 Hey everyone, good morning. Lee Lowell here from smartoptionseller.com. Today is Saturday, October 29, 2022. We're back for another edition of the Saturday Synopsis. What do we do here? It's all about chart reading technical analysis. What's happening in the stock market? I'm here to show you what I've been seeing on the charts. The best way for me to get into and out of trades is by looking at the charts and seeing what the patterns look like, what the support and resistance looks like, what the technical indicators are telling me. So these videos are all about trying to help you become a better trader by looking at the charts and letting the charts tell you what the market wants to do. That's what I've been doing for the last 30 years and it's what I do for my newsletters as well. If you're trying to make money by trading stocks, you need to understand which way a stock may or may not be going. And especially if you're trading options contracts, you really need to understand how to read a stock chart and how to figure out which way a stock may be going. That's the way we do it. That's the way I've been doing it for over 30 years now and it's how I run the newsletters as well. So let's just jump right in, talk about what's been happening in the stock market. We had a pretty big week here and I want to show you how to look at charts and show you what I'm seeing. So let's just jump right in as we do almost every Saturday. We like to look at the SPY first, which is the exchange-traded fund for the S&P 500. In my opinion, the S&P 500 gives us the best overall view of the market as a whole. So we like to use that as our best gauge to how the market is performing. And we use the SPY because it trades just like a stock and it's very easy to trade. It's very easy to follow, very easy to track, very easy to look at the charts. So what you'll see in front of you is for the newcomers out there, this is what I look at. This is my chart. This is my chart setup. I keep it pretty simple. This is a daily bar chart. These are called open-high-low-close bars. These are not candlestick charts. Each one of these vertical lines is one day's worth of trading and I have about two years look-back period on my chart. Down here is what's called the RSI indicator. It's an overbought, oversold indicator. It's got a 14-day look-back period and it's just like a moving average of whether a stock or index is getting overbought or oversold. And the parameters are the 80 level up here and the 20 level down here. And it fluctuates in between those levels and when it gets down towards 20, that means things are getting a little oversold and when it gets up towards 80, that means things are getting a little overbought. Up here in the top, I've got three other lines on the charts. These are moving averages. I've got a 200-day simple moving average here. And it's sometimes a little hard to see. I've got a blue 20-day moving average, this line here, and then a red 50-day moving average. We've got a 20-day, 50-day, 200-day moving average. And the moving averages are used by a lot of people and those same numbers, the 20, 50, and 200-day are followed by a lot of people. So when you have enough people following the same things, the price action tends to do the same things at the same time. Everyone's looking at it. That's just how it works. So in addition to that, we look for patterns. You can see on my charts here, I have a lot of things marked up. You've got this long channel right here. You can see the top line and the bottom line and you can see how the market price action moves within the channel. And we have some other channels here. It looks like an inverted V. And we have these horizontal lines, which are just some support and resistance levels based on price action. So what is happening in the market? What's been going on? We'll look at some of the indexes and we'll look at individual stocks as well. We have third quarter earning season has been happening and we've had some big numbers this week, so I want to take you into some of those as well. But we'd like to look at the overall market first. So here's the SPY. So we've been in since January 2022 right here. The market's been in a downtrend for basically the whole year. We had a little relief from the middle of June to middle of August. This little big uptrend here that has been already moved all the way back down as well. And just the last two weeks or so, we've had this nice little uptrend right here. We can even draw a new channel. Let me move myself over here a little bit. You can draw a new channel here, which is you connect some of the bottoms and you connect some of the tops of the most recent move. And then that is your channel right there. We are in this new little channel here. But what happened was about two weeks ago, right here on this day, this was October 13th, you can see this long one bar right here. Let me open this up a little more. You have this long one bar here where the market opened up to the downside. It gapped open to the downside, meaning it opened a lot lower than where it closed the day before, pushed to the downside. And then what happened was the rest of the day, it worked its way all the way higher and closed higher on the day. That is typically from what I've seen in the 30 years being in this business when you have a massive gap lower like that, that takes it down in the morning and then spends the rest of the day reclaiming the losses and actually closes higher. That