The miserable market action continued Tuesday morning, as oil reached its highest levels this year, housing starts were lower than expected, bond yields continued to rise, Canada’s consumer price index came in higher than expected, and concerns grew about the strength of the Canadian economy. Economy.

Technically, the S&P 500 is at its lowest level since August 28, and all other indices are trading below their major moving averages. The Russell 2000 Fund (IWM) continues its unfortunate movements as it reaches levels last seen on July 6th. Small cap stocks have been lagging for a long time, which is reflected in the very weak range widening. The negative range is moving around three to five, but I’m watching to see if the number of new 12-month lows continues to expand. Currently, they are at 250 people, but they reached 350 on Monday.

The selling is accelerating as I write this column and I see few good opportunities, except for the bottom fish stocks I describe below. Nasdaq 100 breadth is now negative four to one and all major big tech names are in negative territory.

My plan in this market is to have a clear watchlist of 25-30 stocks and track them closely as they react to bad market conditions. Many stocks should rebound nicely when the market improves and fundamentals become important, but just because they appear mispriced in this poor market, doesn’t mean it’s a good time to buy them.

The key to bottom hunting stocks in a bad market is to avoid the tendency to try to pinpoint the exact time of a decline. When you focus on that, you’re more likely to start buying early and quickly. A better approach is to wait for some clear support and then look for a bounce. This support will be the obvious stop level and prevent you from riding the momentum in the wrong direction.

There is a strong temptation to buy the teeth of a decline in the hope of a quick bounce. This can work when the selling is intense enough, but it’s not easy to do consistently.

One stock I consider a bottom fish is AST SpaceMobile (ASTS). The stock has been scraping the bottom of the barrel for two months and rose today on news that it made a 5G connection between a satellite and an unmodified smartphone. This stock has been a huge disappointment to loyal retail investors, but it may finally have a chance to bounce back a bit now that it’s getting a technical boost and some news.

(Please note that due to factors including lower market capitalization and/or insufficient public float, we consider ASTS to be small-cap stocks. You should be aware that these stocks are exposed to greater risks than stocks of larger companies, including greater volatility, lower liquidity and lack of information publicly available, and that publications such as this could have an impact on their stock prices.)

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