Trading Places Live! November 28, 2022
Tom Bowley: Good morning, and welcome to this Monday, November twenty eighth two thousand and twenty-two addition of trading places live at earnings beats dot com I'm. Tom Bowley, chief market strategist here at earnings beats, and i'll be your host for the next thirty minutes, Tom Bowley: featuring everything you need to know, as you prepare for the trading day ahead. Tom Bowley: Well, we are now past the first part of this holiday season, as uh Thanksgiving Tom Bowley: week is behind us. Uh, now we will speed toward Christmas, the end of the year, and of course the beginning of uh twenty, twenty-three got a few more days here in November before we get into December historically.
Tom Bowley: Um November end of November beginning of December. Our uh pretty decent periods for stocks uh Us. Equities tend to uh perform quite well during this period of the year, really through year end, although we do have a period coming up, Tom Bowley: it's about a ten day period from about the fifth or sixth of December through the fifteenth, Tom Bowley: which can be a little difficult. We also have a fed meeting coming up up. I believe it's the thirteenth and fourteenth, and then we've got inflation key inflation reports coming up around the thirteenth. Uh, I believe So Tom Bowley: uh these, the the fed meeting, the inflation, all kind of fit into the end of what historically can be a difficult period within a more bullish historical um uh period, Really, from about November twenty second, through the end of the year. That's when we tend to see
Tom Bowley: the uh market uh perform pretty well. Tom Bowley: Um, let's see. We've got um futures Tom Bowley: uh down this morning Tom Bowley: as we head toward the the market open, they are off their worst levels. Um, we're seeing the Dow Jones right now down about one hundred and eighty-eight S. And P. Five hundred down twenty-eight Nasdaq down sixty-nine
Tom Bowley: uh us ten year treasury yield. This morning is relatively flat. We're down about one basis point three point six nine percent Tom Bowley: crude oil prices down another two bucks, though today seventy-four dollars per barrel that's another two and a half percent down, so uh that may have a negative impact on the energy group today, so we'll keep an eye on that. But overall um, you know, as we head into year end. Tom Bowley: We've got the the major indices, and we'll look at those major indices just a few minutes, but that we do have those at least pointing up, trending higher above key moving averages price. Configuration. Right now in the short term is bullish. Tom Bowley: More intermediate term. We're still trying to figure out whether or not we're breaking into this down trend that we've been in throughout two thousand and twenty-two So we're in it's gonna take some time to get confirmation there. My signals. I wrote a article yesterday Tom Bowley: over at stock charts, laying out uh some of the things I think are really important in the market right now, especially when you consider them relative to what we saw going into the year, Tom Bowley: we had a lot of issues going into two thousand and twenty-two Tom Bowley: I was extremely cautious, and the only reason I wasn't bearish outright bearish to begin the years because we are an all time high Tom Bowley: price action is number one. Tom Bowley: So if price actions moving to an all time high. It's really hard to be bearish. However,
Tom Bowley: when you've got warning signs everywhere it's telling you, Hey, be careful. Things start to break down. Tom Bowley: It's not going to be pretty, and that's what happened. January. We broke down, and we know what's happened since then. Tom Bowley: We're not there anymore.
Tom Bowley: Everybody now is pointing to all the news. Well, the news back at the beginning of the year wasn't that bad the Tom Bowley: certainly not as bad as it is now, Tom Bowley: I mean, interest rates are still historically low. Tom Bowley: Now look at where they are. Tom Bowley: Look at where the Feds positioned versus where the fed was at the beginning of the year. Tom Bowley: So we didn't have all the negativity in terms of news. And of course no one really focuses on anything bad when we're setting all time highs. Tom Bowley: But Tom Bowley: there was a price that was going to be paid for a lot of the issues that were beginning to appear at the end of two thousand and twenty-one, and we now see what that looks like.
