Trading Lesson of the Week

• October 4, 2026
• T.SGY | BBNX

In This Week’s Issue:

• Upcoming Events – Free Classes to Make You a Better Stock Trader
• Market Outlook – Seasonal Turn
• This Week’s Market Minutes video – Will October Bring a Stock Market Crash?
• Trader Training – How to Buy Strong Stocks On Sale
• Strategy – Pullbacks to the Upward Trend

Upcoming Events – Free Classes to Make You a Better Stock Trader

Coming up later in October, a 4 part series to teach you how to analyze any stock in seconds, identify quality trading and investing opportunities and utilize the powerful tools of Stockscores. These classes are free to attend and all attendees will receive an electronic copy of my sold out book, “The Mindless Investor”

CLICK HERE TO REGISTER ON STOCKSCORES.COM

My Simple Approach to Pick Winning Stock Trades

Tuesday, October 27, 2026 6pm PT, 9pm

Find the Best Stocks, Manage Risk, and Build Wealth

Wednesday, October 28, 2026 6pm PT, 9pm ET

Winning Day and Swing Trading Strategies for Consistent Income

Thursday, October 29, 2026 6pm PT, 9pm

How the Stockscores Tools and Education Can Help You Make Stock Market Profits

FreeOnline Saturday, October 31, 2026 9am PT

Market Outlook – Seasonal Turn

Stocks tend to do poorly in September and then turn higher in October for the strong season for stocks into May. I am seeing early signs that this turn is building as the Russell 2000 index is testing the downward trend line that has been in place since mid-August. October is the fourth strongest month, on average, over the past 25 years.

This Week’s Market Minutes Video – Will October Bring a Stock Market Crash?

October is notorious for stock market crashes, but is it warranted? I discuss the statistics for the month and whether investors need to be concerned about market weakness this month. Then, I provide my analysis of the overall markets and the trade of the week on SDEV.

CLICK HERE TO WATCH ON YOUTUBE

https://youtu.be/Pg8RHj0xK74

Commentary – How to Buy Strong Stocks on Sale

One of the simplest ways to make money in the stock market is to buy weakness in strong stocks.

It sounds contradictory. If a stock is strong, why wait for weakness? The answer lies in understanding how fear and greed move stock prices.

Stocks that are performing well tend to attract investors because something positive is happening. Perhaps the company is delivering strong earnings growth, introducing an exciting new product, benefiting from an industry trend or simply exceeding investor expectations. Whatever the reason, buyers are willing to pay increasingly higher prices for the stock.

That creates an upward trend.

At Stockscores, these stocks will typically have a Sentiment Stockscore of 60 or higher, indicating that investors are generally optimistic and the market is rewarding the stock with positive price momentum.

However, even the strongest stocks do not move straight up.

After a period of strong gains, some investors begin to worry that the stock has gone too far too quickly. Others simply want to lock in their profits. That selling creates a pullback.

This is where fear temporarily interrupts greed.

Importantly, a pullback does not necessarily mean that the upward trend is over. If the fundamentals remain healthy and investors are still generally optimistic about the company's future, the decline can simply represent normal profit taking within a strong upward trend.

That creates the opportunity.

The strategy is straightforward:

First, find a stock in a strong upward trend. Ideally, the stock should have a Sentiment Stockscore of at least 60, showing that investors continue to favor the company.

Second, wait for the stock to pull back toward its rising trend line. Rather than chasing the stock after it has already made a strong move higher, patience allows the trader to buy closer to an area where buyers have previously been willing to step in.

Third, wait for the pullback to break. The goal is not to simply buy because the stock has fallen. A stock can always fall further. Instead, wait for evidence that the short-term selling pressure has ended and buyers are taking control again.

When the declining pullback breaks to the upside, it signals that the dominant upward trend may be ready to resume.

This approach combines momentum with timing.

Momentum tells us what stocks we want to own. The pullback provides a better opportunity to buy them.

The psychology behind the strategy is remarkably simple. Greed drives investors to chase strong stocks higher. Eventually fear causes some of those investors to take profits, producing a temporary decline. When the selling runs its course, investors who remain optimistic step back in and the upward trend can resume.

Rather than chasing greed, the disciplined trader waits for fear to create an opportunity.

There is another important advantage to buying pullbacks: risk management.

Buying near an upward trend line typically allows the trader to place a stop below a logical area of support. If the stock fails to resume its upward trend and instead breaks support, the trade can be exited with a relatively small loss.

This is an important distinction between trading strong stocks and simply buying stocks that have fallen.

The objective is not to buy something because it is cheaper. The objective is to buy temporary weakness within demonstrated strength.

Find stocks that investors already want to own. Wait for normal profit taking to create a pullback. Then buy when the market provides evidence that the buyers are taking control again.

Strong stock. Healthy upward trend. Pullback to support. Break of the pullback.

Sometimes the best opportunity to participate in strength comes from patiently waiting for a little weakness.