April 3, 2022

Stocks have staged a three-day pullback as they attempt to work off the excesses of their successful test of the late-February lows.

This is not a market that is rewarding breakouts. Players who only trade breakouts are at a disadvantage in times like these because they only have one tool in their kit.

To make any progress currently requires one to buy on weakness via pullbacks or Wyckoff springs such as in Direxion Gold Miners 3x ETF NUGT below, a Focus List buy above Tuesday's high.

Gold miners have perked up lately but do not offer attractive entrances at the moment.

Also showing some vigor last week were REITs and defensives, neither of which offers enough octane for our purposes.

The TQQQ is similar to the Nasdaq and S&P 500 in its forming a three-bar pullback. Price found support Friday inside the 9/20 gap. This is an example of how the run-up to the swing high of Tuesday was sharp enough for us to pass on the pullback.

The idea is that those who wanted in already got in on the advance into the swing high. Thus, the rally out of the pullback might be weaker than we prefer unless some additional backing and filling is put in.

In my routine weekend review, I saw seven or so pullback opportunities, but will not consider them due to a general market that is digesting its recent sharp run-up.

Meanwhile, Arista Networks (ANET) has been removed from the Focus List due to its being a breakout candidate in a market that is not embracing them.

In summation, it makes sense to let the averages sort themselves out before considering exposure to a market in which the reward-to-risk ratio is not especially attractive.

Kevin Marder

Trading Lessons
Introduction to the service (38:00)
Money management and risk management (20:27)
Bread and butter pullback (11:10)
Bread and butter pullback: Pt II (15:09)
Bread and butter pullback: Pt III (31:48)
Bread and butter pullback: Pt IV (30:16)
System R
Short-selling (25:53)
Wyckoff spring reversal (2:30) 
5-minute breakup test (8:01)