is what I've seen over the years, a really tell-tale sign that the bottom may be in or is really a good indicator that the bottom is in. So this one day move here, right here on October 13th, is a very telling day. The good thing is that we have not tested that low again, meaning the market has not come back down to this area again. Now, we have a lot of people out there saying, this is just a bear market rally, another rally, and it's just going to fail at some point. It's going to come all the way back down and possibly even go lower than here, maybe down 340, 330, 320. But as of now, that has not happened. We've been in this nice uptrend here, which is good. I like to see that. What I liked seeing is that here is the downtrending channel and the market moved up and outside of this downtrending channel. So right around here is when we had the move outside of this channel and started its new uptrending channel. I like that. That's good price action, even in the face of some bad earnings this week. So we had the 50-day moving average right here on the SPY that the market was able to close above yesterday, October 28th, Friday. So we have the next line of resistance. This line I drew probably a long time ago on the charts, which was an area of price action that the market was trending towards higher and lower. It started, you had a lot of movement around that area. So it was right around $390 a share on the SPY. So we closed at $389 yesterday. And so $390 will be the next line of resistance, possibly. It may just blow right through it and keep going up inside of this channel. We have up here, here's the 200-day, the downsloping 200-day moving average. It will be the next line in the sand for the SPY to get through if it wants to keep going. That's around $410 a share you can see right here. So the market has had this nice move off the bottom the last two weeks, very constructive, very constructive, even still in the face of rising interest rates, inflation, COVID still out there. The market's come off a long way, right? The S&P 500 and the NASDAQ, which we'll look at, have both come off over 20% from the January highs all the way down to where we made this low here. But the market's rallied back. So that's a good thing the last few weeks. I've been saying the market was in this channel. If it was able to break out of the channel right around, between 370, 375 was where we needed to be to get out of this channel and continue higher, which is what it's done. So I'm feeling pretty good about the market here. I like it in the long run. I'm always optimistic about the market because the market goes up in the long run. It's made above companies that are doing well, that are creating profits for themselves. They're selling products, real products that people are paying for. So you have profitable companies over the long run, the market will go up. Sure, we're going to have times of pullbacks. It's inevitable. But if you're a long-term investor, I'm talking years and years and years, the market will reward you over the long run. So I'm feeling good about the market right here. Look at the NASDAQ because that's been the weakest of the three big ones, which is the S&P 500, the Dow Jones and the NASDAQ. A lot of tech earnings coming out. Some of them not so good. So the NASDAQ has been weaker than the S&P 500. Still has that same pattern. You have the inverted V, but still kind of down here at the lows. We also had the one-day move right here. Did Rallyback has not Rallyback as strongly as the S&P 500, but regardless, it has Rallyback. So that's a good thing. Let's look at the Dow Jones. We'll use the DIA, the diamonds, the symbol here. You can see DIA right here. The Dow has been the strongest of the three. Look at this power move higher. Now when we hit that low, let me check my dates here. So this move right here, that was September 30th. So here was the low. This was October 13th. So we had like a double bottom right here. Double bottom is when the market comes down low one time, tests it a second time, and then rallies from there. So the Dow had this nice double bottom. And look at this power move. And it has actually gotten above, closed above, the 200-day moving average. So the Dow, really strong Dow component, 30 stocks in the Dow doing very well, just powering higher. The S&P 500 is behind it, right behind it as far as strong movement. And then the NASDAQ is in last place, but still moving up. Let's take a look at some of the stocks here, some of these NASDAQ stocks. The reason why the tech industry has been going down. We had big earnings. Let's start with Microsoft, which was the other day this week, had a big gap down. So here's where Microsoft closed. I think this might have been Tuesday or Wednesday. And closed here around 250, and then a gap lower, traded all the way down to 225. So Microsoft was one of the first biggies, the tech biggies that fell, still within this downtrending channel here. So Microsoft then Google had their earnings as well. So you can see the gap moves. So here is where it closed right before earnings, and then you have the gap lower, big move lower here. You can see the air pocket. Air pocket is when here's where it closes one day, and then it opens all the way down here the next day. So Google still on the defensive. Amazon also did not do so well. And Amazon actually fell through some support levels we previously drew. So Amazon here, this was Friday. Amazon's earnings came out after