October 24, 2022

MarketMap™ 2022- Scenario Planner Issue#22

The social media mob is really perky after last week’s performance.

With the majority of commentaries that cross my desk, it’s clear most are moving away from doubt and have bought into the annual seasonal kick-off of a bull market that makes an average of 17% in mid-term election years, from the October low.

Comments range from off-the-seat-of-the-pants use of DMAs, “Highest close for the S&P 500 in two weeks, and just above the 30-day moving average.” Well at least he is unique, I hope he is not back-fitting.

“Positive RSI Divergence on WEEKLY SPX Chart = Bullish – This positive divergence has historically preceded meaningful $SPX reversals”

The problem is his scope is only from 2009 and RSI does not work that way. A deep oversold is a confirmation of a bear and because of its extreme oversold, each subsequent new low is expected to diverge. Hence making that concept (bullish divergence) useless and the most common weakness cited by experienced professionals.

Another bullish twist comes from a good source of market data and information. However, information should not get confused with knowledge and wisdom; and I am afraid to say their analysis.

The Stock Traders Almanac annual book (2023 version is on the market, $100 +/-) is a handy reference tool.  The owner publishes bits in the social sphere like the table inserted below.  The publisher points out that of all the months of the year, October stands alone, since WW2 as the seasonal bear market ender. In other words, that time window starts more bull markets compared to any other month. Can’t argue with that.

But what you find in almost everything you read regarding market data and market analysis is the unwavering bullish tone. Here is what I mean,

This work by Jack Cahn is licensed under a Creative Commons Attribution-NonCommercial 4.0 International