19 Feb Weekly Market Map Forecasts and Trade Ideas Report
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Weekly Market Forecast Maps and Swing Trading Ideas Report: Feb 17th
- Market Analysis – Blow off top to this bull leg started 12/24, now awaiting pullback
- SRP YTD performance – 19 winners, 1 loser, Model Portfolio up ~22% YTD!
- 2019 is the year of the micro cap? We think so, check into Tippingpointstocks.com!
SP 500 up +430 in 8 weeks:
- Next pullback crucial to determine Bull/Bear continuation
- Is our bull alternative scenario from Feb 4th coming to fruition?
- What are the targets for the next pullback?
For the week ending Feb 15th, the major indices rallied from lows Monday to finish the week in what looks like a blow off fashion. 2 weeks ago we had a doji candle (implies indecision), followed by a bullish hammer last week, as the bulls took over, knocking over whatever hope the bears had for the week. The bulls may be sitting pretty here, but most likely the bears’ short stops are are taken out by now, so we struggle to see what can move the market higher from this level.
| Week ending 2/15: | |
| SP 500 | +4.2% |
| Russell 2000 | +3.1% |
| Nasdaq 100 | +2.5% |
| Dow Jones 30 | +2.1% |
Next pullback crucial to determine Bull/Bear continuation
Last week’s bullish hammer candle feels like a blow off top, and surely there will be a backtest of the 200 dma coming soon at a minimum. As of now, Jan/Feb monthly candle are both inside the body of the December candle, so there hasn’t been a range breakout yet. This can stay choppy until December’s high (2800) or low (2346) has been broken one way or the other. For example, it took 5 months to break out of range from Feb 2018 monthly candle. We will have some range trading to contend with, but our ES alerts (SP 500 Futures Trading) services benefits from being both short or long depending on the trade. (You can read more about those at the top).
Is our bull alternative scenario coming to fruition?
From the looks of it, we have a 5 wave move off of the Dec 24th lows, which would imply an impulsive start off of an ABC correction as indicated in the chart just below. What that means is we should see a corrective ABC pullback over the coming weeks/months that consolidates above 2500, should this scenario play out. If in fact we are correct in this analysis, then the leg that follows from the next major low should attack last year’s high of 2940 region, and then ultimately make new highs. Before we get ahead of ourselves, let’s see how the next pullback looks.
If in fact we are still in a Bear Market scenario, the B wave can take many shapes and sizes (triangle, flat, etc), and we could still see a pullback to 2500/2600s range followed by a higher high > 2800 before rolling over in a bigger C wave to our lower targets <2300. However, we will be watching to see how the structure looks on the test of 2850-2900 this year to distinguish whether we are in the bullish or bearish scenario.
Along the way, there will be plenty of trade setups for SRP members, so we’re not worried about that.
What are the targets for the next pullback?
Assuming this past week’s high of 2776 was the interim top off the Dec 24th low of 2346, we would expect a pullback to target anywhere from 2643 (if shallow) to 2610.
Our Market Map (a.k.a. Elliott Wave pattern analysis) continues to provide us with great opportunities to keep our foot on the gas or let off, and we have closed 19 of 20 swing trades for the year 2019 for avg gains of 12%.
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 22% weighted for total trades closed!!
Since our call for Interim A bottoming at 2346, the SP 500 has rallied 430 points, or +18%.
We continue to find swing trade opportunities, and abide by our 8% sell half rule to lock in gains, so we’re doing our best work for you here. 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. We saw INOV finally breakout late in the week after holding in a range for 6 weeks since our alert, patience can pay.
Our year to date performance is shown below.
SRP Model Performance (YTD):
The SRP model portfolio has outperformed the SP 500 by 11% YTD! The Russell 2000 index is up 16% YTD, so we are still ahead of the index on a relative basis.
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 2643 / 2610 / 2580
Biotech (XBI) Chart: interim top forming, and could form a right shoulder of a more bullish IHS formation on next pullback. Note the 13/34 ema have not crossed positively yet.
NETADSPX Chart: Net advancing stocks – declining stocks over a smoothed out period show divergence, implying lower net positive breadth for SP 500 stocks during the most recent rally. Warning.
Bottom Line:
We’re strongly considering that our alternate bullish scenario is playing out, as shown over the past few weeks. While we are not 100% certain of this, we have to deal in probabilities to best trade our Market Maps successfully. Here’s what we know:
- 5 wave impulsive move off the 12/24 low of 2346, now up 430 points, and likely completing soon.
- Weekly RSI right at the point of breaking its down trend line (very bullish historically)
- % of SPX stocks above >50dma has gone from 6.2 to 92.2 in 8 weeks
- % of SPX stocks above >200dma has gone from 15.8 to 61.4 in 8 weeks
- Market has exhibited similar characteristics to 2016 low – bottoming at the 200wma, initial % of stocks below 50/200dma, # of weeks up off bottom
We believe active management and swing trading will vastly outperform the passive index fund investing in 2019.
We also advise SRP Members to consider all of our services so you can attack the market from 3 different angles. Long Term growth stocks, SP 500 trading up and down movements, and Swing Trading stocks and ETF’s.
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.
RGNX – nice base pattern here, looking for 54-59. Company provides gene therapy product candidates to deliver genes to cells to address genetic defects.
BE – bullish engulfing week last week, up 12%. Test of 13.50s next? Company designs, manufactures, and sells solid-oxide fuel cell systems.
BERY – looks ready to break out here, with nice IHS forming on weekly. Company manufactures and supplies non-woven, flexible, and rigid products.
MGNX – massive volume and spike 2 weeks ago, but flag consolidation, could be going higher from this pullback. Company discovers and develops antibody-based therapeutics for the treatment of cancer.
IGT – up over 5% last week, still looks to be building a base on weekly. Very nice setup big picture. Company operates and provides technology products and services across lotteries, electronic gaming machines, sports betting, and interactive gaming markets worldwide.
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 – 5 week base near highs, looking good for breakout. Company operates a self-service data analytics software platform.
ACB – Pullback last week to 13/34 wma and coiling here. PYX on the list last week was up over 25%, so the space is still doing well. Company’s products consist of dried cannabis and cannabis oil.
ZS – Ascending 4 week base near all time highs breaking out of a multi month pattern. Company is a global architecture for Security.
HOME – retest of top of gap down coming, and if through, could get all the way to 26-28. Company operates home decor superstores in the United States.
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.
WDC – setting up for higher prices on the weekly chart here, consolidating in a high flag over past 3 weeks. Company develops, manufactures, and sells data storage devices and solutions.
TTD – Breakout to new ATHs last week. Company is a technology company, providing a self-service omnichannel software platform.
QTNA – Up over 6% last week. Once above 19.40, likely heading to test ATHs. Company designs, develops, and markets wireless communication solutions enabling wireless local area networking.
HZNP – long term chart looks great. Should be heading to 28 region over coming weeks and months. Breaking out to new 52 week high. Company provides medicines that address unmet treatment needs for rare and rheumatic diseases in the United States and internationally.
AMRN – 5 week base pattern, coiling here. Company focuses on the development and commercialization of therapeutics for the treatment of cardiovascular diseases.