Tom Bowley: Um! Let's see what else Tom Bowley: Let me um first Tom Bowley: for those of you who are new first of all appreciate you stopping by thanks for Tom Bowley: tuning in. I do want to make sure everyone is aware Tom Bowley: that, uh, Tom Bowley: we do have a free newsletter. So if you go over to earnings, beats dot com, and you scroll down, Tom Bowley: you will see in the area where you can subscribe to our three times a week. Newsletter. It's free. No credit card required. You can unsubscribe at any time name and email, address all it takes um hit that subscribe button. In addition to the free newsletter, we will make sure you are Tom Bowley: um given room instructions for any free events that we have, and I can tell you what Tom Bowley: anyone that was at our free Tom Bowley: market vision two thousand and twenty-two event, Tom Bowley: and paid any attention and followed anything any of what I talked about Tom Bowley: probably feels a lot better right now than if you didn't Tom Bowley: um, because some of these things that we have seen and felt in two thousand and twenty-two were discussed back on January eighth, two thousand and twenty-two Tom Bowley: sent them in issues. Tom Bowley: I mean Things Were just starting to turn really bad for sentiment to begin the year.
Tom Bowley: So there was a process what I call sentiment reset. We needed to get folks more bearish. Tom Bowley: We were so bullish options, traders. The Wall Street folks read it. Tom Bowley: Everybody thought the market was going to go higher, Tom Bowley: and when everybody pours into one side you get to an extreme. We usually see the opposite happen, and you know that was contrarian indicator, a major one, and we saw what happened. So anyhow, there's a lot of great stuff that we put in the eb. Digest. But also you want to make sure you're um,
Tom Bowley: You know you're aware of any of the free events we have, so we do have market vision two thousand and twenty-three coming up, and it's hard to believe, but it's just a little more than five weeks away, Tom Bowley: so it will be. Actually, it will be uh five weeks from this Saturday, or six weeks from two days ago. Tom Bowley: Um, mark your calendars It's Saturday, January seventh, two thousand and twenty-three, where I will take a look at everything i'm seeing and give you my outlook for two thousand and twenty-three, Tom Bowley: and not meaning Pat myself on the back. But if you've been at the last three market vision events, you know that i'm three for three Tom Bowley: in terms of giving you pretty good guidance for the balance of the year what I'm seeing. So you want to make sure you tune in for that. Got some great folks from stock charts that are going to be joining me for that event just like they did last year.
Tom Bowley: Uh, So you're gonna be hearing more about that here over the next um few weeks, but just mark your calendar. Saturday, January seventh. Tom Bowley: Okay, Um, let's take a look at what happened at the end of last week, because there wasn't Tom Bowley: I mean the Dow Jones was up another hundred and fifty-three points. Okay, that's great. Tom Bowley: Actually, confirmed we we broke out to the highest level in the Dow since back in April on Thursday or but Wednesday. Thursday, of course, was Thanksgiving Day. So on Wednesday we broke out, and then Friday. Of course, it was a light volume, half, you know, shortened trading session, so I don't know how much exactly we can take away from that. Tom Bowley: But the dow did tack on and go to another high. So we had two consecutive highs last week, dating back to April of this year, so the dow has been performing extremely Well, there are a number of reasons for that Number one. We've seen a lot of rotation into financials and industrial. Tom Bowley: That certainly is, help. The dial versus the other major indices. We've also seen the dollar finally weaken. Tom Bowley: Many of those dowed stocks are multinationals, Tom Bowley: and when the dollar starts to weaken, that can improve their earnings from overseas.
