Stock Market Rally Pushes Higher For Second Day

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Simpler Trading Team

Oct 18th 2022  .  3 min read

The trouble for traders in this stock market is price action that could go either way at any time – a trend lower or higher just won’t settle into a more defined pattern.

This forces traders to constantly adapt to market reactions as new information influences the movement in the form of economic data or the ongoing earnings season.

Any number of trading scenarios could break out, and the options for traders are as hot and cold as any point in this volatile trend.

Options with Taylor Horton
Futures with Raghee Horner

Stock market rally pushes higher for second day

The stock market jumped out of the gate today with the pedal to the metal and then abruptly switched to cruise control in a slower speed zone.

All three major indexes were up early, with the Dow showing early strength before retreating heading into midday trading. Across the board the market fought through the choppy session – laced with varying third quarter earnings season reports – and closed higher for the second day in a row.

In the market today, the Dow closed at 30,523.80 points to rise another 1.12% (adding 337.98 points on the day). The Nasdaq rose to 10,772.40 points for a .90% gain while the S&P 500 jumped 1.14% to 3,719.98 points.

Apple, Inc. (AAPL), considered a bellwether stock by Simpler’s traders, took an early hit on news it would slow production of its latest smartphone release. AAPL regained its footing and closed at $143.75, up .94%.

Apple stock has experienced rocky price action since the end of September, adding to a steady decline since mid-August. Apple is down from $182.01 since Jan. 1 after growing over the previous two years, rising from a pandemic low of $57.21 in March 2020.

Apple has extensive overseas operations and is seen as susceptible to the ongoing 40-year high inflation in the United States, a common concern among U.S.-based international companies.

Simpler’s traders follow Apple as a possible signal of an overall market shift. Apple is a technology leader and influential stock across all three major indexes.

One earnings report could impact entire market

Earnings season and the influence of corporate reports is the focus for Simpler’s traders this week.

Just one earnings report could send the stock market reeling or racing even higher, according to Chandler Horton, Director of Day Trading Strategies at Simpler Trading.

Traders will have to wade through this journey of seeing how the market reacts to earnings reports, and the stock market could be filled with a wild range of price action, according to Chandler.

“Big money (Wall Street) always likes to hear what these companies are doing,” Chandler said.

A technical analysis trader, Chandler will be watching E-mini S&P 500 (ES) price structure in the market to indicate moves up or down.

He will particularly be watching any movement toward the prior low of the year at $3,571 in June and the new low of the year at $3,502 set last week.

Any downside movement below these levels and the market could slip further toward pre-pandemic highs at $3,397. 

“Last week definitely shook the board,” Chandler said. “We want to be patient, smart and be open-minded. Understand how to flow in these ranges and take advantage of levels.”

As this market continues to gap and rally, Simpler’s traders are following the action day by day.

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