04 Mar Weekly Market Map Forecasts and Trade Ideas Report
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Weekly Market Forecast Maps and Swing Trading Ideas Report: Mar 4th
- Market Analysis – 26 higher closes since 12/24 bottom without a pullback of 3% or more (rare)
- SRP Model Portfolio YTD performance – 23 winners, 3 losers, up 19% YTD!
- 2019 is the year of the micro cap? We think so, check into Tippingpointstocks.com! Read our recent blog entry here (click to read)
Key Items for this week:
- Seasonal pattern after 9 consecutive Dow Jones up weeks
- Internals comparison from 2009, 2016 and 2018 bottoms
- What are the next targets for the SP 500?
For the week ending March 1st, many of the broad indices put in doji or consolidation candles for the week, with the Nasdaq and SP 500 the only positive performers. We have been more impressed with the strength of the markets off the 12/24 bottom, seemingly defying gravity and cutting through prior resistance like butter.
A typical Bull Cycle is when the market shrugs off bad news and rewards good news at the same time, and thats more or less what we are seeing since the December lows. Usually the market is looking out about 9 months ahead and knows more than we do.
However, we are veteran traders and investors and are smart enough to know when the market is doing its job of sucking in last minute investors, as we believe could be the case now, so a little caution and higher cash balances are not a terrible idea.
That said, on a stock by stock basis you can argue stock picking is back en vogue. Companies reporting strong earnings are seeing pops in their share prices, and those who are not are getting slammed (NTNX).
With catalysts such as the House, Mueller/Cohen’s testimony, China failure, North Korea failure, and other items that are pressuring President Trump, we wonder if the market will notice or climb a wall of worry, so far its been ignoring all of those “issues” and continuing to work higher, again, with a pullback more than overdue.
| Week ending 3/1: | |
| SP 500 | +0.4% |
| Russell 2000 | +0.0% |
| Nasdaq 100 | +0.9% |
| Dow Jones 30 | +0.0% |
Seasonal pattern after 9 consecutive Dow Jones up weeks
A chart and tidbit from Jeff Hirsch regarding performance for Dow Jones following a 9 week win streak. Generally 7-10 trading days are lower, but forward looking is higher. “Average and median performance was negative one month later. By 3 months later DJIA was modestly better…” This complements our call for a corrective consolidation pullback at least to the 200 Day moving average or likely prior level of support around 2725 initially, and ideally back down to 2685 before a move to attack 2850-2900.
Internals comparison from 2009, 2016 and 2018 bottoms
As mentioned last week the Summation Index has had a large breadth thrust than that of even the 2009 washout low. To show a comparison, here are the charts from 2009, 2016 and 2018 bottoms, showing the # of new high closes before a decline of substance.
In 2009, there were 19 new high closes before a -6% decline and another 4 higher closes ushered in a -9% decline.
In 2016, there were 23 new high closes before a -4% decline and another 4 higher closes ushered in a -6% decline.
In 2018/19, there have been 26 new high closes and no decline more than -3% so far, this is characteristic of a new Bull Cycle and not just short covering.
2009:
2016:
2018/19:
What this shows us is the move off the 2018 low has been both one of the strongest, fastest, and longest since 2009 began, but we believe it’s overdue in the short run for a whole host of reasons. This week kicks off first part of March and a lot of economic data and political catalysts on deck this month. In addition, its the start of the next Mercury Retrograde cycle on March 5th, this period tends to be extremely volatile for 3 weeks or so.
What are the next targets for the SP 500?
We were spot on last week when we said “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…”
We nailed the first part, as the SP 500 topped last week Monday at 2813, so now we wait to see if there will be any follow through starting this week. The first indication will be a daily close below the 13 dma, currently at 2774. Then the daily 20sma and 200 dma are just below at 2757 and 2750 respectively. These are good enough targets to wait for before we start looking lower.
Any move higher this week would merely be an extension of this 5th wave off the 12/24 low, and we would expect any move could be quickly sold. Again, we are still stock pickers but that is our SP 500 view for now.
2813 was last week’s top, so watching for close below 13dma (2774) to kick off a possible multi week pullback…
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 23 of 26 swing trades for the year 2019 for avg gains of 13%. That’s an 88% Win Rate so far after 2 months of trading. 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 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 with less risk!
