9 Minute Read

Tackle Today: The oversold bounce has arrived

October 4, 2022

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«We’ve been waiting for you.»


Stocks are leaping this morning to extend yesterday’s rally. SPY is up another 2.5%, and IWM is up 3%. This is the follow-through that was lacking on the previous two attempts (see 9/19 and 9/28), and, well, it’s about time.

If you’re surprised by the jump, let this be a learning experience. While it was impossible to guess the exact day or time of a bounce, it was possible to identify that conditions were ripe for a snapback. To wit:

① The S&P 500 had fallen 13% in a straight line from its previous pivot high, making it desperately oversold. In other words, the rubber band was mega-stretched and overdue for a snapback.

② The selling had become indiscriminate, with every sector flashing extreme oversold readings. Utilities and REITS were particularly disgusting.

③ The VIX had spiked just shy of 35 last week, and we hadn’t yet seen a resolution to the extreme reading.

④ The U.S. dollar (UUP) and bond yields (TNX) both formed pivot highs last week and started to retreat, giving stocks the green light to bounce.

For now, this is a counter-trend rally and nothing more, but it could grow into a trend change if we get enough follow-through.

Video Of The Day: Webinar Replay: Stock Order Types › Limit Orders, Market Orders, and Stop Orders

In this webinar, Coach Gino will break down three common stock order types: #marketorder, #limitorder, and #stoporder.

He will teach the basics of stock market orders, including how to control your entry, stop loss, and target in the set-it-and-forget-it method to order entry.

Here’s what you are going to learn:
✅ What are the basic Market Orders
✅ Learn about Stop Orders
✅ Learn how to apply Bracket Orders
✅ Learn how to Set it and Forget it

Chart of the Day: S&P 500 ($SPY)

Chart of the Day: S&P 500 ($SPY)

The 20-day moving average beckons as the next upside target. Congrats for stringing together two green bars, bulls.

Tales of a Technician

More Reasons Why I’m Buying

Last week’s post was titled “8 reasons why I’m buying stocks”. I’m feeling even more bulled up this week so I wanted to pound the table once again.

Today’s line up

Traders Lounge 11 AM EST

Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.

The Coaches Show 8:30 PM EST

This is our weekly MasterMind group. Join the coaches tonight, 8:30 PM EST to discuss the markets and help you prepare for the week.

Halftime Report 12:30 PM EST

The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.

Tackle Trading: Financial Freedom is a Journey. Sign up now for a 15-day free trial.

Financial freedom is a journey

Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.

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