MARKET UPDATE #164

Free weekly stock market education service with 3 stock ideas.
Disclaimer: The content is for educational purpose only. No investment advice. Please read the full disclaimer.
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Hi ,

last week the volatility came back into the stock market. The market went sideways instead correcting. That's good but it the intraday volatility was very high. If the intraday volatility is high, you often see stocks breaking out and coming back quickly. A very dangerous and difficult market for breakout trader.

On the other side we have a few sectors which took over leadership and rallied higher. Especially energy, metals and finance. A few other sectors will maybe join next week. That's a good sign, because can now see clearly where money is flowing into.

🚨 Big news: I will start a premium membership service on January 24th. So many people asked me about it and I decided to give that a try. More information about it in the next newsletter.

Here is what you will find in this newsletter:
  • Questions and answers from the subscribers forum
  • Comment on the current market situation: Adjust your market analysis on a daily base
  • Stocks I am watching at the moment: $TSM, $FCX, $ZIM
  • Trading tips: Your watchlist is the most important market indicator
If you have questions, please use the subscribers forum.

Thank you and good trading,
Julian

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Join now all the other people who already bought the course. The last survey showed me that 99% of all students would recommend the course to a friend.

➡️ Here is the special discount code: newsletter10
➡️ Click here and use your 10% discount for my video course!

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QUESTION AND ANSWERS

No new question or answer this week. You have to register for the forum! If you have an account, you have to login.

Do you have a question for me? Use the free forum. Links are below!

Visit the forum
Register for free
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MARKET CONDITIONS

Adjust your market analysis on a daily base

In volatile times you have to adjust your market analysis on a daily base. Volatility means that the market it looking for a new direction and bulls and bears are fighting about it.

Sometimes the information I present in the free newsletter is old one day after I wrote it. So update your scenarios and analysis every day and act on it.

As I wrote in the introduction: I see clear leadership in value and cyclical sectors like energy, metals, finance. That's where I have my focus for the next weeks. Yes, these stocks are not the high growth names I usually trade. But as I often say: Accept what the market is giving you, trade smaller if you have not a high conviction in the names but let the market guide you. It's ok to be in cash and wait for the high growth names to come back or you trade some energy, metal or finance names.

Is the correction off the table? No! Growth stocks stay weak and the correction can continue. Market sometimes decouple and move in different directions. Go back and study the past where the Russell 2000, S&P 500 and NASDAQ were not in synch. That will help you to understand the current situation in the market.

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ndx-15

NASDAQ Composite: The first bounce from the EMA 200 was solid. Now the market has to find a short term bottom. But be careful: Another retest or even another lower low is possible. Even a rally to the 15,500 level is a possibility. Prediction is useless in volatile times. You have to adapt your analysis every day.

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3 LEADING STOCKS

This week I have 28 stocks on my watchlist, 14 more (!) as last week. My watchlist doubled in one week. That's a good sign even thought I have a lot of value / cyclical stocks on my list.

Would you like to learn how to find stocks like below? Look into my video course Growth Traders Toolbox.

tsm-2

$TSM: I highlighted the stock a few issues ago. At that time the stock was a clear laggard and not buyable. Today the situation changed totally. The stock broke out to a new all-time high.

The company is the largest semiconductor producer in the word and produces semiconductor for all important companies: AMD, NVIDIA, Apple …

Sales growth in the last 3 quarters: 26%, 21%, 23%. EPS growth in the last 3 quarters: 18%, 17%, -18%. EPS estimated for 2022 and 2023: 31% and 16%.

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fcx

$FCX: I am not a huge fan of the consolidation of this stock. Too many red bars, no clear accumulation. But it's still a leading metal stock and one of the few copper producer stocks you can trade.

If copper breaks out and move higher, $FCX will follow. The Canadian sister stock already made a new high and the whole sector is on the move.

Sales growth in the last 3 quarters: 73%, 88%, 58%. EPS growth in the last 3 quarters: 419%, >999%, 207%. EPS estimated for 2021 and 2022: 469% and 16%.

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zim-2

$ZIM: Shipping stocks are on the move and benefit from the shortage of transport capacity. $ZIM is a young shipping stock and one of the leaders in that industry.

Sales growth in the last 3 quarters: 112%, 200%, 210%. EPS growth in the last 3 quarters: >999%, >999%, 794%. EPS estimated for 2021 and 2022: 662% and -36% (!).

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TRADING TIPS

Your watchlist is the most important market indicator

I repeat is over and over again, in my course and here: Observe your niche! The screeners and watchlist are the most important market indicators.

When you are a consistent trader with a consistent process, it's easy to know when to be out of the market and when it's time to come back. The number and quality of stock setups on your watchlist tells you everything. When there is a low quality and almost nothing to trade, be careful. When the number of candidates increases, come back and wait for a good entry.

Too many traders have no process and no consistent criteria. They trade everything and the result is often bad. Trade setups must be repeatable. Otherwise you don't have a consistent edge. I don't copy trades from other traders and I don't take any setups or stock which is discussed on social media or elsewhere. Instead I use my screeners and my own process.

When I see an interesting stock in my social media feed or that is highlighted by another trader, I do the same check I do for all stocks. It has to fulfill the same criteria, otherwise I would not trade it.

Are you consistent? Do you have a clear stock screening process? Are you taking spontaneous trades? Think about that. I even can take setups when the market is in a bad shape but my watchlist gives me a different picture. My own process is more important for me than anything else.

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