September 19, 2021

Stocks spent the last few sessions finding their sea legs following three major distribution days in the Nasdaq. The barometer has corrected as much as 2.7% off the top, making this an orderly soft patch, at least at the surface of the averages.

The S&P appears slightly weaker as it stands just below its 50-day line.

Market participants appear split between the higher-inflation camp and the weakening-economy camp.

Not much has changed in recent sessions. The Nasdaq and S&P 500 are below their 20 ema's while very few growth or cyclical stocks form five-week or greater bases.

This last sentence tells the whole story. For the time being, the best course of action is to do next to nothing. Trying to make something out of nothing is tantamount to trying to squeeze blood from a turnip.

I hold positions in ZIM Integrated Shipping (ZIM) and ZoomInfo Tech (ZI).

Historically, technology has performed best during the November-January period. The market appears to be discounting this phenomenon via the relative strength rankings which have improved recently.

Computer - Tech Services RS 97
Computer Software - Security RS 97
Transportation - Shippers RS 96
Computer Software - Specialty Enterprises RS 95
Computer Software - Enterprise RS 92

I have spoken a number of times about September being the most treacherous month of the year historically. This does not mean it has to correct every single year. Still, it is curious that the S&P peaked on Sept. 2, both this year and last year.

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

Darling Ingredients (DAR)

Semtech (SMTC)

In summation, the averages are below their 20 ema's, a cautionary sign, while bona fide pattern setups are an endangered species. Let's protect precious capital until the fog lifts. We are less than six weeks away from what has historically been the best three-month period of the year. In the meantime, any pullback ideas consisting of inside patterns with FTFC will be looked for.

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

The Foundation by Rob Smith
TheStrat Combos (new)
Rob Smith interview with Trendspider, 32:05
Sara Sabatino interview with Richard Moglen, 1:03:11