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Before you Trade Today: Know the Economic Calendar! Also See This Weeks Most Anticipated Earnings (Note: Red on the Earnings Calendar Indicates an Earnings Loss [Not Miss] Consensus), & Yesterdays Insider Buys. NEVER BE SURPRISED BY EASILY ANTICIPATED MARKET BREAKING NEWS. That’s our goal here.

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TODAYS COMMENTARY Get a Cup of Coffee & Enjoy Catching Up! If you aren’t reading this daily you are missing out on a wealth of information that could prevent unforced & unnecessary trading errors.

MARKET OVERVIEW: Some would say this market makes no sense. The insane selling pressure we’ve witnessed over the past two weeks has folks questioning the relative safety of current market conditions. In reality, it makes perfect sense. In yesterdays newsletter I named but a few of many nasty omens facing the market today. Those conditions alone, particularly given the record revenues combined with earnings well short of analysts expectations for many companies, should tell us something. It tells us that inflation is starting to bite … & bite hard.

Sad to say, this is but the beginning! The labor market is still strong (Which is not a good thing). There is still too much money chasing too few goods. And there are plenty of real world bottlenecks holding back production of those goods. It’s only a matter of time before savings are quickly drained & people begin spending more for less … leading to a highly competitive market … & leading to companies making economies on labor, inputs, & production. Things as they stand today are likely stronger than what we should expect in the future.

There may be some bullish rebounds derived from short covering, the market may pump once the inflation numbers come out tomorrow (having gotten that downward catalyst behind us), Shanghai will eventually reopen, the Ukraine war will eventually end (hopefully not via tactical nuke), & current circumstances may look as though companies are trading at a relative value (Folks will chase that value) … but this is still nowhere near the value companies were trading back in 2018 (A bad year by anyone’s account, albeit much more reasonable as far as fundamental valuations go). So be patient, & prepare for even grimmer times.

The market is returning to reasonable valuations, but it isn’t quite there yet. Companies will grow in real value at a much slower pace. The market will price this in. Sure, there may be some decent consumer spending over the summer, but we have to start adjusting expectations. We must expect that any company we buy now, if any at all, will be sitting in our portfolio for a while.

The light at the end of the tunnel is derived from the same culprit that got us into this mess … inflation. When things rebound … eventually, revenues & EPS will be much higher than they are today in nominal value. This is simply because things will be much more expensive & many competitors may be weeded out of the economy. To benefit from this bullish long term upswing, we must be patient. I expect stocks to go even lower from here, I will aim only for profitable companies, I will buy in slowly over time, I will be patient, & I will sell calls against the underlying shares. This isn’t a traders market … this is an investors market. I do not assess a market rebound to new highs to happen anytime soon. The overstimulated economy we enjoyed post covid was a rare outlier in market history.

In any case the market is at a level where its too dangerous to short, & yet the outlook is too uncertain to hop in with both feet. This does not, however, mean you cant stick your toes in the water. I could always be wrong, but my gut combined with a little bit of common sense & history tells me I’m correct.

Significant News Heading into 05.10.2022:

• Stock futures are higher after S&P 500 falls to its lowest level in more than a year

• European markets climb as global stocks look for rebound; Swedish Match up 24%

• Hong Kong leading losses in Asia as tech stocks drag down most markets

• Tech giants lost more than $1 trillion in value in the last three trading days

• More U.S. companies in China cut forecasts, scale back investments as Covid persists

• Bitcoin bounces back slightly after briefly dropping below $30,000

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PAID CONTENT IN THE PAYWALL BELOW:

• 3 Stocks near/at/above the Buy Zone (Waiting to Swing).

• 2 Options Strategies

• 26 Stocks on the Price Based Assessment Watchlist 5 Stocks on the Stocks Under $20 List (Read the Warning/Disclaimer) 6 Stocks on the Highly Speculative Highly Volatile Small Cap List (Read the Warning/Disclaimer) 4 Stocks on the short possibilities list

• A Detailed Breakdown of Yesterdays Earnings Beats & Misses

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