10/7/22 Getting Sideways & Finding Acceptance


Thursday was a down day on Wall Street. All four major indexes slipped modestly lower.

  • Dow Jones -1.1%
  • Nasdaq -0.7%
  • S&P 500 -1.0%
  • Russell 2000 -0.6%

The uptrend has not broken. The market has now moved sideways for a second day.

photo of a woman doing a side bend
Image from Shutterstock

Sector Round-Up

1 of the 11 sectors was green at the close…

  • Energy (XLE) +1.8%
    • The reduction in crude oil supply is the driving force here.

At the bottom…

  • Real Estate (XLRE) -3.3%
  • Utilities (XLU) -3.3%

These two sectors have been at or near the bottom all week.


The market can move in one of three directions. The choices are up, down, or sideways.

Chart of the SPY with described levels marked
SPY Daily Candles – Chart via thinkorswim

What we have here is a three-day rest period … sideways movement. 

  • It’s very common in bullish rallies.
  • After gains of 5%+, a pause in the action is healthy. 
  • The market is looking for price acceptance.

During these rest periods, each day’s range stays within the previous day’s range. 

  • Look at the S&P 500, that’s exactly what it’s doing.
  • A closer look reveals an ascending wedge pattern 
    • These result in breakouts more often than not.

Our other signals aren’t don’t provide any additional clues…


The jobs report with the new unemployment rate will drop at 8:30 this morning. 

  • Right now, the strongest aspect of the economy is the labor market.
  • If that changes, we’ll reexamine our outlook.

Today we remain bullish and will continue to build our seasonal positions.


*Low Float
^Open Position

*BEAT support at $5
*SOBR resistance at $3.25
*^RELL support at $18
FNGR on watch
HROW resistance at $13, support at $10
^SAVA support at $40
ETNB resistance at $7.50
IMVT on watch
EVTL support at $10
ALZN support at $1.40
DCPH support at $17
RVNC support at $29
XFOR on watch
VIST support at $10.50
FREY support at $14, resistance at $16.50
ADEA on watch
HLIT on watch
ARDX support at $1.40
CANO resistance at $9
SBS support at $11

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