10/5/22 Bulls, Memes, & Musk—A Busy Rally


Tuesday belonged to the bulls.

  • Dow Jones +2.8%
  • Nasdaq +3.3%
  • S&P 500 +3.1%
  • Russell 2000 +3.9%
Photo of Wall Street's Charging Bull Statue
Image from Wikipedia

The S&P 500 posted its biggest 2-day gain since April 2020 and the strongest daily breadth reading (an indicator similar to RSI) since late 2018.

Both historical events paired with the bottom of bear markets.

Sector Round-Up

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

  • Energy (XLE) +4.3%
  • Financials (XLF) +3.7%
  • Materials (XLB) +3.7%

At the bottom…

  • Real Estate (XLRE) +1.6%
  • Consumer Staples (XLP) +1.5%

Take note, materials and energy are leading this recovery so far.

Notable Names

Twitter & AMC logos
Images from Twitter & AMC

Twitter (TWTR^) rose 22% to $52 per share on Tuesday

  • The move was based on a report that Elon Musk will now go through with his planned acquisition of the company.
  • Musk confirmed the report saying, “Buying Twitter is an accelerant to creating X, the everything app.”
  • The sales price is $54.20
  • The market still doesn’t 100% believe the sale will go through

Shares of AMC Entertainment (AMC^ & APE^) rose 14% &12% respectively

  • There was no clear catalyst for the moves in the former “meme stocks.”
  • It might signal that retail investors are pouring back into the market. Time will tell.


Investors aren’t completely convinced the bottom is in…

VIX chart with ascending wedge marked
VIX Daily Candles – Chart via thinkorswim

Today’s chart is of the VIX, which indicates the expectation of volatility over the next 30 days.

Typically a higher VIX favors the bears.

As the market began surging, the VIX has yet to yield to the bull’s advance. We’re watching for bullish confirmation. A breakdown of the current rally in the VIX would build on our bullish case.

Our other key signals


Our Friends at StockTradersAlmanac.com issued their annual “buy” signal after yesterday’s close.

  • The strategy combines the known best and worst months with a simple MACD signal indicating when to buy and sell.
  • Their strategy has consistently outperformed the buy-and-hold strategy for decades.
  • You can learn about Stock Trader’s Almanac in our podcast interview with the editor-in-chief. It’s available everywhere podcasts are.


*Low Float
^Open Position*ATXIresistance at $15
*BEAT resistance at $4.50, support at $4
*SOBR resistance at $3.25
FNGR on watch
HROW resistance at $13, support at $10
SAVA support at $40
IMVT support at $7
EVTL support at $10
ALZN resistance at $1.40
DCPH support at $17
RVNC resistance at $29
FREY support at $14, resistance at $16.50
ADEA on watch
HLIT support at $12
CANO resistance at $9
SBS support at $11

Leave a Comment

Your email address will not be published. Required fields are marked *