11 Mar Weekly Market Map Forecasts and Trade Ideas Report
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Weekly Market Forecast Maps and Swing Trading Ideas Report: Mar 10th
- Market Analysis – markets fall 5 days in a row to close the week down 2-4%
- SRP Model Portfolio YTD performance – 24 winners, 5 losers, up 14% 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:
- NASI sell signal!
- Market Internals (updated)
- What are the next targets for the SP 500?
For the week ending March 8th, we finally got that forecasted pullback we had been warning of for the past few weeks, with the broad indexes falling between 2-4% in an impressive 5 day decline for all but the NDX, who “only” had a 4 day decline! Hopefully many of you caught our tweets as early as Monday midday, when we posted things like this and early morning Tuesday posting this. Point being is we were pounding the table all week that our call for a Double Terminal Top was likely correct and to be careful on the long side.
Add that to the fact that we started Mercury Retrograde window on Tuesday, we said to expect volatility. An excerpt from last week’s report said, “…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…”
Why do we share this?
- We are experienced investors and traders here, and we have seen enough games on Wall Street and with the markets to know when it’s time to press or take our foot off the gas. That said sometimes we will get positions wrong and caught in a downturn.
- We won’t get every turn right, but in this case, there were at least 8-10 metrics of all kinds that we look at, and they were all were pointing bearish, so we take note when things line up that way, in order to have a well rounded view of our Market Maps and provide some value add.
We mentioned in Thursday’s morning report that it’s going to get quiet news wise over the next few weeks, with FOMC going into blackout from the 9th to 21st and corporate buybacks start to go into blackout in middle of month.
Without much Fed Speak and buying support, it sounds to us like a good excuse for sellers to take the reigns.
|Week ending 3/8:|
|Dow Jones 30||-2.2%|
NASI sell signal!
One of the more respected analysts we enjoy following is Jesse Stine. He is particularly fond of using NASI summation as a bull/bear indicator, and we agree with the thought process behind this technique. When higher beta stocks start to lose momentum, it can signal pause for risk on assets (and broad markets). As you can see, past summation turns have led to corrections over the course of days to weeks. This further confirms that we are still seeing breath deteriorate and need to base here.
Market Internals (updated)
Last week, we pointed out the significant number of new closing highs without so much as even a 3% pullback, and it seems as though it was perfect timing to point that out. We didn’t get one new closing high last week! Additionally, NYSI has started to curl downwards confirming negative breadth which adds credibility to this current selloff. We will be watching for a positive turn in breadth around our downside price target of 2705 or 2670, otherwise it could lead to more selling afterwards.
What are the next targets for the SP 500?
Last week should be the first leg of a multi week correction for the SP 500, and we still maintain 2705 is a good initial retracement level. Prices declined for 5 days, holding and closing above the 34 dma Friday. We could get a slightly lower low Monday or Tuesday, but odds favor a rally back to the breakdown zone, conveniently located around the 13 dma, or 2770 region. If we get a bounce there we would expect price to fail and turn back around to make new lows to the 2705 region, with strong support between 2705-2685.
As we highlighted last week, “…watching for close below 13dma (2774) to kick off a possible multi week pullback…” and so price has confirmed our expectations.
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 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: Corrective decline in process. Close below 13dma + negative breadth confirms. Targets 2705 / 2685
Biotech (XBI) Chart: With a blowoff top 2 weeks ago, last week biotech led to the downside, nearly 6% for the week. The first gap was tested and we will be watching for a break of the channel in the coming weeks along with the current SP 500 pullback.
- Market has confirmed interim top from 10 week rally off 12/24 lows.
- Bigger term retrace levels are in the 2625-50 region, which ideally would give us a launchpad to attack new highs this year. 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 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.
PI – 3 week consolidation on lower volume. We 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.
TLRA – nice flag building after run-up, holding above 13ema. As long as above 13ema, could break north from here. Company operates a programmatic, self-service, seller platform to monetize and manage premium video content across various Internet-connected screens and devices.
MTC – post IPO base building here, which is our bread and butter pattern. Company develops and deploys platforms that enable financial institutions to engage in securities market transactions and settlements.
GSKY – relative strength last week vs. broad markets. High bull flag, and upside targets 14.50 region. Company provides point-of-sale financing and payment solutions to merchants, consumers, and banks.
LTHM – post IPO base and any dip below 12 is getting quickly bought up. 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.
IMAX – high consolidation last week, and could be seasonally strong window coming into summer blockbuster movies. 13/34 wma about to cross over too. Company operates as an entertainment technology company that specializes in motion picture technologies and presentations worldwide.
CHD – 3 week high consolidation above 13wma. Company develops, manufactures, and markets household, personal care, and specialty products.
JCI – strong close last week, holding 13ema. Company operates as a diversified technology and multi industrial company worldwide.
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.
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.
CBLK – double bottom on weekly, and could look to try and work its way into the gap over coming weeks. Company provides security solutions in the United States and internationally.
CGC – 7 week base for this stock, looking like a nice flag consolidation above 13wma. We like the low volume pullbacks. Company engages in growing, possession, and sale of medical cannabis in Canada.
TBLT – low of 1.33, basically filling 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 after 6 weeks in a row decline, we’re suspecting it will reverse.
OSTK – relative strength vs. markets last week with IHS forming and a possible change of character? Company operates as an online retailer in the United States.
STAA – last week’s price action held 13wma, which still looks good after markets finish their corrective pullback. 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.
IVC – gap up and 3 week (14 trading day) consolidation. Could take a bit more time to work off, but this is bullish as long as 8.50 area holds with upside to 12.50s possible. Company designs, manufactures, distributes, and exports medical equipment for use in home health care, retail, and extended care markets.