Stocks have enjoyed a good week thus far, based largely on the better-than-expected earnings season. The averages can be excused if they should pull back perhaps to the vicinity of the 50-day moving average, the dashed line below.
The S&P 500 sits just slightly below its record high, and has outperformed the Nasdaq since early September.
The concern is that as the 10-year Treasury yield rises, so will the hesitancy of institutions to buy growth stocks. And rising yields are the real risk in this market. As I noted recently, each market advance over the past year has been accompanied by a lesser number of growth stocks lighting up the tape.
The best course of action is to let the stocks dictate what we do. A scenario in which yields fall amid a period of slower economic growth is also a possibility.
A bright spot is breadth, which has increased since just before the Oct. 4 market low.
While most fresh market advances are a time to take on greater risk, it is concerning that the quantity of pattern setups of any kind -- be they growth or cyclical -- is not up to snuff. With that said, there are some issues that need some work and may be ready in coming days and weeks.
At the moment, though, few titles are actionable.
The following names are believed to be the most attractive in the $13+ market for our strategy of speculation. Click to zoom in.
Celsius Holdings (CELH)
Crowdstrike Holdings (CRWD)
In summation, the new advance continues and is entitled to a minor pullback. Growth stocks are somewhat hampered by rising bond yields. This has affected the number of pattern setups. On the bright side, a number of stocks are repairing their chart patterns and should provide us with opps in coming days and weeks.
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)
Short-selling video (25:53)