October 31, 2021

Stocks continue their push higher as the market discounts a positive earnings season. For the month of October, the Nasdaq was only a slight outperformer vs. the S&P 500.

The Nasdaq's 7.9%, four-week correction of September and early October was beneficial in that it increased bearish sentiment in order to keep the crowd honest.

The technology sector, as well as the market overall, tends to have its best showing of the year during the November-January period.

The Focus List has expanded for Monday. Eleven issues are on it, but some of these are quite speculative and may not appeal to less-aggressive players.

It is a plus to see a good number of titles showing powerful revenue growth as you will see in Part II of this report.

My two biggest positions comprising half of my account are Tesla (TSLA) and Dutch Bros (BROS). 

I incorrectly thought that BROS' earnings report was for Oct. 28 and took half off in advance of that. After realizing my mistake, I put it back on. MarketSmith shows a Nov. 10 date but EarningsWhispers shows nothing. Since we operate on EW figures, we are in the dark here, which represents the near-term risk in the stock.

As noted on Twitter, the earnings risk of BROS is likely less than that of a technology concern. A young, fast-growing retailer like BROS could react to a disappointing same-store sales number or a reduction in planned store openings, among other things.

In summation, this is the best time of the year for the market historically. The speculative sentiment boils. Adding to the allure is that the Nasdaq just emerged from a correction. We make hay while the sun shines.

For Part II of this report: Please click here.

For Focus List: Please click here.

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)