11 Feb Weekly Market Map Forecasts and Trade Ideas Report
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Weekly Market Forecast Maps and Swing Trading Ideas Report: Feb 10th
- Market Analysis – Upper end targets hit, now awaiting pullback to determine Bull/Bear
- SRP YTD performance – 18 winners, 1 loser, Model Portfolio up 20% YTD!
- Our SP 500 Market Maps are helping to keep us on the right side of the trade!
SP 500 up just under 400 points after 7 weeks:
- Next pullback crucial to determine Bull/Bear continuation
- What are 2 possible big picture outcomes?
- How much of a pullback and what are the targets?
For the week ending Feb 8th, the major indices traveled round trip from a +2% rally into Wed giving all back by Friday’s close. This qualifies as a “doji” candle on the weekly, which is a mark of indecision. For those keeping score, the SP 500 has capped an impressive 7 week run, with 6 of last 7 weeks positive for total of +393 points gained off the Dec 24th lows.
Week ending 2/8: SP 500 +0.05% Russell 2000 +0.29% Nasdaq 100 +0.55% Dow Jones 30 +0.17%
Next pullback crucial to determine Bull/Bear continuation
Last week’s “Doji” candle along with a backtest of the 200dma from the underside – a huge battle zone from Oct-Dec – gives warning that the market will likely be pulling back to test new areas of support. The market is technically not out of the woods for Bulls until December’s high (2800) or low (2346) has been broken one way or the other. In 2018, it took until July to break above February’s large candle, so this could a bit more time. Until then, we could see a lot of range trading. This should be good for our ES alerts auto trading sp500 service, which you can read more about at the top.
What are 2 possible big picture outcomes?
We are expecting a multi week consolidation and pullback to occur over the next few weeks of February, and from there we will be better be able to determine intermediate next large direction.
Our primary consideration is that this is a Bear Market rally off the lows, and we are keeping an alternate forecast, albeit a lower probability at this time. This is why the structure of the next pullback will be important to us. B waves can take many shapes and sizes, so for instance we could see a pullback to 2500/2600s range followed by a higher high > 2750 before rolling over in a bigger C wave to our lower targets <2300.
Alternately, this 393 point move off the Decembers lows could in fact be the first leg of a new bull market impulse, by which the next low in February or March would be a corrective leg or wave 2 correction and then a new bull leg or wave 3 attacking all time highs can begin. You can read more about this in last week’s report section labeled “Bear ended in December 2018” views at bottom of that report.
How much of a pullback and what are the targets?
Assuming 2739 was in fact the interim top off the Dec 24th low of 2346, we would expect a pullback to target anywhere from 2646 to 2618 (if shallow).
Our Market Map also known as an Elliott Wave pattern analysis continues to fire on all cylinders, and we have closed 18 of 19 trades for the year for avg gains of 13%.
SRP Swing Trade Members have booked more than enough gains to pay for their service quarter over quarter OR year over year so far, depending on size of portfolio you measure. The SRP Model Portfolio is up 20% weighted for total trades closed!!
Since our call for Interim A bottoming at 2346, the SP 500 has rallied 393 points, or nearly +17%.
We continue to find swing trade opportunities, and abide by our 8% sell half rule to lock in gains, so we’re doing the work for you here. We have a number of SRP portfolio names continue 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):
The SRP model portfolio has outperformed the SP 500 by 12% YTD! The Russell 2000 index is up 12% YTD, and we are still ahead of the curve on a relative basis.
Now for some charts…
SP 500 Charts: Interim top likely in, which was either (A) of B wave or possible Wave 1 of new Bull leg. Retrace will determine a lot; minimum targets 2646 / 2618 /2589
Biotech (XBI) Chart: interim top likely in place, and could form a right shoulder of a more bullish IHS formation on next pullback. Biotech only as good as the market around it. We will be watching.
SPXA50R Chart: stocks above 50dma have skyrocketed, while stocks above 200 dma have come back to neutral. Time for a stock market pause.
B waves can be tricky. Is this only just the (A) of the B wave or all of B and now C wave to new lows in 2019? Or, are we correct with our alternate scenario that the Bear Market ended in December and this rally is in fact a larger Wave 1 of new impulse?
- Interim Wave B up from the A down from 2941 to 2346 on SP 500 is likely completed, but it is too early to tell if this is all of B or just the (A) of B. Given some of the cycle work we follow, we would not be surprised to see this drag on in 200-400 point ranges over the next few months to an turn in May window.
- Market stalled right under the 200dma and 50wma averages, and within a few % from the .618 retrace of the entire 2941 – 2346 decline. We expect some backfilling here.
- 6 of 7 weeks up, +393 points and 16.7% higher from Dec 24th lows = good job by the bulls. The Fed and monetary policy still on pace with their balance sheet reduction. They said they are “open” to the idea of making changes to reduction, and Powell said they have stopped the “autopilot” but the fact of the matter is that they are still proceeding with balance sheet reduction and rate hikes are still expected this year.
We believe active management and swing trading will vastly outperform the passive index fund investing in 2019. We thank you for your trust in our work to help navigate your accounts positively through all market environments. Our track record is transparent. 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 17 names this week.
AAON – weekly ascending triangle forming. 40-42 is likely target. Company involved in selling air conditioning and heating equipment in the US and Canada.
SAIL – could be a big breakout name in 2019. Company designs, develops, and markets identity governance software solutions.
BE – post IPO weekly double bottom, capitulation volume? Company designs, manufactures, and sells solid-oxide fuel cell systems.
WTER – small cap explosive weekly setup here, volume coming in. Company produces, distributes, and markets bottled alkaline water in the United States.
ENPH – weekly cup / handle formation, with higher targets above 7.60. Company designs, develops, and sells microinverter systems for residential and commercial markets.
LOCO – breakout and backtest of range in play here. Anyone like tacos? Company develops, franchises, licenses, and operates quick-service restaurants under the El Pollo Loco name.
ZS – Ascending 4 week base near all time highs breaking out of a multi month pattern. Company is a global architecture for Security.
TME – post IPO breakout and consolidation with inside week last week. If China gets going, this has ramp potential. Company operates an online music entertainment platform that provides online music and music-centric social entertainment services in China.
MOGU – an SRP name we’ve traded a few times. Daily flag in a weekly post IPO consolidation pattern. We like it for higher. Company operates as an online fashion and lifestyle destination in China.
FTNT – Double bottom weekly base pattern, breaking to upside on right side of base. Company provides broad, automated, and integrated cybersecurity solutions worldwide.
CURLF – Looks like a breakout ready to test post IPO highs. Company operates as an integrated medical and wellness cannabis operator in the United States.
QTNA – Strong week last week, looking for higher. Company designs, develops, and markets wireless communication solutions enabling wireless local area networking.
PYX – Attempted weekly breakout last week on heavy volume, backtesting now. Company offers products in the leaf tobacco, e-liquids, industrial hemp, and cannabis industries.
ACB – Double bottom weekly base pattern, breaking to upside on right side of base with heavy volume. Company’s products consist of dried cannabis and cannabis oil.
HZNP – 13 week overall base near 52 week highs breakout. Company provides medicines that address unmet treatment needs for rare and rheumatic diseases in the United States and internationally.
TREX – 4 week base on right side of multi month base, breaking out of right side. Company manufactures and distributes wood/plastic composite products, and related accessories primarily for the residential and commercial decking, and railing applications in the United States.
IGT – weekly accumulation here it looks. Company operates and provides technology products and services across lotteries, electronic gaming machines, sports betting, and interactive gaming markets worldwide.