December 29, 2021

The averages treaded water for the second day, as increasing numbers of market participants began calling it a wrap for the year.

Since this rally began six days ago, advance-decline numbers have been normal for S&P stocks, but have lagged the Nasdaq for four days. This is exactly what we might expect for a market still plagued by a future of rising interest rates.

Besides A-D numbers, another way of measuring breadth is the 52-week high-low figures. As the below chart shows, new lows rose from 120 to 446 in just the last three days.

There is nothing much of interest in both growth and value/cyclical areas. Chart patterns are simply out of place for the breakout trader.

Should the averages break down, it may be worthwhile to take another look at the short side of the growth sector.

In the meantime, for most speculators, a full cash position is appropriate. For very aggressive types, the following are believed to be the most attractive names in the $13+ market.

Advanced Micro Devices (AMD)

Endava (DAVA)

Epam Systems (EPAM)

Perficient (PRFT)

Red Rock Resorts (RRR)

In summation, the landscape for pattern setups is barren with just a few exceptions. Most speculators will be in cash.

Cash is king.

Kevin Marder

Trading Lessons
Introduction to the service video (38:00)
Money management and risk management video (20:27)
Bread and butter pullback video (11:10)
Bread and butter pullback: Pt II video (15:09)
Bread and butter pullback: Pt III video (31:48)
Bread and butter pullback: Pt IV video (30:16)
System R
Short-selling video (25:53)