{"id":21302,"date":"2023-10-24T07:30:41","date_gmt":"2023-10-24T11:30:41","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=21302"},"modified":"2023-10-24T07:30:41","modified_gmt":"2023-10-24T11:30:41","slug":"how-the-sausage-is-made","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/how-the-sausage-is-made\/","title":{"rendered":"How the Sausage is Made"},"content":{"rendered":"

Stock market bottoms are like sausages…<\/p>\n

It’s not pretty to watch how they’re made, but the end result is delicious.<\/p>\n

Last week’s action in the stock market was ugly.<\/p>\n

The S&P 500 is back down to the early October lows. It closed Friday below its 200-day moving average line, which is widely viewed as critical support.<\/p>\n

And with all of the geopolitical concerns around the globe, buying stocks is the last thing most investors feel like doing at this point.<\/p>\n

But from a risk\/reward perspective, it’s certainly better to be a buyer of stocks today with the S&P 500 near 4200 than it was last week, or even back in July.<\/p>\n

From a technical perspective, we have a much better setup for a stock market bottom today than we did earlier this month.<\/p>\n

Regular readers will recall that two weeks ago we pointed out that the broad stock market was setting up for a bounce<\/a>, but we didn’t yet have the setup for a sustainable rally.<\/p>\n

The problem was that October bottoms usually occur with positive divergence on the momentum indicators. And two weeks ago the daily chart of the S&P 500 didn’t show any divergence.<\/p>\n

That problem has now been solved.<\/p>\n

Take a look at this updated chart of the S&P 500…<\/p>\n

<\/p>\n

\"Image\"<\/p>\n

Similar to what happened last October, the S&P 500 has made a lower low, but the technical momentum indicators at the bottom of the chart are all making higher lows.<\/p>\n

This sort of positive divergence often occurs at the end of a decline phase and leads to the start of an intermediate-term rally phase. We didn’t have this divergence in place two weeks ago. So all we got was a modest bounce off of oversold conditions.<\/p>\n

Now though, after last week’s ugly action, the conditions are in place for a sustainable rally into the end of the year.<\/p>\n

<\/p>\n

\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n

<\/p>\n

Of course, there aren’t any guarantees.<\/p>\n

For reference, though, traders who bought into this same type of setup last year enjoyed a 14% gain in the S&P 500 within six weeks. A similar move this year would have the index trading at new highs for the year by Christmas.<\/p>\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark<\/p>\n

<\/p>\n

\n

READER MAILBAG<\/h2>\n<\/div>\n

Will you take advantage of these actions or hold off?<\/p>\n

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Stock market bottoms are like sausages\u2026<\/p>\n","protected":false},"author":55,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-21302","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=21302"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21302\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=21302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=21302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=21302"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=21302"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=21302"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=21302"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=21302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}