March 2, 2022

Stocks rose today after Fed Chair Powell made dovish comments which all but extinguished the likelihood of a 50-basis-point hike when the Fed next meets Mar. 16. Breadth was more or less in line with the averages.

We had been operating with a short bias most recently. Of our three short positions for today's session, one did not trigger due to an opening gap (shorts require a trade-through entry), one was a stop-out, and the other is open. The positions were put on due to the Nasdaq appearing to roll over following Tuesday's reversal day.

The need for the averages to roll over on the day of entering short positions is one of the challenging aspects of the short side. We will see what happens to the averages over the next couple of days, however the Naz remains in a downtrend.

Among long-side groups, a few oil & gas explorers came out of three-week shelves into new-high ground. These were not deemed to offer an attractive reward-to-risk ratio, and were passed on.

Elsewhere in cyclicals: fertilizers, shippers, and metal ores have shown some leadership, with the ferts coming on most recently. One name sets up here, and is discussed below.

Overall, the view here is that given the untidy nature of the averages and a scarcity of pattern setups, there is no urgency to get long this market. Of course, this could change next week.

The following names are believed to be the most attractive for our strategy of speculation in $13+ issues.

Alpha & Omega Semiconductor (AOSL)

Sociedad Quimica Y Minra (SQM)

In summation, with averages and leaders out of position, the best approach is one of cash. Speculators should not feel any urgency to increase long exposure in a meaningful way.

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 video (25:53)
Wyckoff spring setup (2:30) 
5-minute breakup test (8:01)