10/28/22 The Great Crash—What We Learned


Thursday was another mixed bag on Wall Street.

Markets, once again, settled off their highs. Big tech is a drag on the market.

Image from the Financial Times

The indexes ended the day mixed…

  • Dow Jones +0.6%
  • Nasdaq -1.6%
  • S&P 500 -0.6%
  • Russell 2000 +0.1%

Advancers to decliners were evenly matched at 47% v 49%, respectively.

Sector Round Up

6 of 11 sectors managed to end the day higher.

At the top…

  • Industrials (XLI) +1.1%
  • Financials (XLF) +0.8%
  • Utilities (XLU) +0.8%

At the bottom…

  • Communications (XLC) -4.7%
  • Technology (XLK) -1.1%
Graphic from Getty Images & Meta Platforms

The communication sector can thank Meta Platforms (META), which declined 25%, giving up about $90 billion in market cap after another round of disappointing earnings.

Notable Names

Amazon (AMZN) fell as much as 20% in after-hours trading last night.

  • The culprit—weak holiday forecast.
  • At writing, shares are off just 14%
  • The company could close below $1 trillion market cap for the first time since the pandemic crash of 2020 today.

Pinterest (PINS) rose by 10% in after-hours trading.

  • User growth is flat
  • Ad sales & profits topped expectations.
  • The outsized moves in PINS, META & SNAP tell us how people spend time on the internet is changing.


The Russell 2000 is showing remarkable resilience.

As you can see in the chart, the small-cap index is setting up remarkably similar to its +24% bull run from June to August earlier this year.

IWM Daily Candles – Chart via thinkorswim

This tells us that despite the weakness in the tech and communications sector, investors are craving risky bets.

Despite the significant hits to big tech—Our signals indicate the markets remain healthy…


Today marks the 88th anniversary of the Great Crash of 1929.

During the crash, the Dow Jones lost 23% of its value in two days.

The crash happened at the end of a speculative boom in which everyone and their brother became a stock trader.

The selling continued after the crash until mid-November. The Dow lost about 50% of its value by the time it bottomed.

Investors had to wait 25 years for the market to return to its pre-crash heights.


*Low Float
^Open Position

*SOBRresistance at $4
*KLXEsupport at $14
*^RELL resistance at $24
*NINE support at $5
SLS resistance at $4
IMRA support at $4, resistance at $4.5
MEDP on watch
AEHR support at $19
PI support at $100
ASC support at $12
ETNB support at $9
^IMVT support $10
WNC support at $19
PCVX support at $37, resistance at $42
CALX support at $65
PARR support at $20 or $21
KULR support at $2
VIST support at $13
OII resistance at $13.50
HLIT support at $15
HLX support at $5.50
CHX support at $26
ROL support at $39
NFLX^ support at $250 or $280

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