September 18, 2022

Friday saw a quad-witching session produce a quasi-Wyckoff spring pattern, a reversal which took out the recent swing low before going out well.

More important will be to see if any follow-through presents itself Monday, which would complete the pattern.

Within the list, the oil patch is consolidating recent gains in orderly fashion and does not present attractive opportunity.

The remainder of the leadership is in two growth segments, the solars and alt-energys. Both benefit from the funding provided by Congress in recent legislation.

Enphase Energy (ENPH) broke out of a five-week pattern last week on the first day up in the averages. I did not like the idea of buying it right there due to the prior weakness in the averages. As it turned out, the breakout reversed and then formed a nice, two-bar pullback with inside bar and good close. Note the sharp slope of the relative strength line in the chart below. Click to zoom in.

Maxeon Solar Technologies (MAXN) is another top performing solar with two major accumulation days in the last seven days, a nice volume dry-up following a 100% gain in about two weeks (see yellow highlighting), and a severe RS line slope. We will monitor this to see if an attractive entry presents itself.

First Solar (FSLR) has been the horse in the group. It is extended and does not offer attractive entry.

Cross Country Healthcare (CCRN) offers a decent enough pattern, but will not be considered in this risky environment for breakouts.

Among the alt-energys, Chargepoint Holdings (CHPT) and Plug Power (PLUG) consolidate at much lower levels of 37% and 39% off their 52-week high, respectively. Our preference is to seek stocks within 15% of their high because they have less resistance to have to slog through, though this will occasionally be waived in a special situation.

The following name is believed to be the most attractive for our strategy of speculation in the $13+ market.

Ormat Technologies (ORA) can be considered in the event the averages change course and stage a rally. The stock will need confirming volume on any breakout attempt.

In summation, the market is extended to the down side, which takes shorts off the table, while longs are out of the question. We stay in cash.

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