Tom Bowley: So there's some things that are certainly aiding the dow right now. Um, but honestly, the dow just underperformed by a lot for a quite a long period of time, and I think the dow is playing a little bit of catch up. I think this combination of all those things Tom Bowley: the S. And p five hundred was flat on Friday, Nasdaq down fifty-nine, so you can see uh, uh, definitely um Tom Bowley: you know a different picture depending on which index. You're looking at
Tom Bowley: um. I'm a little surprised. I'll be honest. I'm a little surprised. The Nasdaq performed as poorly as it did last week on a relative basis. You can see the dial breaking out above where it was earlier in this or excuse me in November. Um. The S. And P. Five hundred breaking out from where it's earlier High was in November, Tom Bowley: Nasdaq, not able to reach that high, yet we did bounce off the twenty, so we've got all the positive configuration, but on a relative basis. Tom Bowley: That was what I didn't like last week, because we've gotten far enough away from Options expiration. Now, where I would have thought the lower interest rates that we saw last week would have really spurred the Nasdaq on, and it didn't Tom Bowley: so mark It's not always easy, and that's one thing that's kind of got me scratching my head right now. I'm going to be honest with you, and we'll see what happens this week. Tom Bowley: But with the ten year treasury now down, back, down, around three hundred and seventy, maybe moving below three hundred and seventy, we should start to see money rotating into Nasdaq stocks. So that's one thing i'll be watching for um pretty intently. Tom Bowley: Mid caps up eleven on Friday, small caps up two and a half on Friday, so everything was flatter up except for the Nasdaq there. Real estate health care utilities led on Friday. So again, that's not a great look,
Tom Bowley: Nasdaq lagging. And why was the Nasdaq lagging? Well, Technology and communication services were the two worst performing groups. Tom Bowley: They both remain in solid up trends above the twenty day, which is above the fifty we're finally just now getting that golden cross on the Communication Services group. This was one of the last to do it. Um, but it finally. We're getting the twenty date across above the fifty price actions above. We got work to do, though. Tom Bowley: I mean you can maybe look at this trend line being snapped in mid November, and then we test the twenty we're starting to come back up. We need to see breakouts, though.
Tom Bowley: So communication services, technology, the Nasdaq up here. These these are three that i'd be watching to see if we can get back up above that November high. That would be a another bullish signal. If we can get that Tom Bowley: all right. Ten year treasury yield. There's not a whole lot going on today in terms of economic reports uh things will definitely pick up later in the week, though. Uh tomorrow. We've got a couple of housing reports the case sheller home price index, the Fh. Fa. House price index both out in the morning. Tom Bowley: Consumer confidence will be out tomorrow morning. Tom Bowley: Wednesday. We've got adp employment report, Tom Bowley: and the Q. Three Gdp: Second estimate. Tom Bowley: Um. So last month I think the Gdp came in two point six. We're expecting that just maybe to tick up a little bit. Two point. Seven percent
eighty P. Employment report last month was two hundred and thirty-nine thousand Tom Bowley: forecast. Right now are the consensus estimates two hundred thousand. Tom Bowley: So we got a little bit of, maybe little bit of weakness coming into the jobs number. At least, that's what the market is expecting. I think that would be a good thing. I'd like to see the number stay positive, but i'd like to see it come in below last month, and maybe being below the expectation of two hundred thousand Tom Bowley: um. And then on Friday we've got non farm payrolls coming up. So it's gonna be a busier week starting tomorrow in terms of the uh economic reports. And of course the Fed's gonna be watching all of this as it gets set two weeks from now to decide what they're going to do with interest rates. Tom Bowley: It's widely expected that they are going to begin to um lower Tom Bowley: the rate. Hikes we've been seeing seventy-five basis points. Market is now anticipating fifty. I don't think if they do fifty, it's going to change anything, I think. Obviously, if they did less than fifty or more than fifty, it would have a significant impact. Tom Bowley: But I think if they do fifty, I don't think that's what the market's really going to be looking at. I think the market is going to be stock market anyway, and bond market, for that matter, gonna be looking at what the Fed has to say.
Tom Bowley: Are they seeing signs that suggest that this moderating rate hike program will continue. Tom Bowley: That's what the market wants. Stock market wants to hear. Uh we'll see what they come up with. Uh, but that'll be in a couple of weeks along with couple of key inflation reports, especially the consumer price index, which will be released. I believe it's on Tuesday the thirteenth. Tom Bowley: Um, but uh, might. I'll have to double check that, and please double check me. Um, but I believe It's Tuesday the thirteenth, that we'll get that next Cpi report. That'll be the November Cpi released on December thirteenth.
