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October 7, 2022 Weekend Market Review/Preview

www.trading-adventures.com

October 7, 2022 Weekend Market Review/Preview

Ok, we bounced. Is that all we get?

Andrew Moss, CMT
Oct 7, 2022
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October 7, 2022 Weekend Market Review/Preview

www.trading-adventures.com

Welcome to the weekend. 

It’s been a busy week with lots of new readers and subscribers. Thank you for that!

And thanks to all of you that have shared this page either by forwarding an email or by linking an article in your Twitter feed. I really appreciate it. 

If you’re a first-time reader and haven’t already, take a minute to subscribe now.

So, the market bounced.

But is that all we get?

It looks that way.

The bulls had a real chance to step in and take things higher after a phenomenal two-day bounce that had lots of corroborating support.

SPY QQQ and IWM charts all set up very well with three days of consolidation between the 8 and 21-day EMAs.

All we needed was a break higher from that 3-day range and traders would've been yelling, giddyup!

Now, as we close out the week with SPY and QQQ re-testing the June lows, the bounce looks to be a failure and it seems likely that new lows are coming.

As Brian Shannon likes to say,

“this market is guilty until proven innocent.”

That doesn’t change until prices are back above the key moving averages.

Until then…..


This line has been a real problem for the SP 500.

  • August 26 - Powell Speaks in Jackson Hole, WY

  • September 13 - Inflation Hot CPI report

  • October 7 - AMD's pre-announcement and lowered guidance instills earnings fears

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The charts.

SPY 0.00

QQQ 0.00

IWM 0.00

$DXY

$VIX

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Bull and bear case

Before we get too excited, and in advance of the bearish growls and "chicken little" calls we'll hear over the weekend, let's take a step back and make sure we're considering both sides.

The bull case still has a few main pieces.

  • The major indexes are still above the recent lows

  • Seasonality and the election cycle history are a tailwind

  • Moods are very dependent on The FED

While it may be difficult to imagine the Fed reversing course here, the Pivot story is still being discussed by some. Who knows what they'll do? And we don't need to debate what is or isn't the right course of action. But if they did announce a pause in rate hikes it would certainly have an effect on the markets.

from @AlmanacTrader

The bear case is more of the same.

  • Failed bounces

  • Prices below declining key moving averages

  • Most charts are broken, from a technical point of view

New lows in the coming days or weeks would confirm all of that and point forcefully toward even lower prices.

What I'm reading and listening to

David Perrell shares some really great ideas. This is worth a click to get to the complete list.

Twitter avatar for @david_perell
David Perell @david_perell
28 short pieces of life advice: 1. Block off 90 minutes in your calendar every morning to work on the most important thing. Wake up early if you need to. Don’t compromise.
11:57 PM ∙ Oct 3, 2022
14,746Likes2,328Retweets

From Twitter

There were many eyes on $MSFT as we all looked for signs that the bounce could continue.

Twitter avatar for @Andy__Moss
Andrew Moss, CMT @Andy__Moss
$MSFT 👀
Image
4:39 PM ∙ Oct 6, 2022

However, the shorter timeframe started flashing early warning signals.

Twitter avatar for @Andy__Moss
Andrew Moss, CMT @Andy__Moss
$MSFT could not overcome the AVWAP after several attempts.
Image
Twitter avatar for @Andy__Moss
Andrew Moss, CMT @Andy__Moss
$MSFT 👀 https://t.co/NICmEaktui
3:23 PM ∙ Oct 7, 2022
12Likes3Retweets

And it wasn't just $MSFT. SP Futures $ES_F flashed an early warning as well.

Twitter avatar for @Andy__Moss
Andrew Moss, CMT @Andy__Moss
$ES_F This broadening formation is still in the driver's seat. $DXY and $VIX are rising too.
Image
2:05 PM ∙ Oct 5, 2022

This is how it felt at the end of last week. This is how it feels again today.

Twitter avatar for @StockOpps
Justin @StockOpps
Closed the week, month, quarter at new lows. October could be a wild one!
8:02 PM ∙ Sep 30, 2022

Mike Shell points out that the stock market leads.

Twitter avatar for @MikeWShell
Mike Shell  @MikeWShell
The stock market is the leading economic indicator, not the other way around.
3:55 PM ∙ Jun 27, 2022
220Likes34Retweets

Anything else?

That's all for now.  Thanks always for reading, subscribing, and sharing with your friends and family. 

Join me tomorrow morning on Twitter for a look at the weekly charts.

I hope you have a fantastic weekend.


***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: SPY 1021P350

Short: SPY1021P330

Options symbols are denoted as follows:

Ticker, Date, Call/Put, Strike Price

Example: VXX1218C30 = VXX 12/18 Call with a $30 strike

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October 7, 2022 Weekend Market Review/Preview

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