08 Apr Weekly Market Map Forecasts and Trade Ideas Report
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Weekly Market Forecast Maps and Swing Trading Ideas Report: April 7th
- Market Analysis – 5th wave bull leg marches on, 15 weeks in a row now
- 2019 remains the year of the micro cap and we’ve closed out 2 big winners for +150% and +100% in just 2 months and our March 13th Buy Report on SOLY is now up 80%!
- Check into Tippingpointstocks.com! Read our recent blog entry here (click to read)
Key Items for this week:
- New All Time Highs coming — but when?
- Breadth and Market Internals
- What are the next targets for the SP 500?
For the week ending April 5th, the market indexes rallied higher off past 2 weeks’ consolidation for what is now the 15th weekly advance off the 12/24 low, with the SP 500 now positive 12 of those 15 weeks. It has been an incredible bullish advance, perhaps even unbelievable for investors around Christmas time.
We’ve had a few misses of late in SRP, but TPS is absolutely on fire and you should consider joining to round out your investing options with our services!
Breadth off the December lows was extremely strong, indicating strong buying participation. However, as we’ll show you in this report, the recent weeks have shown less and less participation – something we would expect in the waning 5th wave of an advance. Sentiment is beginning to get frothy here and talk of new All Time Highs only a few % away seems a given, but will it happen immediately or will we need to wait a few weeks?
We are swing traders and stock pickers so we welcome small consolidation so we can pounce on the best opportunities that no one else wants to buy. Individual stocks can move dramatically within one to two days and that’s what we look for…a stock reversal opportunity with catalysts!
| Week ending 4/5: | |
| SP 500 | +2.1% |
| Russell 2000 | +2.8% |
| Nasdaq 100 | +2.7% |
| Dow Jones 30 | +1.9% |
New All Time Highs coming — but when?
15 weeks have elapsed since the December 2018 bottom, when the SP 500 closed Christmas Eve at 2351. Now, the SP 500 sits at 2892, just 1.6% below the previous all time high of 2941. So, it’s safe to say we should test that level in the coming days/weeks, right? Maybe…maybe not though.
As Troy Bombardia notes, “In an act of perfect symmetry, the S&P’s 15 week rate-of-change has gone from below -15% to above +15% in the past 15 weeks. (This is) a short term bearish factor for stocks, but not bearish after that.”
Odds are higher for a consolidation and or pullback before testing previous all time highs. Recently at SRP we have been talking about the 2895 target on the SP 500 for a few weeks, we essentially hit that on Friday. Now earnings season begins and we will be curious how the outlook is for the larger companies in their conference calls.
Clearly the Chinese market has bottomed and has provided a sentiment lift worldwide, in addition the German DAX is another good indicator and has been on fire as well.
Breadth and Market Internals
An interesting development here. The % of SP 500 stocks above 200 dma has broken recent highs while % of SP 500 stocks above 50 dma lag. We consider the % >200dma breakout confirmation of the strength of this rally, but are still considering this a wave 5 and should expect breadth to soften here. In addition, sentiment is starting to get a little over bullish, with the 3 dma of the put call ratio nearing past turning points (see chart).
Breadth & Market Internal charts:
What are the next targets for the SP 500?
Last week looked like a little bit of a blowoff, whereby the SP 500 gapped up every day and has yet to fill Monday or Friday’s gaps. 2895- 2900 should prove solid resistance based on options open interest as well as the psychological barrier level.
At this point, before we really zoom in on a retracement level, we’ll need to see the SP 500 price break the 13ema, currently at the gap level from last Monday around 2848 and rising. Stronger confirmation will be a close below the 34 ema, currently around 2806 and we have been highlighting that for the last few weeks.
From there we will be able to better map our a corrective ABC consolidation thereafter, which should then set up a very bullish rally into the Summer and early Fall. Things are looking overall bullish for the potential long term Bull Cycle from the Dec 24th 2018 lows. It does appear that “Alternate” ABC Count we discussed a few months back where the Bear Cycle was the entirety of 2018 calendar year is in play, meaning an obvious new Bull Cycle continues.
We are only looking for a sideways to slightly lower consolidation (similar to 2016). Small caps are lagging on this overall rally, and so we’ll look for them to bottom out first. SRP will be very active over the coming weeks.
Now for some charts…
SP 500 Charts: Wave 5 can extend, possible 2900-2930 area test, before correction. Corrective targets 2760 / 2700 / 2660, but follow the 34 day EMA line for best results.
This chart shows possible 5th wave as an “Ending Diagonal”, so could have more more pullback, then one more surge higher.
Biotech (XBI) Chart: Consolidation led to move up out of range, but major resistance above. Not likely to break through on first attempt. Needs pullback with 80-82 region low end.
VIX Chart: Short term strength (volatile for markets) picking up, but long term <200dma is bullish for the markets
Bottom Line:
- Market showing exhaustion signs particularly with consecutive daily gap ups (we saw this in January 2018)
- Bigger term retrace levels are 2660 / 2700 / 2760, which ideally would give us a launchpad to attack new all time highs this year. 2665 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 but could be temporary.
- The FED is very accommodative, which has helped the market.
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) We have a new report coming out Monday this week!! April 7th! Join now for $999 per year charter rates, limited to 200 members.
HYRE up +100%, SOLO up +300% this year already and our most recent research from March 13th is already up 80% in just 3 weeks (SOLY).
Our next report comes out Monday morning and we liken this company to being the next Procter and Gamble combined with Amazon!!
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 12 names this week.
TWLO – 4 week consolidation back to 13wma. Company provides a cloud communications platform.
COUP – 9 week base to 13 wma from all time high breakout earlier this year. Company provides cloud-based business spend management platform.
FHL – post IPO rally, may consolidate here a bit, but looking strong. Company operates digitized brokerage platform.
NETE – low volume, but could be a steal at these levels. Be sure to have sell limits in place in case it moves quick. Company operates as a financial technology and value-added solutions company.
I – company holding its 20MMA nicely and follow through on weekly looking likely. Company provides satellite communications services worldwide.
SE – 5 week base flag forming. Company engages in the digital entertainment, e-commerce, and digital financial service businesses.
CDNA – 2 week consolidation back to the 34wma. Has been strong support during its uptrend past few years. Company provides transplant diagnostics.
MTOR – Above 23 and it could fly. Company focuses on all aspects of original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation, and industrial sectors.
NIO – could be accumlation going on here at the lows. Move back to 6 not out of the question. Company designs, manufactures, and sells electric vehicles.
DBX – weekly inverse H&S forming. Company provides a collaboration platform worldwide.
FTNT – 8 week base, holding 13wma. Company provides broad, integrated, and automated cybersecurity solutions worldwide.
MTZ – weekly breakout of right base here. Infrastructure construction company.