25 Feb Weekly Market Map Forecasts and Trade Ideas Report
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Weekly Market Forecast Maps and Swing Trading Ideas Report: Feb 24th
- Market Analysis – 9 Consecutive Up weeks for the Dow, pullback or consolidation imminent?
- SRP YTD performance – 21 winners, 2 losers, Model Portfolio up ~20% YTD!
- 2019 is the year of the micro cap? We think so, check into Tippingpointstocks.com!
Key Items for this week:
- How long can this rally last?
- Are the internals supporting this new Bull Market alternative scenario?
- What are the next targets for the SP 500?
For the week ending Feb 22nd, the major indices continued their relentless rally off the 12/24 bottom, with the Dow posting a 9th consecutive positive week, the longest win streak since 1995! At the end of the day, a rocket shot straight up runs out of gas, and we are just waiting for the inevitable decline to reset some of the technical’s. The fact that most indices could barely make new highs despite positive news out of China tariff talks tells us that we may be nearing a short term top imminently.
| Week ending 2/22: | |
| SP 500 | +0.6% |
| Russell 2000 | +1.3% |
| Nasdaq 100 | +0.5% |
| Dow Jones 30 | +0.6% |
How long can this rally last?
Ultimately, history shows that markets can only have a sustainable level of buying before exhaustion sets in. There have only been a handful of times in history for the Dow, for instance when there have been more consecutive win streaks than it currently has. The chart below is courtesy of Ryan Detrick.
Are the internals supporting this bull alternative scenario?
In short, most definitely seems that way. Two charts below highlight a few points. First, the equal weighted SP 500 index is already making new highs above Nov/Dec levels, which bodes well for the traditional weighted index we all know and follow.
Secondly, the Summation Index has had one of the more powerful breadth thrusts we have seen since the 2009 low!!
Now, even back then when the summations exceeded +1000 (and more specifically >1200, as we see now), there was a pause in price that happened shortly thereafter.
From an Elliot Wave perspective, we have enough to support a completed 5th or larger 3rd wave move off the Dec lows, which would imply an impulsive start following an IRREGULAR ABC correction from January to Dec 2018. We should see a corrective ABC or 5 wave triangle pattern pullback next and from there, we will be able to use our market maps to dial in the next phase of this pattern. Before we get ahead of ourselves, let’s see how the next pullback looks.
What are the next targets for the SP 500?
We really need to see where the market tops, and the first signal will be a close below the 13 EMA (Daily Exponential Moving Average), which has been support since early January.
As of right now, if we have completed a top or close, then we would expect an initial pullback to target anywhere from 2640 to 2608 on the high end as likely. We could see one more push to 2815 area before a “sell the news” type of event.
Loosely topping at 2815 area or lower, and pulling back to 2700 or lower is likely…
Playing the SRP Playbook: Avoid cherry picking…
We are confident there will be plenty of trade setups for SRP members, so keep sticking with us. Hopefully our track record so far this year is showing our methods do work over time. There will be quarters that are more difficult than others each year, but after a full 12 month cycle historically we have hit about 70% of our trades for profits. The key is to continue play the full playbook for best results. Cherry picking our trades or second guessing will lead to likely below par results as a member over various cycles.
Thanks to our Market Maps (a.k.a. Elliott Wave pattern analysis), we have continued to look for trade setups, closing 20 of 22 swing trades for the year 2019 for avg gains of 12%. We will have difficulty keeping up this pace, but will again aim for about 70% accuracy during 2019 all in.
We continue to find swing trade opportunities, and abide by our 8% sell half rule to lock in gains. We have a number of SRP portfolio names continuing to fill out attractive weekly base patterns, so thank you for continuing to follow our guidance. We will monitor and advise as always on a daily basis.
Our year to date performance is shown below.
SRP Model Performance (YTD): (Click to Enlarge)
The SRP model portfolio has outperformed the SP 500 by 8% YTD!