Now for some charts…
SP 500 Charts: Topping process right now, possible Wave 1 of new Bull leg. Waiting for confirmation of corrective decline starting below 13dma; ST targets 2750/ 2720 / 2702
Biotech (XBI) Chart: blow off top last week? Now 2 weekly gaps (not common), so expecting gaps below to be tested on next SP 500 pullback of 3-5% to fill out bullish IHS formation. (The 13/34 emas have not crossed positively yet either) There have been some notable mergers and acquisitions in the space, so the money is still flowing in here in this sector. CLLS may be the next one to get taken out we think.
Bottom Line:
- Market in a possible near term topping process. SP 500 could have topped last Monday at 2813 (a fib we had), but we will see if price can clear that hurdle this week, and more importantly (close above) Friday’s high for more than a few days.
- Bigger term retrace levels are in the 2600-25 worst case, which was a major support area. 2630 is the midpoint of 2019’s High-Low range.
- 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 new BULL CYCLE 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 (Tipping Point Stocks) (HYRE up 70%, SOLO up 300% this year already)
2) SP 500 trading up and down movements (ESALERTS.COM OR STOCKTWITS FUTURES ROOM) and
3) Swing Trading stocks and ETFs (Stock Reversals Premium)
E-mail Dave if any questions on the above at all. (Dave@stockreversalspremium.com)
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 17 names this week.
OSTK – beaten up name, again on our list for 2nd week in a row, but weekly IHS forming and a possible change of character? Company operates as an online retailer in the United States.
STAA – nice rally out of base forthcoming. Targets 45-47 interim term. Company designs, develops, manufactures, markets, and sells implantable lenses for the eye, and delivery systems to deliver the lenses into the eye.
WTER – low risk buy point at the 30-week MA. Multi-month consolidation and increasing volume.
KHC – for those wanting a bounce candidate, this company could have capitulation selling, and a move back to 36 would be well within reason. Company manufactures and markets food and beverage products.
TWLO – closed the week at new highs. Keep riding until it breaks down. Company provides a cloud communications platform.
AQMS – speculative, but we see heavy volume lately and a close above 3.93 could really get going. Thinking 5.00-5.50 if so. Company engages in the recycling of lead. We have covered them in the past on Tipping Point Stocks service.
BERY – still working in our favor, keep riding the breakout, considering nice IHS on weekly. Company manufactures and supplies non-woven, flexible, and rigid products.
HCC – inside week last week, so look to add as long as weekly close above 26.92. Don’t miss the forest for the trees. Stock forming an almost 12 month base here, and new highs coming in 2019. Company produces and exports metallurgical coal for the steel industry..
CGC – Cannabis themed stocks not going away anytime soon, and we like the low volume pullback this past week. Company engages in growing, possession, and sale of medical cannabis in Canada.
TLRY – Stock coiled tight here, inside week. There is a large triangle formation here, so it will break strongly one way or the other. Company engages in the research, cultivation, processing, and distribution of medical cannabis.
TBLT – between 1.25 and 1.50 is gap from first post IPO breakout. We’ve covered this name on Twitter and believe it to be undervalued fundamentally and a post IPO setup. Company designs, manufactures, and distributes home improvement and construction products for the building industry. Chart is a bit of a mess but we think could reverse.
CURLF – Weekly consolidation, looks ready to stair step higher and test post IPO highs. Company operates as an integrated medical and wellness cannabis operator in the United States. Existing SRP position.
IVC – gap up and consolidation. If last week’s low holds, we’re looking as high as 12.50s. Company designs, manufactures, distributes, and exports medical equipment for use in home health care, retail, and extended care markets.
NIO – could get a bump this week on China related news and electric vehicle (EV) spotlight. Monster volume last week on breakout from post IPO base. Company designs, manufactures, and sells electric vehicles. Kind of like our SOLO pick at Tipping Point Stocks.
WHD – inside week on right side base breakout, break below last week’s low is not concerning if it holds 34. Chart looks really good on weekly and monthly. Company designs, manufactures, sells, and rents a range of wellheads and pressure control equipment.
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.
PI – like the base and setup. 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.