Tom Bowley: Okay, Um. Tom Bowley: Looking at the ten year treasury on as we've been coming down. You can see the financials actually have been continuing to move higher on a relative basis, as have the industrial, and that's what I was talking about earlier with the Dow Jones out performing Dow Jones tends to do well when these two groups do well, Tom Bowley: because you got some key financials and industrial more, they're more heavily weighted on the dow than they are on the S. And P. And especially on the Nasdaq. Nasdaq is
Tom Bowley: uh the Nasdaq. One hundred does not have financial representation Directly you don't see any banks or anything like that in there. They have a couple of stocks that maybe are a little bit financial oriented like Paypal. Tom Bowley: But for the most part they're not really the Nasdaq One hundred is not represented much by financials. So that's why, when you've got financials and industrial doing well. You typically see Tom Bowley: the Dow Jones outperform. And I can tell you historically,
Tom Bowley: this is the time of the year November, uh October, November, and even into some of December, where we do see financials and industrial perform well on a relative basis. I've shown this before. Tom Bowley: Let me uh point out the seasonality right here. Tom Bowley: So if we look at the financial seasonality, I mean, you see, the last five years pretty strong. But if you go back to the start of this bull market Tom Bowley: right here. Financials, I mean. You can see October, November, December this isn't just this year. Tom Bowley: This is pretty much every year.
Tom Bowley: The Xl. If you add these three going across here have average. The Xlf is averaged Tom Bowley: nine and a half gains Tom Bowley: in the fourth quarter. That's an average game over the last ten years nine and a half each year. Tom Bowley: Doesn't mean. It's going up nine and a half every year. But i'm that's the average. Look at what the other quarters have done. Tom Bowley: First quarter minus zero point, two percent, Tom Bowley: second quarter, Tom Bowley: two point, four percent, Tom Bowley: third quarter, Tom Bowley: two percent, Tom Bowley: and then the fourth quarter, nine and a half. This is when the financials tend to roll,
Tom Bowley: and if we Tom Bowley: look at it relative to the S. And P. Five hundred, Tom Bowley: and we go back. You can see on a relative basis October, November, and even December to a lesser degree Tom Bowley: outperform. Tom Bowley: That's three point six percentage points out performance by the Xl. F. Over the S. And P. Five hundred on average, over the last ten years.
Tom Bowley: First quarter Tom Bowley: minus one point, three percent second quarter minus zero point, three third quarter plus zero point two. Tom Bowley: This is the quarter when financials perform well, Tom Bowley: so Tom Bowley: yes, the Nasdaq's been underperforming. Yes, the dial is outperforming. I'm concerned because rates coming down. But then you've got the seasonality that says this is normal, Tom Bowley: so Tom Bowley: it's hard to really draw any major conclusions from what's taking place, I guess that's best way to put it at this point. Tom Bowley: All right. Looking at the S. And P. Five hundred. So here's that price configuration I was talking about. So you got the Ppo on the daily chart rising, So that means bullish momentum is accelerating. If you're not, if you don't understand what the ppo is. Tom Bowley: It's essentially a look at the twelve day and twenty-six Well, on a daily chart it's a twelve day and twenty-six day Ema. Tom Bowley: This plots the difference between those two moving averages on a percentage basis.
Tom Bowley: Now, if you just want price basis, we we'd use the Mac D Tom Bowley: moving average convergence divergence that just looks at price. Tom Bowley: This looks at percentage the Ppo. So when you're moving up, it's telling you that the percentage difference between the short term moving average or the twelve day Ema and that longer term moving average the twenty-six day Ema Tom Bowley: they're the twenty-six days pulling away for excuse me, twelve days pulling away from the twenty-six day. Tom Bowley: So the short-term momentum is building Tom Bowley: that's what this tells us. Now It's just one piece of the puzzle you can see we had this back in August, and we turned right back around Doesn't mean we're not going to go back down. We did this back at the end of March
Tom Bowley: before we went back down. Tom Bowley: I'm sure some of you who are Barris or saying, Okay, Finally, Tom, you're seeing what's going on. Tom Bowley: Well, i'll tell you, Ba. Read my article. Tom Bowley: The difference is where we stand now, versus even where we were in August, but especially where we were in March or the end of the year. In December
Tom Bowley: we're miles apart. Tom Bowley: Everything's changed. Tom Bowley: This right here started with a positive divergence, not only on the daily chart, but also on the weekly chart. Tom Bowley: If we pull up that weekly chart on the S. And P. Tom Bowley: Notice back at the beginning of the year, when we were Topping. Look at the Ppo. Continually going down on the weekly chart Tom Bowley: Upside momentum was slowing.