Now for some charts…
SP 500 Charts: Topping process right now, possible Wave 1 of new Bull leg. Retrace will determine much over coming weeks; targets 2640 / 2608 / 2580
Biotech (XBI) Chart: ending diagonal topping pattern, would look best with pullback to test gap and fill out bullish IHS formation. The 13/34 emas have not crossed positively yet either.
Bottom Line:
- We now need to see price action strongly break down below 2500 before we reconsider our Alternate ABC Bear Cycle Lows, and now Bullish scenario we outlined 3 weeks ago.
- We are becoming more confident in the bullish pattern, due to seasonality and breadth, among many other things.
We also advise SRP Members to consider all of our services so you can attack the market from 3 different angles: 1) Long Term growth stocks 2) SP 500 trading up and down movements and 3) Swing Trading stocks and ETFs.
Continue to stick with us, as we will continue to lean on our Market Maps to guide us through the next cycle leg.
Swing Trade Candidates: Each week we provide 8-15 Swing Trade ideas to consider as part of our SRP service. We often pick a few from the list during the week as actual alerts. We have 16 names this week.
NOTE: SP 500 is up over 19% the past 9 weeks, so quite possible any of these names could consolidate first, but nevertheless we like the patterns, which is why they are listed here. Enjoy!
ETSY – double inside week coiling on the 13wma, looking for new highs. Company is a commerce platform to make, sell, and buy goods online and offline.
BERY – breaking out now, worth a look if you haven’t already, considering nice IHS on weekly. Company manufactures and supplies non-woven, flexible, and rigid products.
AMRN – Up 13% last week, breaking up from a 5 week base pattern. If this gets going, new ATHs could be on the horizon. Company focuses on the development and commercialization of therapeutics for the treatment of cardiovascular diseases.
BE – bullish engulfing week last week, up 12%. Test of 13.50s next? Company designs, manufactures, and sells solid-oxide fuel cell systems.
QTNA – We are looking at a possible multi month upside for this high earnings company. Once above 19.40, likely heading to test ATHs. Company designs, develops, and markets wireless communication solutions enabling wireless local area networking.
TWLO – inside week consolidating at highs = bullish. Company provides a cloud communications platform.
IGT – up another 4% last week, and we think much higher to go as it rallies off this weekly base – 19/20 to start bigger term. Company operates and provides technology products and services across lotteries, electronic gaming machines, sports betting, and interactive gaming markets worldwide.
HCC – keep this on your radar for longer than just next week. Stock forming an almost 12 month base here, which gets our attention. New highs coming eventually. Company produces and exports metallurgical coal for the steel industry.
TBLT – we’ve talked about this on Twitter, as we believe it’s undervalued fundamentally and a post IPO setup and working to fill gap on daily. Company designs, manufactures, and distributes home improvement and construction products for the building industry.
AA – materials getting some look here. Looks like a nice rounded bottom and breaking right side. Company produces and sells bauxite, alumina, and aluminum products.
WDC – massive double bottom around 34 tells us there is much more upside for this name. Could see 52-53 to start, then 60s next. Company develops, manufactures, and sells data storage devices and solutions.
FTNT – Upside still not done, could consolidate next week or 2, but we’re seeing a round cup forming here. Company provides broad, automated, and integrated cybersecurity solutions worldwide.
MEDP – new all time highs last week, should be starting breakout to 80s over coming weeks and months. Company provides scientifically-driven outsourced clinical development services.
AYX – 6 week base near highs, looking good for new highs soon. Company operates a self-service data analytics software platform.
PI – looks like some volume building here, could squeeze to 22-23. Company operates a platform that enables wireless connectivity to everyday items by delivering each item’s unique identity, location, and authenticity to business and consumer applications.
CURLF – Weekly consolidation, looks ready to stairstep higher and test post IPO highs. Company operates as an integrated medical and wellness cannabis operator in the United States.