September 28, 2022

We have some waiting to do before the averages are in line to attack their 20 ema's.

The Naz sits above its June low...

...while the S&P undercut its June low intraday and found support.

If this pullback and rally attempt in the Nasdaq occurred in an up market, we would be more apt to enter a few positions that snapped back into new-high ground before everything else. This would be regardless of the duration of the individual stocks' patterns, i.e. 2-3 week patterns would suffice.

However, this is a different type of market. The Nasdaq being above the 20 ema would be a requirement for us to take a look at fresh-money breakout buys in stocks. Even then, there are not many issues holding up amid the selling.

System R

In '19, the service used my favorite short-term system called System R to enter long positions in TQQQ, the 3x QQQ ETF. The results exceeded expectations. At the time, this served as our QQQ model. The system does best early in a new trend, and not as good in a mature trend as momentum often wanes.

The following equity curve and stats table came from a forward test I did years ago using System R with a universe of about 30 issues, about 22 being commodities. It was the inspiration for what I hope to do with System Seven. Depending on what the Seven testing looks like, it may be a good idea to combine it with R. This would reduce volatility, likely produce a smoother equity curve, and increase the frequency per month.

In any case, an adjustment to the service will be to again integrate System R with TQQQ and SQQQ. Both are pullback setups, especially Seven.

I realize that not everyone trades pullbacks, so I will say that the base breakout trades are, and will remain, the foundation of the service.

Among the names, the following are not on the Focus List, but are some of the best actors on the Watch List. They are worth monitoring in the event this nascent rally becomes a tradable one for more-aggressive types.

Akero Therapeutics (AKRO)

Cross Country Healthcare (CCRN)

Paylocity (PCTY)

In summation, the averages are in downtrends. Individual titles do not show much leadership outside of defensive types. Cash is king.

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