Tom Bowley: Money was moving into defensive areas. Tom Bowley: Sentiment was off the charts bullish. Tom Bowley: Once we broke down in price. There was nothing for the bulls to hold on to. It was a free fall. Tom Bowley: Everything's different now. Tom Bowley: Well, I mean i'm not going to say everything. But most things are different now. Tom Bowley: Look at the lower price here, accompanied by the higher Ppo. Now, instead of a negative divergence at with the top. We have a potential,
Tom Bowley: foolish divergence, positive divergence at a bottom Tom Bowley: where we're moving up off. Of that, Tom Bowley: this negative divergence created a situation where price action grew weaker and led to a cyclical bear market. Tom Bowley: Now we don't know what this positive divergence is going to lead to, I suggested, when we saw that we were going to get a fifty week test, Tom Bowley: possibly test that August high. I think that's where we're heading the Tom Bowley: but we don't really confirm Tom Bowley: that this is now a longer term. Up, trend until we break this down trend, get through the fifty, and get above that recent high, so that we can change this lower, low, lower, high pattern that we have been seeing all year. Tom Bowley: So there's still work to be done, Tom Bowley: but a lot of technicians will wait until you've done all that work, and then say, Okay, now, i'm bullish.
Tom Bowley: Well, if you didn't, get bearish until after the market fell apart, you didn't get bullish until it recovered. What did you save? Tom Bowley: That's why we have to look at these other signals and evaluate risk. Tom Bowley: It's all about the evaluation of risk. It's not about being right at the top, being right at the bottom. It's about realizing the risk. Tom Bowley: Profile of the market has changed the Tom Bowley: that's what all this comes down to for me Tom Bowley: once we drop down, I mean, may everything still look bearish to me in May. It was the June low that I saw things beginning to change, Tom Bowley: and then we just had other signals. We've continued to be extremely bearish. I think the fed helped in some, Tom Bowley: you know respect with its August the twenty fifth speech more pain ahead.
Tom Bowley: I think that delayed the inevitable. I think we are already moving up. Tom Bowley: I think that just put a two month temporary calls into what we already had started, Tom Bowley: so I believe this one continues to go. We'll see. I mean what we pull back. Of course, we're going to have pull back from time to time. I would watch, I mean. Now we've got the twenty week moving average thing at thirty-nine nineteen. If we go back to the daily chart. Where's the twenty day? Thirty, nine, sixteen, we know three thousand nine hundred is a big level Tom Bowley: watch. That area. That, to me is the very, very first thing to the Downside. We've got to watch three thousand nine hundred
Tom Bowley: below that. Maybe that consumer price index report that came out. We gapped up. That was the October report that was released on November tenth Tom Bowley: that open right there was it three thousand eight hundred and fifty-nine thousand eight hundred and sixty, basically on the S. And P. So throw that in there that's just below the three thousand nine hundred. That's your key area of support as we move forward. Tom Bowley: Nasdaq. One hundred like, I said, not really performing as well on a percentage basis which is somewhat concerning, although we know this time of the year, like I pointed out, is not the best historically, for the Nasdaq Tom Bowley: Um.
Tom Bowley: From a configuration standpoint, though we have broken above the twenty, the twenty is broken above the fifty, the ppo strong above the zero line, and rising, we've gone down. We've held the twenty day. Can we continue to hold that twenty day? That's going to be the first test, Tom Bowley: and then below that Tom Bowley: We've got that gap support from November tenth, eleven thousand three hundred and fifty. That's the one I'm really watching. So that's four hundred points. So it's a little less, maybe three and a half to four percent Tom Bowley: potential to the downside. Tom Bowley: So when you're starting an up, trend it doesn't mean you go up every day. I'm not looking for the market to go up every day we'll have pullbacks. Tom Bowley: One thing to continue watching are the pullbacks mostly limited to the morning. We've seen that I've been talking about manipulations back over the summer.
