday in 6 weeks that didn't get a sharp selloff in stocks. With so much uncertainty and headline risk, no one has wanted to be long over the weekend.
That changed this week.
Stock prices were helped higher at least partially by a VIX that broke the range and moved below 30. Many have been eyeing this as a prerequisite for higher stock prices.
$VIX
The US Dollar also chilled out a bit, which is possibly the biggest driver of stock prices right now.
Looking deeper; some flagship names are making moves as well.
NFLX 0.00%↑ is back into the gap and heading higher. Today it closed above the 200 SMA and all-time high anchored VWAP.
Energy has been very strong and is leading the market higher.
I also noticed while going through the charts this week;
Tons of stocks are running right into potential resistance. If the majority of these can get up and over, we could be set for a bigger move. I’ll share a look at some of them tomorrow on Twitter as I’m running out of space here.
Reminder:
Although the turns have been sharp and numerous in 2022, the market doesn't have to go from bull straight to bear and then straight back to bull. A rangebound, back-and-forth environment is also possible. Maybe even likely.
Bull and bear case
The stock bull case can be stated very simply:
Get above and stay above the key moving averages. DIA, SPY, QQQ, and IWM are all back above the 8 and 21-day EMAs. As long as that holds up we’re in a tradeable active sequence.
Watch the recent pivot highs for potential resistance and a test of the upward move.
The bear case is equally simple:
Lose the short-term 8 and 21-day EMAs and the trade is dead. Or at least on hold.
What I'm reading
This week I was able to finish the book I mentioned in last week’s market review.
"The Blueprint to Trading Psychology" by Alan Edward
I’ve read many, many books on trading psychology and this one earns a spot near the top of the “best of” list. Here are a couple of nuggets:
“The very foundation of confidence is simply having a plan.....
It should be as easy as;
If A happens then I will do B.
If B doesn’t happen then I will do C.”
"If you don’t have daily, weekly, monthly, and yearly goals for your trading, it will be very difficult for you to visualize your success."
On dealing with drawdowns: Ask yourself these 2 questions -
Am I following the plan?
Am I managing risk?
If you can answer yes to both then you have nothing to worry about. Keep going.
From Twitter
A word on Bubbles-
These NFT values fell faster than a person jumping off a bridge.
Speaking of……..A bunch of crazy people gathered to jump off the “longest steel span in the western hemisphere and the third highest in the United States.”
Bridge Day in WV
Today I learned:
James Bond is undefeated
click for the full image:
This works for everything. Including this article.
Anything else?
We had an open house this week in the T3 Live ProDesk VTF. If you didn't catch it, don't worry. There will likely be another one sometime soon. If you want to see what it's all about before then click here.
Feel free to email me with any questions.
Thanks always for reading, subscribing, and sharing with your friends and family.
Join me tomorrow morning for a look at the weekly charts.
I hope you have a fantastic weekend.
Cheers.
***This is NOT financial advice. NOT a recommendation to buy, sell, or trade any security. The content presented here is intended for educational purposes only.
Andrew Moss is an associated member of T3 Trading Group, LLC (“T3TG”) a SEC registered broker/dealer and member of FINRA/SIPC. All trades placed by Mr. Moss are done through T3TG.
Statements in this article represent the opinions of that person only and do not necessarily reflect the opinions of T3TG or any other person associated with T3TG.
It is possible that Mr. Moss may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed. This may reflect the financial or other circumstances of the individual or it may reflect some other consideration. Readers of this article should take this into account when evaluating the information provided or the opinions being expressed.
All investments are subject to risk of loss, which you should consider in making any investment decisions. Readers of this article should consult with their financial advisors, attorneys, accountants or other qualified investors prior to making any investment decision.
POSITION DISCLOSURE
Long: CVX, QQQ
Short:
Options symbols are denoted as follows:
Ticker, Date, Call/Put, Strike Price
Example: VXX1218C30 = VXX 12/18 Call with a $30 strike