Sentiment and Divergences are Pointing Up

Weekly Stock Market Levels - 10/18/22

Markets do not top together, nor do they bottom together. It’s critical to find the leading markets for clues on what’s about to unfold. We saw this in 2021 with global markets all topping throughout the year. Today, we are seeing them bottom one after the other.

We’re also seeing this pattern with various risk-on markets. Transports, high beta, biotech, and small caps, all made higher lows as the broad market made one more low. These assets tend to lead us down, which we were seeing in 2021, but they also will lead us up, which seems to be playing out now.

This week, we will look at these patterns, as well as define the current price range for the broad market. Divergences can provide an early warning signal, but unless the market breaks out of key resistance levels, we do not have confirmation of the trend change underway. I detail this for you more below and also feel free to check out my weekly webinars on YouTube where I discuss broad market levels.

10/18 Broad Market Levels Timestamps

00:00 - Stock Market Intro: The Gap Up from the August Downtrend

03:20 - The Price Range That Really Matters

06:00 - Divergences in the Dow Jones Transports, High Beta Stocks, and Financials

08:18 - Divergences and International Markets (German, Chinese, and Japanese Markets)

12:03 - Get more technical analysis. Sign Up for Free Stock Analysis

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About I/O Fund Portfolio Manager Knox Ridley

Knox Ridley began consulting on portfolios in 2007 and is an experienced growth investor in both bull and bear markets, which is hard to find these days. As the portfolio manager of the I/O Fund, he beat the top-performing funds on Wall Street in both 2020 and in 2021. His real-time trade notifications to premium subscribers have garnered 27 entries with over 100% gains in the last two years. Knox began his career as an ETF wholesaler in 2007 before becoming a portfolio consultant for large RIAs, FAs, and Institutional accounts. He is very keen on macro trends and is trained in Fibonacci Trading, Elliott Wave theory, as well as Gann Cycles. He also uses classical technical analysis to manage risk and identify great risk/reward setups. Knox is known for increasing and decreasing allocations for record-breaking returns.

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Please note: The I/O Fund conducts research and draws conclusions for the Fund’s positions. We then share that information with our readers. This is not a guarantee of a stock’s performance. Please consult your personal financial advisor before buying any stock in the companies mentioned in this analysis.