Tom Bowley: I mean, if I showed you if I updated the fact, we can't do it really with the index. But if we pulled up, say the Qq. Tom Bowley: And I've done this Tom Bowley: and shown this in the past, but the queue queue since June to where we are right now is probably up Tom Bowley: seventeen, eighteen, seventeen off that low, Tom Bowley: but gaps and first thirty minutes of trading were probably down thirty dollars Tom Bowley: from here from middle of the June. If you netted all these gaps, Tom Bowley: and the way we traded in the first thirty minutes. Tom Bowley: We we have seen a lot more buying over the balance of the day than just the seventeen dollars. Tom Bowley: It's probably more like forty dollars, forty five dollars, Tom Bowley: because everyone still fearful. I believe. Wall street's taking advantage of folks. I think that's why market makers Remember, market makers are in these big Wall Street firms. That's where these market makers are. They're not some independent company. Goldman Sachs has a market making unit.
Tom Bowley: So Goldman Sachs has the ability to go on Cnbc. And tell you the sky is falling, and meanwhile their market making unit is buying all the shares you sell. Tom Bowley: Does it not feel strange that over the last five months that we continue to see big drops at the open, just like we saw back in the first five months. Tom Bowley: But instead of continuing down, we have buyers throughout the balance of the day.
Tom Bowley: That's kind of strange. Tom Bowley: Maybe you don't think that means anything that's fine. We all interpret data differently. Tom Bowley: I happen to think it's a lot of manipulation going on. I happen to think there's a lot of accumulation taking place on Wall Street, Tom Bowley: taking unsuspecting folks money as they continue to sell. Worried about all the news that's out there. Tom Bowley: We'll find out. Maybe we turn and go to New Lows, and this bear market continues for another year or two. I have. I don't know. Tom Bowley: I wish I knew for sure, Tom Bowley: but I believe it's ended, Tom Bowley: and I think if the configuration here holds up, we hold rising twenty days, we move to new highs.
Tom Bowley: Interest rates continue to drop the fed stops. It's Tom Bowley: we're going to keep raising rates, you know. Crazy, you know. Seventy-five basis points. Tom Bowley: I mean, they're saying It's had a little limited of impact. The interest rate hikes the Tom Bowley: We don't have a demand problem. We have a supply problem. Tom Bowley: It's the supply chain Tom Bowley: that Hasn't called up.
Tom Bowley: That's what's driving inflation. It's not demand. So raising rates is simply going to squash demand. They're trying their best to kill demand, Tom Bowley: but not too much. I really think that's their plan. Tom Bowley: We want Tom Bowley: everyone to feel bad about things. We don't want people to feel good. We don't want them spending money. We want to raise rates. We want to encourage folks to hang on to their cash, not spend it. Tom Bowley: Let's let supply catch up, and then when it catches up, Then we'll let go, Tom Bowley: and we'll. We'll, you know. Jump off of the gas pedal on the interest rate hikes. I think that's what they're shooting for.
Tom Bowley: Is it the right policy I don't know. Look at what the market's done this year. Tom Bowley: Been a rough year, Tom Bowley: of course, like I said, the beginning of the year we really needed it. We needed to reset sentiment Tom Bowley: all right. Um dow, Jones. So this one is the one that looks a lot better, and you can see last two days. We have closed above the August High. We closed above this early May high, so we are now at the highest level on the Dow Jones that we have been at since back Tom Bowley: on April the twenty second Tom Bowley: since April twenty second. That's a long time. Tom Bowley: I don't know not too many bear markets Tom Bowley: show a major index trading at a seven month high Tom Bowley: during the bear market. Tom Bowley: I'm just saying Tom Bowley: uh mentioned the dollar. So here, look at the dollar over the last month and a half. This is one of the reasons why the dial is also getting a boost. Now the dollar was rising earlier in the dials been outperforming. So
Tom Bowley: i'm not trying to paint. The dollar is, you know. Look at the dollar, and that'll tell you what's going to happen with the dow, but I do know that there are multi nationals, many multinationals on the down largest thirty of the largest companies in the world, and they do generate a lot of their profits overseas. And so when you've got the dollar dropping like this, it actually helps Tom Bowley: them in terms of showing higher profits. Those profits come over to the Us from overseas Tom Bowley: and are translated even higher. Tom Bowley: And so that's a big component of, or at least a big piece recently of what's taking place with the dow. Tom Bowley: All right. I want to talk just briefly about medical equipment stocks. Um. I mentioned one in the eb digest this morning. We have two in our portfolios this quarter. I'm seeing some improvement here, and maybe it rolls over and doesn't last, Tom Bowley: but I think it's worth at least noting. I like to connect the lows when you're going through a down trend, and then drag that line up and connect to highs and see if I can form a channel when I take this line that perfectly connects these two lows, and I drag it.
