The Weekend Routine 8-28-2022
More Downside?
The Market:
The Nasdaq ended the week down 4.4% on the heels of Fed Chairman Powell’s Jackson Hole speech. Powell’s hawkish tone sent the market into risk off mode and the Nasdaq ended the week with a distribution day closing right at the lows. Â
Despite Friday’s bloodbath the markets are still in a Power Trend and there is not a trend of net lows. The Power Trend could come under pressure if we see an uptick in Distribution days (a close of .2% or lower on an increase volume from the previous day) causing a distribution cluster (4 distribution days in a rolling 8-day period) and a break below the 50-day moving average.
Secondary Indicators:
Put Call Ratio: Neutral reading at .99
Percent of Stocks above the 50 day: Nasdaq - 58% S&P - 63%
Percent of Stock above the 200 day: Nasdaq - 32% S&P - 34%
Looking Ahead to Next Week:
The expectation going into next week would be for more downside following this week’s sell off, perhaps testing the 10 week or 50 day moving average. It will be important to pay attention to how leading stocks act if we get more downside. Throughout the week we will hear from a few Fed speakers and Friday will be the nonfarm payroll numbers and unemployment rate, both have the ability to move the market. Â
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Current Portfolio:
ARRY – Had a nice shakeout down to the 21 ema only to bounce and finish the week positive as it consolidates recent gains from a monster move higher. Could be 2 weeks into a high tight flag or potential new base.
CELH – Broke out to all time highs on an increase in volume closing in the 68th percentile of the range holding above the pivot. Market Leader
ENPH – Like ARRY traded down Monday morning to it’s 21 ema and then closed the week positive. 3 weeks into a potential 12% deep flat or square box base. Another market leader.
Actions taken:
Bought: CMG mini coil
Sold: CMG pattern failure
Potential Leaders:
ARRY, CELH, CMG, DVN, ENPH, EQT, GLNG, LNG, LNTH, LPLA, NFE, ON, PCTY, PRVA, SWAV, WOLF
https://www.tradingview.com/watchlists/84325802/
Leading stocks continue to show relative strength compared to the indexes. If the indexes can find their footing it could create a plethora of actionable ideas in the coming weeks.
Actionable Ideas:
CELH – Failed Breakout Pullback - ~ $104.50
CELH broke out to new all time highs with very nice volume despite a weak market. A pullback now to the 21 ema would trigger a failed breakout pullback buy in this leading stock.
GLNG – Failed Breakout Pullback - ~ $27.25
GLNG pushed out of a 10 week cup base on a nice surge of volume after strong earnings. A pullback now to the 21 ema would trigger a failed breakout pullback buy.
OXY – Failed Breakout Pullback - ~ $68.50
OXY broke out from it’s recent consolidation on Warren Buffet news and a rally in oil. A pullback now to the 21 ema would trigger a failed breakout pullback buy in this leading oil stock.
SWAV – Mini Coil - $311.55
SWAV has consolidated recent gains near all time high and build a mini coil. A break above $311.55 would trigger an entry. Using Fridays low as a stop would limit risk to just under 3%.
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The content presented is for informational and educational purposes only. Nothing contained in this newsletter should be construed as financial advice or a recommendation to buy or sell any security. Please do your own due diligence or contact a licensed financial advisor as participating in the financial markets involves risk.