October 9, 2022

An early-week rally evaporated Friday, as a below-forecast unemployment reading dimmed hopes for a 50-basis-point rate hike at the Fed's November meeting.

Though the S&P lost 2.80% and the Nasdaq -3.80%, the broader market was hit the hardest, in maintenance of a recent trend.

Our long 3x SPXS inverse SPY pullback idea was up 8.33%, though 3.47% of this occurred on the opening gap.

To review, with ETF pullback entries, a less-aggressive player may insist on a trade-through entry, though it is not a requirement. Ditto for a back-door entry.

With pullback entries in a non-growth stock, such as an S&P 500 issue, it is a good idea to insist on either a trade-through or a back-door entry. This helps mitigate risk.

At this point, the oil & gas explorers are the best-looking group from the long side. They have shown relative strength coming out of the September market pullback. Most all of their patterns are v-shaped, however.

For this week, the event of note is Thursday's consumer inflation report.

Let's bide our time in cash as we see how the averages fare in their technical test of the June lows.

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)
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)
The Income Model