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Forward Into The Past October 1, 2022

Posted by Tom in Thoughts.
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September 30, 2022 –  The markets made a new low on Friday, touching the same price level going back to August, 2020.   (yes . . .  2020).  We’ve had one “tradable rally” since the peak in January of this year but I decided to only take a few small positions, then “down the hatch” it went and sold them out.

click on chart to enlarge

Where from here?  The blue lines show my current ‘Plan A’ thinking with a recovery bounce next week followed by a lower low; likely to around the 9663 area.  But . . . there is always a ‘Plan B’ if ‘Plan A’ doesn’t materialize.   Volume this past week is low and traders are not anxious to stick their necks out, nor am I, at least not yet.

Here’s a pie chart of the strength of all of the stocks in the S&P 1500 Index –

The darkness of the color indicates the strength of the price relative to their Bollinger Bands and their direction.  Not much green and a whole lot of red.  The market is “oversold” so a recovery bounce next week is likely.  But until there are some creditable signs that the economy has at least flatten out and interest rates are likely to stop rising we are susceptible to another leg down.  In short, we need to see a few positive signs and we really have not seen a washout of investors throwing in the towel.  That might be coming.

Here’s the Short Term Sector Strength table –

Again, not any positive signs yet.  I’m heavy in Cash waiting and trying to be patient and not anticipate much.  J   Have a good week.         ………..  Tom  ………..

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.

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