10/4/22 Bears v. Peacekeeper


On Monday, markets welcome Q4 by roaring back to life. All four major indexes posted outsized gains as oversold conditions were relieved.

  • Dow Jones +2.7%
  • Nasdaq +2.3%
  • S&P 500 +2.6%
  • Russell 2000 +2.7%

UN Takes on Powell

Image for UN Peacekeepers in uniform with blue helmets
Photo from The U.N.

The United Nations is calling on central banks to stop hiking interest rates. 

  • They warn the higher rates will lead to a “downward spiral” for “developing countries.”
  • The Fed has hiked interest rates five times this year, raising them from 0% to 3%
  • Fed Chair Powell has promised to fight inflation with rate hikes until the job is done.

Sector Round-Up

All 11 sectors posted gains on Monday. The top performers…

  • Energy (XLE) +5.7%
  • Materials (XLB) +3.3%
  • Technology (XLK) +3.1%

At the bottom…

  • Consumer Staples (XLP) +1.7%
  • Consumer Discretionary (XLY) +0.1%

Your take-home: Investors bet heavily on industry and light on consumers.

Notable Names

Tesla (TSLA^) fell 8.6% on Monday, bucking the market trend. The reason? Take your pick…

Image for Tesla's newest humanoid robot
Image from CNET
  • Tesla’s IA day revealed a slow-moving robot that failed to impress.
  • Q3 vehicle deliveries set a new record but missed expectations
  • CEO Elon Musk is trying to broker a peace deal between Russia and Ukraine using Twitter (TWTR^) polls.

Bitcoin^ recaptured $20,000 overnight. The world’s largest cryptocurrency has shown resilience over the last week amid the market turmoil.

  • So far, the price action has fallen in line with our model.
  • We remain a buyer at these levels.


It’s called a double bottom…

Chart of the SPY with June and September lows marked.
SPY Daily Candles – Chart via thinkorswim

It’s a bullish reversal pattern that fits the seasonal narrative … October is a bear killer.

All our other signals agree.

The market is primed to move higher over the next nine months.


Q4 of a mid-term year is the start of the “sweet spot” we see every election cycle.

With history as a guide, investors can expect a rally to peak in Q2 of 2023.

We’ll closely monitor Earnings Season when it kicks off next week. 

  • News can trump season and signals.
  • Our outlook remains bullish.


*Low Float
^Open Position

*ATXI on watch
*BEAT resistance at $4.50
*SOBR resistance at $3.25
FNGR on watch
HROW resistance at $13
SAVA resistance at $50, support at $40
IMVT resistance at $7
EVTL support at $9
DCPH support at $17
RVNC resistance at $29
FREY support at $14, resistance at  $15
HLIT support at $12
CANO support at $8, resistance at $9
SBS support at $11

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