The bears and the bulls are in an intense fistfight with each other. The bears are not able to push the price down and the bulls are unable to make new highs. Each side needs a little help from catalysts such as breaking news or macroeconomic data. So far, it seems we are trading in a volatile daily range. This morning, I traded TQQQ and AAPL, and Thor traded XOM and AAPL in opposite directions. You can watch the recap that we posted here.
Today’s Global News and Financial Recap
The market gapped down yesterday but traded higher. The gap down came as a result of retail giant Target cutting its profit outlook for the second time in three weeks as it rushes to ease an inventory surge by marking down items and canceling orders. It’s also struggling with “unusually high transportation and fuel costs“. The S&P dropped as expectations of a shift in consumer demand away from big-ticket items toward less-profitable staples worries investors. Target isn’t alone in its inventory surplus. Many US retailers – from Walmart to Gap and Macy’s – are also suffering from a mix of late orders, changing consumer tastes, and inflation. Demand may not be sufficient to mop up the excess stock, even with markdowns, as consumers are squeezed by rising prices. Ordering for the Christmas season is certain to be tricky for them.
The World Bank again cut its forecast for global economic expansion in 2022. According to their President, David Malpass: “The world is facing high inflation and slow growth at the same time. Even if a global recession is averted, the pain of stagflation could persist.”
At Bear Bull Traders…
Tonight, for Wednesday Psychology, beginning at 5pm ET, Créde will be leading a presentation entitled: The Art of Setting Goals. Most people are aware of the importance of setting SMART goals to achieve a target. But the art of effective goal setting actually goes much deeper than that. This webinar explores goal setting through the paradigm of “process, performance, and outcome goals”. When you set effective goals, the need for willpower decreases. The process of goal setting itself will create motivation, confidence, and momentum to help you reach even your highest ambitions in trading and in life.
This is the 4th bear market that Dr. Reid is trading in and he has offered to me many insightful opinions about the market and QQQ. He emailed me this morning with his updated chart analysis on QQQ. As you will see below, we did get the expected bounce off the 200 EMA, and Dr. Reid agrees with Brian that it’s unlikely to go much further. As many may know, Dr. Reid was the Chief Market Strategist for 12 years at a large financial newsletter that he was publishing. He wrote to Norm and I:
“The March 2020 low was a “Kill Zone” retracement of the previous 2019-2020 swing. It was precisely 76.4%, which is the bottom of the KZ range. Markets are fractal and repeat themselves, so until proven otherwise, it’s prudent to expect the same level of retracement this time, which would be about 27% lower. Markets exhibit both price and time symmetry… and the time projection for the low is around March 2023, which fits the linear extension of the current downtrend channel. In other words, we are likely to have the same type of market we now have for another 9 months.”
Dr. Reid has offered to host a bi-weekly Q&A group focused on adapting to this new market environment, and I sense this opportunity might help our members maintain a positive attitude while market conditions are suboptimal. As mentioned, this is the 4th bear market that Dr. Reid has traded in, and although each one is different, he would be happy to offer some hand-holding, encouragement, and tips.
Stay tuned for it!
To your success,
PS1: Although it is still in a beta version, you can visit tradingterminal.com to do research on stocks you’re interested in. While we have not perfected it completely yet, it is a great place to not only research stocks, but also crypto and forex, as well as catch up on the latest news. There’s even an earnings calendar to assist you in making trading decisions.
PS2: If you have not already, I urge you to try out our free web-based trading simulator
at stocktradingsimulator.com. It’s conveniently available 24/7, whenever you have time
to practice honing your trading skills.
PS3: Don’t forget, if you are not yet an Elite annual member, you can take advantage of our current promotion and receive 50% off the cost of an Elite annual membership. In doing so, you will also receive a complimentary 1:1 coaching session with Dr. Kenneth Reid. More information can be found here.