The Shakedown 10-23-22

LAST WEEK, S&P 500 (+4.66%)

Monday:  +2.57%

Tuesday: +1.17%

Wednesday: -0.71%

Thursday: -0.84%

Friday: +2.43%

Last week the market continued it's rally after giving us at least an intermediate-term bottom two weeks ago on the high CPI print. Scanning charts, this is the first time the market has seemed constructive in months. We got positive attributes out of the two factors that have been holding this market down, which is the strength in the US dollar and the rapid rise of the ten year treasury. The dollar was not able to make a new high last week as it began to pull in, which added strength to stocks. Similarly, we saw the Ten Year gap up friday, only to sell off the entire day. The market can continue to rally if these qualities remain.

I don't personally believe the bottom is in for 2022, but I do believe we continue to rally this week and will be looking to trade predominantly from the long side. We have the biggest week of earnings on tap which I briefly go over below. We've got about 700 companies reporting this week, so there is bound to be plenty action.

The big economic data comes in towards the end of the week in the form of jobless claims Thursday and core PCE Friday which has bigger impact of the two as it directly speaks to the inflationary environment.

We've got the next big Fed meeting happening two Wednesday's from now on November 2nd. They are expected to raise the Fed funds rate another 75 basis points. There was a Wall St Journal article that leaked mid day Friday citing the Fed thinking about slowing down their rate rising schedule, which could have fueled the rally. We need to see a meaningful drop in inflation before that happens, so I wouldn't say we've got the "all clear" sign for adding risk just yet. For this week along though, there looks to be much more opportunity from the long side than in weeks past.

Green arrows across all sectors this week as the rally closed strong

Earnings This Week

MASSIVE Week of earnings ahead.

When MSFT GOOGL META AAPL AMZN all report the same week, it's always the biggest week of earnings as the largest portion of the market (from a market cap standpoint) will report.

Some other key names to look out for: UPS, MMM, JBLU, NOC, SHOP, MCD, PINS, ABBV, JKS, HES, GD, FSLR, SPOT, CMG


Love this pharmaceutical name wedging to the point buyers and sellers have created a very tight entry. We want to see this one explode past resistance and force shorts to quickly cover. With a strong move through 24.60, RYTM is looking to run to 30 bucks out of the wedge.

Trigger: 24.60

Stop: $21.89

Target: $30+

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