the market closed Thursday. Gapped open lower on Friday. So here was the line in the sand, around 102 or so low 100s, where Amazon tested it many times over the summer, early summer. And it went through it here, but it actually closed above. And how do we know where it closed? We had that little teeny dash mark on the right side of the bar here, right here, a little dash mark. That's where it closed for the day. And closing price is very important, because it'll show where the momentum is by the end of the day. So it closed above the prior support here. So we'll have to see what happens with Amazon. But the big savior was Apple. Apple had earnings after the close on Thursday as well, along with Amazon, and they turned it around. They actually opened lower right when earnings came out, but powered higher closed up almost $11 a share yesterday, Friday, October 28. And here's Apple. So Apple has gotten out of this inverted V nicely powered higher the last couple of days right here, and is sitting right on the 200-day moving average, which is right here. So Apple helped lead things higher. We can actually go back to the one-minute chart and look what happened on Thursday right after earnings came out. Let's go back to Thursday. Where are we here? So this is Thursday. You know, after the market closed on Thursday, you can see Apple closed right around $145, and then we had all this post-earnings action right here. Actually went down to about $136. A lot of up and down, and then just finally it caught its momentum and closed around just under $156. So it rallied about $20 from low to high after earnings came out. So Apple saved the day. So we like to see that. That's good, Apple. So even with these tech earnings, it's keeping the Nasdaq down, but as we saw the S&P 500 and the Dow have started to move higher, which is a really good sign. What other stocks, you know, Facebook, Symbol is meta, they didn't do so well either. So you got these huge, huge tech companies that other than Apple have not been doing so well. You can see the air pocket here, big gap from the earnings. So Facebook is really having its comeuppance here from its all-time highs. Let's look at the monthly chart. You know, Facebook was trading maybe around $375 last fall, September of 2021, and has really, really taken a big hit here. So the last time it was at $100 a share was in 2015 or so. You got to do the look back and see where it was then. So Facebook really not doing so well right now. Let's talk about Twitter. That's a big topic. Finally, the deal closed this week, late this week with Elon Musk finally taking over Twitter. It is now a private company. It no longer publicly traded stock. If you own shares of Twitter, you would have seen on Friday yesterday that the shares were not trading. And why is that? Because it's not a publicly traded company anymore. It's now private owned by Elon Musk. So what happens to Twitter shares? What happens if you own shares of Twitter? Where's your money? What's going to happen? Basically what happens now is that the shares become retired. Twitter no longer trades as a public company. And the buyout price was $54.20, I believe. So for however many shares that you had of Twitter, you will receive in cash $54.20 per share. And, you know, most of us have our shares held with the brokers. So the brokers will pay you what, you know, based on how many shares. If you've had one share, you'll receive a cash payment of $54.20. And if you have 10 shares, you'll get $542 of whatever it is. So don't worry. It's not like you're going to be bankrupt because Twitter doesn't trade anymore. You will get paid out the share price, $54.20 per share. So that really ends the saga of Twitter as a publicly traded company and no longer have to follow the stock. So it actually probably worked out pretty good for shareholders because the stock had been in a big downtrend for a while and Elon Musk made the price pop. So, you know, depending on where you bought the stock, maybe you made some money on it. Maybe you didn't. But anyway, that's the end of Twitter as far as we know it. Let's take a look at some other individual stocks. In our newsletter, we started to get long this week actually. As I said, I like the market action since that bottom on October 13th. The market has moved up and outside of the channel. That's giving me some confidence that the market has probably found a bottom. So we took some new bullish trades in our newsletters this week. We sell put options. We sell put option credit spreads. And for those of you wanting to learn more about this, go to our website. This is our website, smartoptionseller.com. Along the top here are the headers. Go to the put selling basics header. That's where we have our free e-book about what put selling is. How to sell put options. Why is it? Why do we love it so much? So read here and then, you know, put your name and email address. I'll send you an email with a link to download a free copy. It's all about put selling. That's what we do here. And if you want a little more information about our paid newsletters and our paid services, just hover your mouse over here. We have our two newsletters and our coaching services. We're bullish. We play bullish positions and selling put options and selling put options spreads is all about, you know, more bullishly oriented trades. All right. So let's take a look at some other things, some other stocks here that are of interest that could help us. We looked