Tom Bowley: I perfectly connect four highs, Tom Bowley: the one in April, August, September, and November. The slope of these lines is identical, Tom Bowley: and the way you do that at stock charts is when you annotate Tom Bowley: and you hover over one of these lines Tom Bowley: and on an app or an apple that I've got the Macbook air I hit command in the left corner of my touch pad now that one doesn't, Of course it's not going to work me. Try it again Tom Bowley: there. So you see how you just drag it. I draw it right over there and put it placed it right on top.
Tom Bowley: See how that perfectly connects all of those tops. That is what's called a pretty strong Channel. Tom Bowley: And look at what we just did here in November. This was the Cpi Day, Tom Bowley: October Cpi. That's when the market had the big update, and that's when medical equipment that day broke above this trend line, and since then it's gone up it's pulled back, tested the twenty day, and it just went to a new high. Tom Bowley: This is showing very, very bullish. This is Tom Bowley: definitely a bullish signal to me. These are
Tom Bowley: um highlighting. What I think could be a rather significant move to the upside in medical equipment. Stocks. Ppo looks great. Tom Bowley: There's your ad line. We've been going down all year and look at the Ad. On stubbornly refusing to go down staying near it all time high. Tom Bowley: All of those, I think, are bullish signs now. Can it roll over? Of course the market can do anything at once,
Tom Bowley: but I think to ignore these three Tom Bowley: signals Tom Bowley: is really to remain Tom Bowley: with a tremendous bearish bias. Tom Bowley: I can, I, you know, while we're in this down trend. I get it. But now that it's broken, we're back to the upside, I think you got to be careful holding on to too many bearish biases. Try to step back and look at what's taking place. Price, action, Tom Bowley: What's taking place, and what has happened throughout the year? Look at the long one hundred year chart we're in a secular bull market. We have been since two thousand and thirteen when we broke out above the two thousand two thousand and seven highs. Now, once you have this information, I know it's just past nine thirty. Tom Bowley: Um! I'm going to show you just how I would come up with a few few stocks within this group, because Tom Bowley: we do a strong earnings, chartless to me. Most of the trades I Tom Bowley: I execute come from our strong earnings chart list, Tom Bowley: because, being a former practicing, Cpa fundamentals are still near and dear to my heart.
Tom Bowley: And so all the stocks on our Tom Bowley: um Tom Bowley: mit ctl and strong Earnings chart list have beaten Wall Street estimates as the both revenues and earnings per share in their last quarterly report they had to have. That is a minimum requirement to get on this chart list one hundred and fifty. Tom Bowley: Then you have to be a liquid. So you have to trade so many shares, and you also need to have something that, excuse me, looks somewhat appealing technically, either being a good group or have your, you know, just have a nice reaction market reaction whatever. Tom Bowley: But these are all the stocks, and there's I don't know. There's probably four hundred and some stocks on here right now but what you can do in this search table. So if you go to the summary Tom Bowley: list, Tom Bowley: it lists all of these um right now it's listing them in scooter order, which is perfect, because when I type in medical equipment Tom Bowley: it will show me all the stocks that are on my strong earnings chart list in scooter order in the medical equipment group.
