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Market Insight
The major indexes all consolidated their most recent gain in a healthy and constructive manner last week.
Additionally, the distribution count is now low and distant. Not to mention, further distribution is due to fall of the count next week due to time, so it is not at all a concern at the moment.
Furthermore, today was day +7 above the BP in terms of the Market Cycle. So, continue to watch for volatility to dampen as we remain above the bolded pivot and leadership continues to broaden.
In general the major indexes are all in solid shape since they’ve reclaimed the BP and followed through. The only thing that bothers us a bit is the fact that the DOW is still the only index trading above its long-term downtrend line.
While this is a welcome positive divergence, we now need to see the other major indexes follow suit. Remember, the possibility that the current rally attempt is just another bear market rally still exists, so the action from this point forward is extremely important.
Fortunately, and most importantly, even though the general market finished slightly lower last week, the number of constructive setups in new potential leaders, from the strongest industry groups continued to grow a fairly quick pace.
It is this sort of subsurface strength that we are looking for, especially when the market is either consolidating, or correcting. This is the most critical part of the equation, once a new rally attempt is underway.
It is this continual improvement in the health and breadth of the market’s leadership that ultimately sustains any healthy uptrend in the general market. This is why it’s so important to watch and understand what the leaders are telling you!
So, continue to keep a close eye on how rotation is taking shape as we move forward from here and be sure to maintain an updated watch list of the strongest stocks, in the strongest groups.
Then, set alerts on your most actionable names and be ready to buy these potential leaders as entry areas present themselves.
Never forget, the principles of progressive exposure and financing risk along the way are always in play, no matter what. This never changes and will continue to be of the utmost importance until the general market becomes much more cooperative than it is, or has been.
As we always say, first and foremost manage your risk and the money will be sure to follow. We are still very early in the process here, so take a deep breath and let go of your FOMO.
For what ever it’s worth, I find that 99% of the stuff I worry about… never happens! Maintaining a calm, clear mind is a must. Starting “late,” with a calm clear mind is a significantly better position to be in than being “early,” but feeling frustrated and worn out.
I can’t stress enough that being the first one in, closest to bottom, means absolutely nothing. It certainly does not guarantee better performance.
The guy that started 10 weeks after you, because he was on vacation building mental capital, can and will most likely will outperform you because of this.
Preserving mental capital is just as important as preserving your hard-earned financial capital.
Also, it’s often easier to make progress after a new uptrend is clearly underway and has proven itself. In general, your risk/reward is typically much better in an established trend.
The lowest price is not always the best price. So, take your time, maintain a calm, clear head and forget about what anyone else says or is doing.
Note: Earnings season is still underway, so check and double-check EPS release dates before you buy a stock. These dates change, and sometimes at the last minute.
The Indexes
NASDAQ
Tickers: None
The NASDAQ drifted into logical support on light volume last week, which is considered a very healthy and constructive way to consolidate its most recent gains.
S&P 500
Tickers: None
The S&P 500 traded in a very similar manner to the NASDAQ again last week. It too drifted into logical support on light volume, which again, is considered very healthy and constructive action. However, S&P is still stronger than the tech-heavy index.
Russell 2000
The Russell 2000 shaped up in a very similar manner to the S&P 500 yet again last week, although the small-cap index exhibited more strength and closed in better shape. In fact, the Russell is now very close to reclaiming its key 200-DMA and long-term downtrend line.
DOW
The DOW shaped up in a similar manner to the other major indexes once again last week and still remains the clear leader of the four.
Sectors & Industry Groups
1 Week
4 Week
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Potential Leadership Groups
- MEDICAL-BIOTECH/SYSTEMS & EQUIP, ENERGY-OIL/GAS/COAL, ALTERNATIVE ENERGY-SOLAR, TECHNOLOGY – SEMIS/SOFTWARE/NETWORKING, BUILDING & RELATED, STEEL, FINANCIAL, & RETAIL
Focus List
GFS
Watch GFS for a big volume move through $67.97, with a sell stop at $65.96 &/or on a constructive pullback to $65.96, with a sell stop at its 10-DMA.
NTNX
Watch NTNX for a big volume move through $28.73, with a sell stop at $27.38.
ARRY
Watch ARRY for a big volume move through $21.54, with a sell stop at $20.00.
CELH
Watch CELH for a big volume move through $100.51, with a sell stop at $96.53 &/or on a constructive pullback to $96.53, with a sell stop at its 50-DMA.
SCHW
Watch SCHW for a big volume move through $81.08, with a sell stop at its 10-DMA.
AMGN
Watch AMGN for a big volume move through $290.90, with a sell stop at its 10-DMA.