at Microsoft. Let's look at Nike. Nike is a position that we do have on. I am more bullish than not, or at least I don't think Nike is going to keep dropping dramatically like it has been. One good thing about selling put options is that you don't have to predict where a stock is going. You just have to predict where the stock is not going to go. And when you do that, you can give yourself a lot of cushion for error. I can't tell you what the trade is, would not be fair to our paying customers, but we have taken a put selling trade on Nike. This is an incredible company, one of the best well-known brands on the planet. You know, we're taking a stab here. It's come down a long way, and we're getting ready to see the pop in Nike. That's one of the trades we've taken. AMD still kind of hanging around the lows. This is a company that I talk about all the time. I love AMD, but for now I'm sitting on the sidelines. It's still in this downtrending channel. The chip stocks have gotten hit pretty hard. AMD, Micron, still in this long downtrending channel as well. If you want to draw the lines to help you visualize more, like I said, you connect some of the tops here, and then you connect some of the bottoms. It doesn't have to be exact. It just gives you a better visual of where the price action is, where it could bounce from top to bottom. This is Micron. MU is the symbol. Look at Nvidia. Same thing with Nvidia. Just been in this downtrend. It's been tough. The chip stocks have been getting hit pretty hard. Intel, although had good earnings the other day, may have had some good movement from the bottom, but Intel's just been in this long downtrend forever. I'm more of a fan of AMD than Intel at this point, but all the chip stocks have been getting hurt. I'd like to see a turnaround come soon. Apple, we looked at. Let's talk about Netflix. Netflix, another company that we just jumped into as well. Netflix had earnings recently. Market liked its earnings. If you were playing Netflix, $250 was the line in the sand that was holding it back for so long. You can see right here. I'm going to draw the resistance line right here. Netflix, the pressure was building to get up through $250. All it took was some good earnings and now it popped it up to just about $300 a share. It's trading $295 and change. That was a nice $45 to $50 pop right here after earnings. That's a big move. Netflix still has a long way to go to recapture some of its prior highs here, but I think it's on its way. It has gotten above the 200-day moving average, which is a good sign. We took a position on Netflix this week because I think there's going to be more upside from this point forward. I like the way Netflix looks here. There's a couple other stocks. We look at Coca-Cola and Pepsi we'll look at. Coca-Cola, a stalwart as well over time. You can't go wrong with Coca-Cola. We know Warren Buffett, big fan of Coca-Cola. I'm not saying that's the reason why it's gone up, but if Warren Buffett is a big investor, then maybe we should think about it as well. It's a slow mover. It's a slow grind hire, great dividend-paying company. When a company like Coca-Cola drops that dramatically, you have to really pay attention to the opportunities to buy. It got very oversold on the RSI. Buying down here was a good thing to do, and it's now trading $60.76. It's rallied almost $7 a share. That's a big move. Rallied back, that's good. I like Coca-Cola. I have some my long-term holds. Pepsi, same thing, another great dividend-paying company. Look at it just bottom left to top right. It's just moving higher, higher, higher, higher. Yes, it has the pullbacks, but the pullbacks makes for buying opportunities. I think this is an all-time high here. Let's take a look at the monthly chart. Yep. An all-time new high, how about that? In the face of the worst year for stocks in a long time, all-year-long stocks have been going down, but yet Pepsi making a new high, just the grind hire. Another great company. Two other stocks we talk about, utility companies. Con Edison, consolidated as Edison. Here's the stock ED. Utility companies are slow movers as well, but when utility companies get hit as hard as they do like that, you have to take notice. You have to take notice. God Oversold made a double bottom on the RSI and has had this nice move up since then. From $77, $78, all the way up to $88. Big move. We look at Southern Company, another utility company. We actually got into a play on Southern yesterday as well. Sold some put options on it. Big move down. Oversold on the RSI. You can see back here when it got oversold, it bounced as well. The RSI can be used as an indicator saying things are really getting oversold. Just keep a watch out because a bounce could be coming pretty soon. Oversold here, pretty much nailed the bottom right here, and then it started to go up. These are things you can look for using your technical analysis. I keep it pretty simple. There's so many technical indicators you can use out there. Some people think the more indicators you have on the chart, the better you'll be at reading charts. I disagree with that because if you have too many indicators, you're not going to be able to see the chart. Some of them will be offsetting each other. Some will say you should get long. Some will say you should get short. There's too many things. I keep it simple. Three moving averages and just using support resistance chart patterns and the RSI. What else do we have? McDonald's. Just