18 Mar Weekly Market Map Forecasts and Trade Ideas Report
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Weekly Market Forecast Maps and Swing Trading Ideas Report: Mar 17th
- Market Analysis – rip rally off previous week’s low to close at new interim high
- SRP Model Portfolio YTD performance – 26 winners, 5 losers, up 17% YTD! (Avg Win = 14%)
- 2019 remains the year of the micro cap and we’ve closed out 2 big winners for +150% and +100% in just 2 months Check into Tippingpointstocks.com! Read our recent blog entry here (click to read)
Key Items for this week:
- Divergences Forming
- Deteriorating Breadth
- What are the next targets for the SP 500?
For the week ending March 15th, the market shrugged off last week’s selloff by ramping up to new closing highs. However, there were a few warning signs among the SP 500 rally this week – particularly lack of similar participation in the Russell as well as Transportation and Homebuilder indexes. In addition, price worked off some of the oversold conditions from last week.
This past week was one of four (4) Quad Witching expirations per year, where index futures, index options, stock options and stock futures expire. Despite the rally in the SP 500 this week, there were divergences the continued to form as newer highs have been made.
In addition, we are in the always unpredictable Mercury Retrograde window that started Mar 5 and ends on Mar 28th, so we continue to be on guard even as this market continues to extend upwards. The natural buyers during the surge from the December bottom have been shorts, but when the short covering begins to fade, where will the “real” buyers show up? This does appear to be a 5th wave up from the 2346 SP 500 lows of December, and 5th waves are tough to predict.
The Fed has been quiet as of late, to be expected, however all eyes will be on their movements (or lack thereof) during their March FOMC sessions this upcoming week.
| Week ending 3/15: | |
| SP 500 | +2.9% |
| Russell 2000 | +2.1% |
| Nasdaq 100 | +4.2% |
| Dow Jones 30 | +1.6% |
Divergences Forming
While the SP 500 and Nasdaq are making new relative highs, there are some notable divergences forming among the indices, particularly with the Russell as well as some sectors such as transports and homebuilders. Also, SP 500 and Equal Weight SP 500 are not following one another, causing a divergence. Divergences can go on for some time, but they should serve as a warning to the current trend.
We continue to find swing trade ideas and it does remain a stock pickers market.
Divergent charts:
Deteriorating Breadth
With this week’s new highs, momentum in the Summation Indexes has approached zero, but overall the NYMO still remains negative. In other words, the McClellan Oscillator readings are weakening despite price advancing higher this week. In addition, during this week’s rally, there has been lower volume and net advancing stocks from Monday to Friday. This is important to note!!
Market Internals chart:
What are the next targets for the SP 500?
5 wave advance is overall bullish for the potential long term Bull Cycle from the Dec 24th 2018 lows.
Last week’s double top may have been a week early, and in fact the SP 500 is showing signs of a blowoff 5th wave extension with targets 2840 to 2875. First clue will be a close below the 10 dma, as mentioned in last Friday’s Morning Report. We’re looking for at minimum a retrace of about 25% of the entire rally off the 2346 lows on 12/24 once this bull leg concludes possibly this week. After we get our first confirmed breakdown on a closing basis, then we’ll update targets from there.
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 24 of 29 swing trades for the year 2019 for avg gains of 13%. That’s an 83% 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 just hit fantastic swing gains on HYRE with a 14% profit on the front half and 36% on the final 1/2!
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 5% YTD with less risk!
Now for some charts…
SP 500 Charts: Blow off 5th wave likely. Negative divergences forming. Targets 2840 / 2875
Biotech (XBI) Chart: Inside week last week, resolution should be to the upside as long as lower channel holds.
Bottom Line:
- Market made new weekly high close this year, showing signs of 5th wave extension blow off top.
- Unlikely that new buying volume can push price higher than 2875-2900 on this run.
- Bigger term retrace levels are in the 2625-50 region, which ideally would give us a launchpad to attack new all time highs this year. 2630 is the midpoint of 2019’s High-Low range.
- We are becoming more confident in the new BULL CYCLE pattern, due to seasonality and breadth, among many other things, and need to see price action strongly break down below 2500 before we reconsider our Alternate ABC Bear Cycle Lows
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 +100%, SOLO up +300% this year already and our most recent report last week is already up 14% in 4 days.
2) SP 500 trading up and down movements (ESAlerts.com or Stocktwits Futures Room)
3) Swing Trading stocks and ETFs (Stock Reversals Premium)
E-mail Dave if you have 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 16 names this week.
PYX – ACB got going last week, could PYX be next? Breaking up out of 3 week consolidation. Company engages in the provision of various agricultural products, ingredients, and services to businesses and customers.
OCX – earnings gap touch and break up out of a 5 week base last week. Above 4.12 sets up a run to 5.00 range. Company focuses on the development and commercialization of novel and non-invasive blood and urine (liquid biopsy) diagnostic tests for the early detection of cancer.
AMRN – may need some more time to consolidate, but we want to get it on the watch list now. Took 4 weeks to consolidate in January before a 50% move upwards. Now currently 2 weeks consolidation. Company engages in the development and commercialization of therapeutics for the treatment of cardiovascular diseases.
STNE – consolidation just under ATHs, watch for extensions. Company provides financial technology solutions that empower merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels.
IVC – 4 week base and cup and handle just under gap. If it can get into the gap, upside is all the way to 12.50s possible. Company designs, manufactures, distributes, and exports medical equipment for use in home health care, retail, and extended care markets.
TTC – nice high flag post earnings gap forming here. Company designs, manufactures, and markets professional and residential equipment worldwide.
TME – we’ve mentioned this a few times. 2 week consolidation back to 20sma. Looks good for higher. Company operates an online music entertainment platform that provides online music and music-centric social entertainment services in China.
GSKY – Up 4% last week. High weekly consolidation, holding upper half of previous week’s candle = bullish. Also flagging on the daily. Upside targets 14.50 region around the gap fill. Company provides point-of-sale financing and payment solutions to merchants, consumers, and banks.
CGC – 8 week flag consolidation holding 13wma and centered on the weekly point of control. We like the low volume pullbacks. Company engages in growing, possession, and sale of medical cannabis in Canada.
PI – Up 10% last week, looking for extension into 21 area for now. We like the base and setup. 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.
TLRA – Up 18% last week with nice volume. Let’s see if we can get continuation into the 6s. Follow the 13ema. Company operates a programmatic, self-service, seller platform to monetize and manage premium video content across various Internet-connected screens and devices.
MTC – volume building in a post IPO base, which is our bread and butter pattern. Somewhat thinly traded but could be good for a quick pop. Company develops and deploys platforms that enable financial institutions to engage in securities market transactions and settlements.
KHC – basing as though forming a temporary bottom. Higher volume last week, could be a nice swing back to the gap around 36 which is about +12% higher from here. Company manufactures and markets food and beverage products.
LTHM – post IPO base and any dip below 12 is getting quickly bought up. Have nothing bearish to say about this name as long as the weekly tails keep forming. Could be bottoming here over coming weeks and start heading higher. Company manufactures and sells performance lithium compounds for energy storage, specialty polymer, and chemical synthesis applications.
AQMS – high of 4.29 last week (up +25% from our first mention last Sunday), and we think a close above 3.93 could really get going (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.
TBLT – higher low this week and like the company fundamentally. Considering the washout low of 1.33, basically filling gap from first post IPO breakout, there is tremendous value here. 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.