Tom Bowley: And there they are. And I tell you these top three I really like. Tom Bowley: So first one is Um Shockwave medical, Tom Bowley: big breakout back in August. It's been sideways consolidating. Look at this. Look at these tests right here. I mean, that was the time to get in. Tom Bowley: I mean, this was the annotations that I provided for the last few months, and if you pulled this up Tom Bowley: within the last few days, even you would have seen this testing the top of this gap support, Tom Bowley: and two thirty-eight whatever that number is, down to two hundred and twenty That would have been the best time to enter the stock from a reward to risk standpoint. And now you've got
Tom Bowley: s waves beginning to make a move back to the upside. Tom Bowley: The next one is silk. This is Silk Road, medical, Tom Bowley: and you can see this one is now just recently broken out above these prior highs. Tom Bowley: Ppo looks good um stock. No, we just open so stock down two cents uh no Biggie there Tom Bowley: and then. Finally, the last one is Pod, and this is the one that was in the eb digest this morning. It's actually up a little bit today, even though I think the market was getting off to a little bit of a rough start, but here, with earnings you can see the low that day with massive volume
Tom Bowley: was just below two hundred and ninety. That's when the buyers step back in that day and drove it back to three hundred and twelve thousand three hundred and thirteen. So when you get that kind of a candle. This low can be a very significant support area, and you can see we've been coming down. We bounced off of it here in mid November, Tom Bowley: made a nice little twenty dollar run. Just came down. Printed a hammer right there right near the twenty day, also near this price, Re. Uh well, what would be price support uh was price resistance. Um! But all of that right in there is good area now. It's starting to turn back to the upside. Tom Bowley: And again, These are three stocks in this group that just broke out, and there are three leading stocks.
Tom Bowley: So that's the way I approach the stock market when i'm trying to find trading candidates, is I? It's more of a top to bottom, top down. Approach. I try to find areas where the market strong, and then I try to drop down, drill down to find some of the stocks that are leading those areas. Tom Bowley: So those three will be your three. You must see. Let's go back. Take quick! Look! See what the market is doing here. Tom Bowley: Um! And, by the way, Mondays, historically, or the worst day of the week. That is not just me saying that it's not just me talking about the last six weeks, the last six Mondays i'm talking about Tom Bowley: all the Mondays since nineteen fifty Tom Bowley: the S. And P. Five hundred has had an annualized return since one thousand nine hundred and fifty Tom Bowley: of minus fourteen percent on mondays.
Tom Bowley: That's roughly one-fifth. Tom Bowley: There's a lot of holidays that fall Mondays, but slightly less than one-fifth of all trading days since one thousand nine hundred and fifty Tom Bowley: minus fourteen percent. Tom Bowley: So take those seventy-two years divided by five That would be fourteen years. Tom Bowley: Imagine if we had. If I told you that the next fourteen years we were going to average going down fourteen percent a year for the next fourteen years. How excited would you be about the stock market? Tom Bowley: That's exactly what's happened Tom Bowley: on Mondays since one thousand nine hundred and fifty.
Tom Bowley: That's the equivalent. Tom Bowley: If you went back and only invested on Mondays, you have not done very well, and Here it is. It's Monday, and we're down. Okay, Tom Bowley: Not not too shocking. Tom Bowley: It's what the market does now it's Only down on Mondays. I think it's down fifty-three percent of the time. I think Mondays are up forty-seven percent of the time.
Tom Bowley: So It's not like every Monday. Tom Bowley: But when you consider that Tom Bowley: the Nasdaq Wednesdays through Fridays are up almost sixty percent of the time, the Tom Bowley: Mondays being up only forty-seven of the time. That's at least noteworthy. Anyhow, you can see the market down a little bit. Vix uh pop in. By the way, the vix was down to almost twenty at the close last week. Tom Bowley: I can tell you this.
Tom Bowley: We have never been in a bear market Tom Bowley: that sees a vix below sixteen. Tom Bowley: So as we've come down from the mid thirty s down to twenty. Just keep that in mind Tom Bowley: the volatility index. If it goes below sixteen we have not had a single bear market Tom Bowley: ever. I mean, we are in able market if we get that vix down below sixteen. Tom Bowley: So anyhow, i'll leave you with that. Have a great day, everybody. Tomorrow i'll be back over at stock charts Tv for your next uh trading places live that will be at nine Am. So simply go over there, click on that stock church Tv
Tom Bowley: uh drop down, and then you'll be able to to jump into the room and join me tomorrow at nine. Have a great day, everybody happy Trading.
2022-12-01 03:03
