Chart of the Day: Dow Rallies For 3rd Straight Week

JC Parets

October 22, 2022

I'm old enough to remember when stocks would go up for multiple weeks at a time.

They used to call those uptrends where I'm from.

So how about a 3rd straight week of gains for the Dow Jones Industrial Average?

That's something you don't see every day:

That's over 2350 points added to the Dow in October, more than an 8% gain.

We're in the sweet spot of the best time of the 4-year presidential cycle to be buying stocks.

"Buy in October and get yourself Sober", is how I learned it from Jeff Hirsch.

Looks like the market is acting accordingly.

Our long positions are working. Our shorts are not.

That's information.

They're having a hard time knocking down stocks, especially the worst ones.

Did you see NFLX?

There are stocks that are working. We want to avoid the ones that aren't. There's a reason they're not working, and we're not going to sit around waiting to find out.

See: Own Nothing Below June Lows

And here's the catalyst.

If you plan on making money long stocks this quarter, or for the rest of the quarter anyway, I think this is it. See: US Dollar Charts.

Without a weaker Dollar I think it will be tough to make money long stocks, except probably Energy.

The rising Dollar has proven to have little effect on Energy stocks.

But in general, I think it will be much much easier to make money from the long side if the Dollar starts to weaken.

For those of you who are rooting for that particular outcome, here's a potential bearish momentum divergence on the Weekly chart of the US Dollar Index: