A huge week for the markets with the most positive bounce for two years …
BUT … I think the markets have to do more before we can be comfortable that there won’t be another meaningful downturn.
Today there are a number of attractive setups in both directions, and I would still say the markets are quite challenging.
Protect your profits early and don’t take anything for granted.
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At the start of this week’s review I’m showing you our new options Strategy Recognition feature, which is embedded within the Analyzer. It’s a great way of combining education within an application.
Also, I’m showing how the new Toolkit will look, almost like a trading terminal … but I promise it’s super friendly!
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Literally just another day or so to secure the 50% discounted National Hotel rate for our Miami Bootcamp, so if you want to be live in the room with us, please use the special booking link asap. If you don’t have that link, get in touch with Support Here. There are other hotels in the vicinity too, but we have secured unbeatable rates here.
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Current Market Behavior:
Last week I mentioned that my take was still bearish on the markets overall, so on the face of it that looks like a terrible commentary.
But I also said we were in a highly sensitive environment where any improvement in the Ukraine situation could see a dramatic upward surge.
So, we could call it evens, right?!
The longer term market timer – my OVIsi – is still negative but remember it moves slowly, and when I look at all of its three components in a granular way, it’s actually marginal, so it could flip quite quickly from here.
The medium term SPY Swing Timer is positive and not overbought, while the short term timer came out with a strong bullish signal on Thursday, which turned out well for Friday’s follow through.
Now we’ve finalized the arrow graphics to distinguish “normal” from “strong” signals on the short-term timer, I’ll do that video I’ve been promising.
Again, please do not simply follow the arrow signals blindly.
Right now, the major indices remain below their 200-dma’s, and for a bullish market to resume you really need them to consolidate above that level.
Not that there’s no fun to be had in the meantime, but let’s be objective. There are challenges ahead for the markets in all sorts of ways. Supply chains, energy prices, inflation, interest rates, worldwide demand, etc.
It’s all very well highlighting one aspect – say interest rates – and then saying markets have risen before as rates have risen. But that’s like examining a chess board by only counting the pawns.
As we sit right now, my view is that the markets need to realign somewhat, but there will be winning sectors. So if you only like to trade bullish you’ll still be able to do that.
Overall, what you’ll see today is me highlighting trades that are good examples of our “Trade What You See” philosophy. There are decent setups in both directions right now, but the big indices still have plenty of work to do in order to be convincing.
You could say there is plenty of room to the downside … and upside! Ultimately this means a few months of rangebound basing action would be preferable.
Market Outlook:
My overbought shouts over the last couple of weeks were spot on. Many of those stocks have now retraced dramatically, with some also now consolidating near a Key Level, which makes them interesting again.
Stock Selection:
A few nuggets today and plenty of learning examples. Of particular interest are:
DAR, ENPH, EVGO, LOW, MPC, RTX, SLB, TOST, TPIC, WOOF, WSM.
But you do need to watch the video … not all of them are completely ripe just now.
Application:
Like last week, I had to run a number of Fast Filters to find what I like. This week I’ve also included a few higher risk potential short squeezers to consider.
Software Upgrades
Today I’m showing you the new options strategy recognize feature – it’s a very cool way to teach options in the same dynamic way that I learned them. This application is something I built for myself many years ago, and now it’s about to be released for you.
Also, you’ll see the first glimpse of how our new Terminal will operate, with your memberships discreetly on the left margin. This will shortly be released and every application inside it will be progressively upgraded to the latest look-and-feel.
Along with that, our education components will soon be dynamic where you can watch, learn and be tested to see how well you’re getting on, and what help we can provide to ensure you’re on the right track.
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Remember, you can play the video at 1.25x or 1.5x speed if you want to save time! I have placed all the stocks covered in today’s review in your “Latest Preview” watch list.
