August 14, 2022

Many stocks are forming the right sides of cup-shaped bases. The only sentence you will ever find in these reports that is more bullish than this is "many stocks are breaking out of bases."

Due to the depth of the damage inflicted on the growth sector in the last bear market, an eight-week-old bull market such as this one would typically have more names breaking out of bases than what we see here.

Indeed, it is this lack of breakouts that resulted in 34% of respondents to my July 30 Twitter poll being bulls while 66% were bears. People just aren't used to seeing a brand-new bull market look differently than the ones seen over the last 12+ years.

I ran this poll just to see how many were in agreement with my market assessment of the previous day, which is below. I was actually surprised that there were so few bulls. I figured it would be 50-50.

I then waited two weeks to see how quickly the crowd moved to the other side of the boat, and ran this poll Friday.

Meanwhile, a couple of positives have occurred among the early-cycle sectors/groups listed in recent reports and also in the above tweet. The banks have taken off, and the small-caps have also seen their relative strength lines steepen.

This all fits the script that we usually see early in a new bull market.

It is my hope that you have learned something about what a new bull market is supposed to look like beyond what the averages and leaders are doing. The averages and leaders always tell most of the story and are our primary general market timing indicators.

Secondary, or background, indicators such as breadth divergences and interest-sensitive sector divergences are less market timing tools but more longer-term signposts. My recent analysis of early-cycle groups falls into the latter category of longer-term signposts.

In particular, I am pleased with the banks coming on the way that they are. I did some research in the early '00s and found that of the prior seven bull markets, five showed the banks diverging from the S&P before a primary bull top was printed. So they have predictive value.

Sub-surface, the market is still showing a dearth of aggressive growth titles that are trading within 10%-15% of their 52-week high. A few with the type of big fundamentals we saw in the last bull market are starting to stretch out, however, such as Blink Charging Co. (BLNK), Gitlab (GTLB), and Paylocity (PCTY), These are not buyable yet.

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)

Celsius Holdings (CELH)

United States Natural Gas Fund (UNG)

In summation, we expect to see this rally provide more pattern setups with each passing week. Further upward revaluation is anticipated.

Kevin Marder

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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)