Keith Harwood,

With a new year, we have the potential for major changes in the stock market’s price action.  Rebalancing portfolios and a full year to prove performance for money managers mean we could see major shifts in certain sectors and the market on the whole.  To start, I like looking at the general inputs that have been impacting technology, as it had a very bad 2022.

The first main indicator that I’m looking at is bonds.  Let’s take a look at TLT, which is an ETF that represents US Treasury Bonds:

Get Keith's Market Maker Cheat Sheet here for free!

Bonds started the year on a positive note.  With a bearish tone to bonds at the end of 2022, the stock market continued to be dragged down.  This bounce back in bonds could be a sign that interest rates and bond yields simply can’t go any higher for now.  That could be a positive for the stock market as people may prefer to bet on a stock market recovery rather than take the “safe bet” with a bond-heavy portfolio that may end up with stable or lower yield.  Time will tell on this, but it leads me to believe that tech may have a chance to bounce back at the beginning of 2023.

To see if the market agrees initially, let’s look at the chart of QQQ, the NASDAQ 100 ETF:

QQQ continues to show weakness and is testing prior lows.  But much of this is actually being driven by mega-cap companies like Apple.  QQQ is holding up because people are still buying many tech names.  Apple represents almost 12% of QQQ, so as it falls, it makes it hard for QQQ to rally.  If other mega-cap names like Microsoft (nearly 13% of QQQ) start to fall more aggressively, as well, then 25% of QQQ is bearish even with just those 2 names out of 100 falling.  There are plenty of bullish names in QQQ, but the performance of Apple makes that hard to see when looking at the ETF.  That’s why I created the Outlier Watch List, so I could help others identify many of the names that are bullish even when QQQ doesn’t look like it.

Just to see how big of an impact it’s having, let’s look at a chart of AAPL:

And to illustrate just one name on my watch list that is bucking the bearish tone of QQQ, let’s take a look at Kraft Heinz (KHC), which made a new high last week and is only 0.46% of QQQ’s weighting:

With a market that is testing lows, I like looking for those stocks that are going against the trend that seems to be driven by a few very large companies.  And expressing that view with call options both defines my risk and helps me get leverage!  As mentioned, there are many more interesting names in this market for playing the potential rebound that I discuss weekly in my Outlier Watch List!

So please go to to review how I traditionally apply technical signals, volatility analysis, and probability analysis to my options trades.  As always, if you have any questions, never hesitate to reach out.

Keith Harwood

[email protected]

See Related Articles on

What Setups to Watch For As Traders Dial In 2023

Exploiting QQQs Continued Slide

Chart of the Day: Target (TGT)

Meet the 2023 Dogs of the Dow

Debit Spreads

TradeWins Logo
© 2022 Tradewins Publishing. All rights reserved. | Privacy Policy | Terms and Conditions | Contact Us

Auto-trading, or any broker or advisor-directed type of trading, is not supported or endorsed by TradeWins. For additional information on auto-trading, you may visit the SEC’s website: All About Auto-Trading,
TradeWins does not recommend or refer subscribers to broker-dealers. You should perform your own due diligence with respect to satisfactory broker-dealers and whether to open a brokerage account. You should always consult with your own professional advisers regarding equities and options on equities trading.

1. The information provided by the newsletters, trading, training and educational products related to various markets (collectively referred to as the “Services”) is not customized or personalized to any particular risk profile or tolerance. Nor is the information published by TradeWins Publishing (“TradeWins”) a customized or personalized recommendation to buy, sell, hold, or invest in particular financial products. The Services are intended to supplement your own research and analysis.

2. TradeWins’ Services are not a solicitation or offer to buy or sell any financial products, and the Services are not intended to provide money management advice or services.

3. Past performance is not necessarily indicative of future results. Trading and investing involve substantial risk. Trading on margin carries a high level of risk, and may not be suitable for all investors. Other than the refund policy detailed elsewhere, TradeWins does not make any guarantee or other promise as to any results that may be obtained from using the Services. No person subscribing for the Services (“Subscriber”) should make any investment decision without first consulting his or her own personal financial adviser, broker or consultant. TradeWins disclaims any and all liability in the event anything contained in the Services proves to be inaccurate, incomplete or unreliable, or results in any investment or other loss by a Subscriber.

4. You should trade or invest only “risk capital” money you can afford to lose. Trading stocks and stock options involves high risk and you can lose the entire principal amount invested or more.

5. All investments carry risk and all trading decisions made by a person remain the responsibility of that person. There is no guarantee that systems, indicators, or trading signals will result in profits or that they will not produce losses. Subscribers should fully understand all risks associated with any kind of trading or investing before engaging in such activities.

6. Some profit examples are based on hypothetical or simulated trading. This means the trades are not actual trades and instead are hypothetical trades based on real market prices at the time the recommendation is disseminated. No actual money is invested, nor are any trades executed. Hypothetical or simulated performance is not necessarily indicative of future results. Hypothetical performance results have many inherent limitations, some of which are described below. Also, the hypothetical results do not include the costs of subscriptions, commissions, or other fees. Because the trades underlying these examples have not actually been executed, the results may understate or overstate the impact of certain market factors, such as lack of liquidity. Simulated trading services in general are also designed with the benefit of hindsight, which may not be relevant to actual trading. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. TradeWins makes no representations or warranties that any account will or is likely to achieve profits similar to those shown.

7. No representation is being made that you will achieve profits or the same results as any person providing testimonial. No representation is being made that any person providing a testimonial is likely to continue to experience profitable trading after the date on which the testimonial was provided, and in fact the person providing the testimonial may have experienced losses.

8. The author experiences are not typical. The author is an experienced investor and your results will vary depending on risk tolerance, amount of risk capital utilized, size of trading position and other factors. Certain Subscribers may modify the author methods, or modify or ignore the rules or risk parameters, and any such actions are taken entirely at the Subscriber’s own election and for the Subscriber’s own risk.