25 Mar Weekly Market Map Forecasts and Trade Ideas Report
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Weekly Market Forecast Maps and Swing Trading Ideas Report: Mar 24th
- Market Analysis – bearish topping candle last week, see how this week consolidates
- SRP Model Portfolio YTD performance – 26 winners, 6 losers (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:
- Index divergences causing cracks in foundation
- Breadth confirming selling action
- What are the next targets for the SP 500?
For the week ending March 22nd, the market began to finally collapse under the weight of failing internals and divergences noted the past many weeks. Last week, we warned as the market made new highs, despite what appeared to be an extended 5th wave, there were warning signs, including lack of similar participation in the Russell, Tranports and Homebuilding indexes. This past week, those divergences are even greater and there are new breakdowns we will share with you.
This upcoming week will conclude the end of the first quarter, and the Mercury Retrograde window that started Mar 5th ends on Mar 27th, so we continue to be on guard for twists and turns. It very well could be that the market defies gravity for yet another week or so, but we’ll take it one day at a time. We are swing traders and stock pickers.
The Fed met this past week and here are few highlights from their meeting:
- Fed funds rate unchanged at the range of 2.25-2.50%. And repeating the language from the previous meeting, the FOMC declares they will be patient in determining future rate hikes.
- They (FOMC) declared the economy has changed somewhat since their last meeting of January 29-30, 2019. While labor markets remain healthy, economic activity as slowed from its strong pace of the 4th quarter of 2018.
- The rate of inflation has declined lately due to falling energy prices, but core inflation is near the 2.0% goal. Longer-term inflation expectations are relatively stable.
- Most importantly, the FOMC declared that beginning in May 2019 it would slow the pace of runoff of its $4 trillion asset portfolio and end the runoff of its Treasury holdings at the end of September 2019, exactly two years after it began unwinding its Quantitative Easing programs.
|Week ending 3/22:|
|Dow Jones 30||-1.3%|
Index divergences causing cracks in foundation
While the SP 500 and Nasdaq have made new highs, there has not been participation from the Dow and Russell (as well as NYSE) during the month of March. In addition, % of SP 500 stocks above their 50/200 DMAs have been making lower highs on the recent rally in the SP 500 as well. Also, SP 500 and Equal Weight SP 500 are not following each other in tandem, with the SP 500 Equal weight struggling to hold its recent breakout. We admit that divergences can go on for some time, but price will eventually follow, as they seem to have started last week. Again this is our market index forecast, pull backs should give us stock reversal opportunities.
We continue to find swing trade ideas and it WILL remain a stock pickers market.
With this week’s selloff, momentum in the Summation Indexes remains negative, and in fact only stayed positive once or twice in the month of March. Volume and # of advancing stocks continues to weaken. Friday’s selloff was confirmed by a surge in volume and net decliners. Take Note!!
Market Internals chart:
What are the next targets for the SP 500?
5 wave advance looks to have been complete and is overall bullish for the potential long term Bull Cycle from the Dec 24th 2018 lows.
Price closed exactly on 2800 support last week, and we’ll need to see a decisive close below the 20 dma to confirm last week’s Wave 5 top. Once confirmed in the next few sessions, we are looking for a minimum retrace of 120 – 195 points from the 2860 top, so loosely the 2740-2665 range, which we’ll narrow down for you as we see the structure unfold.
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 26 of 32 swing trades for the year 2019 for avg winning trade gains of 14%. That’s an 81% Win Rate so far after almost 3 months of trading. As time averages out, we 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 4% YTD with less risk!
Now for some charts…
SP 500 Charts: Wave 5 top likely confirmed (waiting for price action this week). Corrective targets 2738 / 2701 / 2665
Biotech (XBI) Chart: Initiation move likely confirmed, downside targets 80-82 region.
- Market sold off hard last week, likely confirming wave 5 completed. However, we await followthrough this week.
- Bigger term retrace levels are 2665 / 2700 / 2738, which ideally would give us a launchpad to attack new all time highs this year. 2652 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.
- The inverted yield curve is of concern.
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 13 names this week.
We are forecasting an interim top for the stock market around these levels, so be patient with some of these swing names listed below. Yes, the stock market is a market of stocks, however, it’s nice to have a tailwind behind us, and currently we’re looking at a headwind.
MTC – no new lows and volume building in a post IPO base, which is our bread and butter pattern. Keeping on the list for now, as long as no weekly close <4.74. Company develops and deploys platforms that enable financial institutions to engage in securities market transactions and settlements.
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.
MOBL – big volume building last month or so and closed at a new relative high last week. Company provides mobile IT platform that enables enterprises to manage and secure mobile applications, content, and devices.
SGEN – high multi week consolidation within a larger triangle formation. Company develops and commercializes therapies for the treatment of cancer.
BOOM – 1) we like the name and 2) a lot of volume building up here inside of a multi month cup and handle formation. Company engages in technical product and process businesses serving the energy, industrial, and infrastructure markets worldwide.
OCX – holding high consolidation post earnings gap touch. 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.
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.
AMRN – staying on the list here, but for now a watch as it needs more time to consolidate. It took 4 weeks to consolidate in January before a 50% move upwards. Now currently 3 weeks consolidation. Company engages in the development and commercialization of therapeutics for the treatment of cardiovascular diseases.
CCC – worth a shot here, given its relative strength to the market. 6 day sideways base forming here, so pay attention above 12. Company merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses.
KHC – relative strength last week all the while forming a 4 week tight base. Odds are a temporary bottom here and a move back to 36 not out of question for a quick trade. Company manufactures and markets food and beverage products.
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.
GSKY – High weekly consolidation and ultimate upside targets 14.50 region around the gap fill. Company provides point-of-sale financing and payment solutions to merchants, consumers, and banks.
PI – High consolidation amidst market selloff, and still looking for upside as long as above 17.00. 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.