September 30, 2022 Weekend Market Review/Preview
Ian and Fiona weren’t the only storms brewing this week
Welcome to the end of the week, the month, and the quarter.
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Fiona hit Puerto Rico and Ian hit Florida. I hope all of you and your families are safe and relatively undamaged. Sadly, I know many are not.
Ian and Fiona weren’t the only storms brewing as the market felt a bit precarious coming into the week. The indexes tried to hold up but weakened into the close today. Not a great end to the week/month/quarter.
Each day that we don’t make upward progress is a day that adds fuel to the bearish fire.
So far the 'bounce' still leaves much to be desired. Price action just isn’t supporting that story. In fact, the indexes have been in a bearish consolidation pattern, working off the downside extension and allowing the short-term moving averages to catch up (down?) to price. That looks more like continuation than reversal.
The overall trend is still down. While a bounce would be very welcomed by the bulls…
Bounce possibilities laid out
…not only does it feel like a long shot, but it would still be a counter-trend move and would need to be treated as such.
Here are the charts-
Not a bullish finish to the week
Also looks vulnerable
A possible bear flag pattern here gives a measured move target of around the $144 price area.
The Dollar did come down this week which gave the bulls some hope. So far it hasn’t been enough.
Implied volatility is still elevated and may want to go higher still.
Bull and bear case
The bull and bear case here is very simple.
Do we break above this potential island bottom, stay above, and move higher?
Or do we break down from the bearish consolidation and keep going lower?
Flushing into the close on Friday isn’t bullish.
Next week I'll be watching $SPY 372.30 on the upside. Seems like a tall order.
On the downside, with prices below the June lows, we have to look even further for potential support. The pre-covid high in the area of 340 could be a spot.
I’ll post weekly and monthly charts tomorrow morning on Twitter for a bigger-picture view.
What I'm reading (and listening to)
Stanley Druckenmiller on How Leaders Lead with David Novak
From the intro: during his 30 years managing money for investors, he had an average annual return of 31%. And he NEVER had a down year. So if you’re even a little interested in finance, you’re going to learn a lot from Stan – including some really practical investment advice and his take on the future of our economy.
Bob Dylan on the Founders Podcast
Ok, not actually Bob Dylan. But David Senra talking about Bob Dylan.
We all know Dylan, the ubiquitous songwriter. What I didn't know is that he won a Pulitzer Prize for his own autobiography. A work for which he didn't even have an editor!
For someone who's written so many stories into songs, he must have a fascinating story of his own life. Right? He certainly does. I always enjoy artist and musician biographies, and I got this book many years ago but for some reason never read it. David Senra and his Founders Podcast struck again this week. I will read the book soon.
click for the full images
This one got lots of hits
I just wrote about this.
Things that have never happened before happen almost every day in the stock market.
The most volatile year for oil in the last 30.
And remember in 2020 the price of a barrel of crude went NEGATIVE!
There is no holy grail. You are the secret ingredient.
You must create your own system
Finally, a wild story about alleged fraud, whistleblowers, and corporate espionage.
Be sure to join me tomorrow morning on Twitter for Monthly Charts. It's always nice when the monthly candles close on a Friday with the weeklies. #chart-nerd
Thanks always for reading, subscribing, and sharing with your friends and family.
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.
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