killing it of late. Had earnings come out this week, McDonald's. Here, RSI once again hitting oversold levels around 230. Now it's trading to almost 275. Just look at that power move higher. It may be getting a little overbought here when you have a vertical move like that. When I say vertical, the stock just goes straight up. Gravity will take over at some point. I do see a pullback probably coming from McDonald's. It's getting a little overbought here. Just a great move. Great company. Great earnings. McDonald's doing well. Let's see what else we have. Kellogg's and General Mills. The cereal companies doing well. Kellogg's. They have earnings coming out next week, I think, but still the price action. Bottom left to top right. Been moving higher. Let's check the monthly. Kellogg's all-time high was back in 2016, but still looking pretty good. General Mills, same thing. Doing well. All-time high for General Mills. Symbol is GIS. Here's how it looks on the daily chart. Just look at this great movement. Looking at stock charts can help you gauge if a stock's ready to bounce, which way it's trending. If you're just looking at fundamental data, the sales, earnings, PE ratios, whatever, you're just looking at numbers on a piece of paper. You're not seeing how that converts to what the charts look like. So if you want to use fundamental data, I have no problem with that. You want to look at the charts as well to see which way the stock price is moving. Verizon's still a favorite of mine in the cell phone industry. Just have not been able to pull the trigger yet. Here's a bottom rally this week as well. Not sure if I'm ready to jump in yet. Let's see what else we have. PayPal, still hanging around the lows. Square, the other payment company hanging around the lows. Nothing there yet. Costco, always a strong stock. Very expensive though. Let me see what else I could find. We look at Warren Buffett. So here's the Warren Buffett's Berkshire class of what Berkshire Hathaway class B shares trading around just under $300 a year. Had a nice move. We had drawn this line in the past as area of support and of course it bounced right off of that. So you look for areas of support and resistance bounced here. You got one, two, three, triple bottom. It did come down a little bit below it right here and here. But look at the nice bounce. Going back to our website under our services tab. I do have a report that I wrote about Warren Buffett using a different options trading strategy. The secret to buying Warren Buffett for pennies on the dollar. Another options trading strategy that I love. If you want, you can take a look at that. But, you know, following Warren Buffett is not a bad thing. You can piggyback off what he does by some of his class B shares if you're bullish on him and or look at that report that I wrote. We looked at Twitter. We looked at Meta. IBM, big blue doing pretty well too. Look at that nice move higher. What other stocks here? Clorox doing okay. Colgate coming off the bottoms as well. Johnson and Johnson. So the medical stocks, pharma stocks, we got J&J, Pfizer. I love the pharmacy, pharmaceutical, healthcare industry stocks. Merck. They're all doing well. Look at Merck. I think this is an all-time high for Merck. Let's look at the monthly all-time new high for Merck. So, you know, pick your stocks, pick your companies, watch the charts, and you will be rewarded. You know, chart reading is just another way to help you decide when it's time to get in and out of trades. All right, so that's about it. Looking pretty good here. You know, we've had to endure this bear market since January 1st. I'm pretty hopeful here that this October 13th move was the bottom. Yeah, we can have more pullbacks. I don't know if we're going to pull all the way back down to the bottom here. But, you know, people are naysayers out there. Interest rates. The Federal Reserve has their meeting next week, the last one of the year. They're probably going to raise interest rates 75 basis points again. But after that, I think they may start holding off. We have to wait to hear for the language, whether they say they're not going to be as aggressive anymore. If they're not going to be aggressive, then the market should go up. If they say we're still going to be really aggressive, the next few meetings, then the market may pull back. But for now, you know, companies are pivoting. They're learning how to deal with these new environments, and they're still putting up profitable companies. So I'm optimistic, as always, for the long run. You have to endure the pullbacks from time to time, but you have to see them as opportunities to get into stocks that you like. I've been buying on the way down. Just that's the way you do it. You know, for my own retirement funds, you know, nibbling on the way down. Not going all in, but nibble, nibble, nibble a little bit here and there as the stocks go down, and then eventually they turn around and go higher. All right, that's all for today. I hope this video has been helpful. Chart reading is what we do. Please give me a thumbs up in this YouTube channel. Subscribe to my channel here. Hit that red Subscribe button in the bottom right-hand corner of the video. Leave me a comment. Send me an email. I always answer. I try to help you out. And this is why I make these free videos. All right, so that's all for me today. I hope everyone has a great weekend and a great trading week ahead. This is Lee Lowell, signing off.