CPRX
Watch CPRX for a big volume move through $16.66, with a sell stop at $15.80.
CTKB
Watch CTKB for a big volume move through $15.17, with a sell stop at its 50-DMA &/or on a big volume move through $15.85, with a sell stop at $15.00.
PRCT
Watch PRCT for a big volume move through $46.73, with a sell stop at $44.70 &/or on a constructive pullback to $44.70, with a sell stop at its 23-EMA.
REGN
Watch REGN for a big volume move through $764.59, with a sell stop at its 50-DMA.
Swing Trade Ideas
Swing Trade Ideas contains a mixture of stocks. When the market is in a healthy uptrend, there will tend to be an overflow of stocks that were left out of the Focus List because they looked less actionable, despite being of similar fundamental quality, or were of lower fundamental quality altogether than the stocks included in the Focus List section above.
Because this section also includes stocks that are at times, devoid of fundamentals and typically only included for technical reasons, extreme care should be taken when trading these names. These stocks are there for experienced traders with a shorter time frame, that has a thorough understanding of position sizing risk and management.
CP – Constructive Pullback
PP – Pivot Point
SS – Sell Stop
TS – Trailing Stop
CALX – PP $70.00, SS 23-EMA.
MSI – CP $258.53, SS 10-DMA.
MTSI – PP $72.64, SS 10-DMA.
PDD – PP $72.74, SS $69.88, &/or CP $68.12, SS 10-DMA.
PDFS – PP $31.13, SS $30.00.
ADM – PP $96.00, SS 23-EMA.
AMPX – PP $12.55, SS $12.00.
GS – PP $389.58, SS 10-DMA.
HRB – CP $42.00, SS 50DMA.
NDAQ – CP $64.78, SS $64.06.
NRDS – CP $14.05, SS 10-DMA.
BIIB – CP $300.00, TS 10-DMA.
DAWN – PP $21.58, SS 50-DMA.
IMCR – CP $61.32, SS $60.00. LF $61.32, SS $60.00.
INMD – PP $36.37, SS 23-EMA. LF $36.37, SS 23-EMA.
GILD – PP $83.80, SS 10-DMA.
HALO – CP $52.00, SS 10-DMA.
MEDP – PP $225.00, SS 10-DMA. LF $225.00, SS 10-DMA.
PCVX – PP $46.03, SS 10-DMA.
SILK – CP $49.00, SS 10-DMA. LF $49.00, SS 10-DMA.
VRTX – PP $316.48, SS 23-EMA.
Watchlists
ACGL ALNY AXSM CALX CELH CHWY CHX DGII DICE ELF FSLR GILD INBX ISEE MEDP NUVL NUVL PDSB PI PRTA PRVB SMCI SWAV TMDX TMUS UTHR WING
ABNB AMPX ARHS ARRY ASAN ASO CEG CPNG CRBG DOCS EE EMBC ESAB GFS MBLY NRDS OWL PSNY RIVN SGML STEM TPG UDMY YOU
AEHR ALDX AMLX APPS ATNM BCAB COGT CPRX FDMT FNGR GRWG IMVT MAXN MGNI MNSO MRSN NINE RVNC RVPH RYAM RYTM SE TGTX TH
A AAON ABCL ACDC ACLX ADM AEHR AKRO ALGM AMGN AMKR AMLX AMPX AMR ANET ARGX ARRY ASND ATAT ATNM AXGN AXON AXSM AZPN BCYC BHVN BIIB CAH CALX CCRN CEG CELH CF CPRX CRBU CRDO CROX CTKB CTVA CVLG DAWN DECK DEN DGII DHI DICE DVN DXCM ELF EOG ETSY EXTR FCFS FDMT FIX FLR FN FREY FSLR FUTU GFS GILD GLP GMAB GS HAE HAL HALO HDSN HLIT HP HRB HRMY HZNP IBKR IMCR IMVT INBX INMD IONS IRDM ISEE IT KDNY KRTX KRYS LEGN LEN LSCC M MACK MAXN MBLY MCD MEDP MELI MNSO MPC MRNA MSI MTSI MUR NBIX NDAQ NEX NOG NRDS NTNX NUVL OI OLK OXY PARR PCVX PDD PDFS PHM PI PODD PRCT PRME PRTA PTLO REGN RETA RJF RMBS RNR RYTM SANM SATX SCHW SFM SGML SHLS SILK SLB SMCI SPWR SPXC SRPT STBA STEM STLD TBT TDCX TDW TH TJX TMCI TMDX TPG UDMY ULTA URI UTHR VRNA VRTX VTYX WING WWE XENE XOM XPOF YMM ZYXI
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