August 10, 2022

The widely-watched monthly consumer inflation report came in lower than expected today, sparking a very broad rally in stocks. NYSE breadth, at 4.9 to 1, was much better than an S&P up 2.13%.

A broad market advance, such as the case currently, is a healthy advance, as it implies institutions are buying more than just a narrow list of widely-held issues with large capitalizations.

By drawing a horizontal line on the RS indicator below, and then connecting that day's S&P value to today's price, we see that the broader market, i.e. the average stock, outperforms the index.

Overall, no negatives are seen in this bull market, other than a lack of explosive volume and an absence of growth-stock leadership. Even these cannot be considered real negatives, though, unless one insists on all bull markets looking just like the ones seen for the past 10+ years, a period that was an anomaly, not the norm.

This approach is believed to be wrong-headed, even if it embraced by the majority. This is a reason why I prefer my research to be 100% independent and original. In any case, the volume and growth stock issues are outweighed by a) the bullish sector/group outperformance discussed here and on Twitter for the past two weeks, and b) the presence of the '02-'03 market - with its absence of growth-stock leadership - as precedent for this one.

Meanwhile, Shockwave Medical (SWAV) tacked on another 6.7% today to bring its 3.5-week gain since being added to the Focus List to 33.3%.

Among the names, the following are believed to be the most attractive for our strategy of speculation in the $13+ market. Click to zoom in.

ARK Innovation ETF (ARKK)

ARK Innovation 2x ETF (TARK)

Liberty Media (FWONK)

ON Semiconductor (ON)

In summation, today's gap-up open and good close after just a 1-2 day pullback shows this market's strength. We are moving deliberately and methodically into this market, as opposed to diving in. A reason for this is the thin menu of technically attractive candidates. A fuller menu is expected as time goes on and as the growth sector continues its rebuild from a brutal bear market.

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)
Bread and butter pullback: Pt V (1:41)
System R
Short-selling (25:53)
Wyckoff spring reversal (2:30) 
5-minute breakup test (8:01)
Screens (21:03)