Hi there,
A big thanks to everyone involved in our wonderful Orlando Bootcamp last week!
It was a special event, and next year we’re looking for a new venue, with the early money being on… MEXICO!
One of the big innovations we started to roll out was our TradeFinder filtering directly from the charts, as well as the ability to analyse any options trade there too.
The amount of time this saves is extraordinary, and should be used to focus on quality, not quantity of trades.
It also enabled us to spend more time on practical exercises. For all events moving forward I anticipate a 50/50 split between learning each strategy and then doing practicals to find and analyse trades.
Over the next few weeks, we’ll be deploying further upgrades and fixes to complete all this to its optimal capability. Plus, we’ll be deploying the brand new education suite that has been two years in the making. Here, you’ll be able to cement your knowledge with state-of-the art fun learning tools – including quizzes! – all at your own pace.
Onto the markets…
So, we’re in the thick of earnings and, as I started my review, this week ahead was all looking a bit sketchy… until I progressed onto my post earnings and Shrinking Retracements filters.
Directionally we’re still looking a bit ambiguous right now, but there are a few decent individual setups that we can look into more closely.
As I mentioned a couple of weeks ago, my expectation is that this market pullback will NOT turn into a capitulation. I suggested 5-8% from the peak, and we’ve already hit that range.
As I also mentioned, the IWM was likely to have the steepest pullback, and it is, having retraced about 10% from the peak while the QQQ took a 9% hit and the SPY and DIA around 6%.
The indices are by no means out of the woods yet, so much will now depend on how earnings plays out.
Market Outlook
Watch the video at the foot of this email for more detail.
Technically, the indices look vulnerable, but individual earnings have so far been reasonably encouraging. Each index has breached its 50-dma and is hanging in no-man’s land between that and the 200. The outcome is either a recovery or waterfall. Some sideways chop is more likely.
Right now, I’m minded to focus on individual post-earnings scenarios where the stock has tipped its hand as to its most likely direction.
Our market timing is a real strength that few others possess. Being good at market timing enables you to swim WITH the tide.
The Main Indices
All the indices are below their 50-dmas but haven’t got near their 200-dmas.
As I’ve said many times, the IWM will typically show more profound weakness earlier than the others. To that end it’s already down around 6.70% from its peak, with the DIA down 5% from its peak. The SPY and QQQ are not even 3% lower than their peaks… yet.
Keep sticking with our game plan of AAA setups near Key Levels.
Don’t get distracted by missed opportunities.
Market Timers
- Longer Term Market Timer (OVIs): Green.
- Medium Term Swing Timer: Bearish.
- Index OVIs: Pretty much all in the red to varying degrees.
This week I’ve focused on post-earnings setups exhibiting OVI, consolidations near Key Levels and Shrinking Retracements.
Remember a chart needs to have the right qualities for you to consider trading it.
Pick your game and stick to the best quality setups that conform to it.
My game is OVI, near Key Levels, Shrinking Retracements, and a consolidation/sideways move. The other two Big Money Footprints are desirable but those four are essential to ME!
You can watch my full analysis in the video below.
Video analysis
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.
