Markets:

  • The Dow appears to be losing a battle with its 200 day SMA as it has CLOSED below the line the last 5 days. It is now nearing correction mode off 9% from most recent 52 week highs, and is looking at a potential FOURTH weekly loss in a row, a feat not accomplished in 26 months. Just prior to the 9.3% drop the weeks ending 2/2-9, it advanced a very impressive 17 of 20 weeks between the weeks ending 9/15/17-1/26. A peek at its weekly chart shows just how taut trade was during those 20 weeks, anything but what we have seen for the majority of 2018.
  • The Nasdaq recorded a bearish piercing line candle Tuesday, and it has also registered two bearish engulfing candles in the last 9 days, one at all time highs from 6/21. We have repeatedly stressed that its success hinges a great deal on the action in AAPL, its largest component, and today it too recorded a bearish engulfing candle. It is clinging to its 50 day SMA here, but the successful retest of the double bottom breakout trigger of 179.04 taken out on 5/4 now has the look of a bear flag. A break below 182.50 carries a measured move of more than 12 handle. Volume trends have been poor with the last significant advance in above average volume coming exactly 2 months ago.
  • The best looking market to me continues to be the Russell 2000, which has witnessed two bullish hammers the last 4 sessions off rising 50 day SMA support. Remember names in this benchmark are somewhat insulated from the ongoing tariff talks as companies within derive the vast majority of their revenues domestically. Its strength has to be even more respected when one factors in its greatest weighting is the financials, nearly 18%, which have been dismal performers at best. 

Sectors:

  • Ongoing concerns in the financial space show no signs of abating as the XLF fell .9% on Tuesday. The ETF recently registered a bearish death cross and has now CLOSED nine straight sessions below its 200 day SMA, as the fourth time touching that secular line since 4/2 proved fatal. The group is diverse, and many names have seen alarming moves as BLK broke below a bearish descending triangle whose trigger aligned with the very round 500 number. IBKR is looking at a potential sixth consecutive weekly loss down 1.6% so far this week, and has lost ground 27 of the last 36 sessions after failing to break above a bull flag at the round 80 number in early May. NOAH is now 32% off its most recent 52 week highs and has slumped 9.3% this week already, after the prior three declined more than 21%.
  • The only sector that fell greater than the financials today was the group bulls did not want to see. Technology slipped 1.2% via the XLK as the ETF is having a tough time with the round 70 number, as it has recorded just one CLOSE above in the last 7 sessions, with 6 of those above 70 intraday. Its failure to see any follow through above a cup with handle breakout from a 70.52 trigger on 6/1 is a red flag, as we know the best breakouts tend to work out right away. Some notable moves in this group come from MU which is now remarkably in bear market territory lower by 20% from most recent 52 week highs. A logical entry there could be a touch of its still upward sloping 200 day SMA which would still be making higher highs and lows. Sure it still rests about 7% from that level, not a move that would be out of the ordinary in this market climate.

Special Situations:

The old saying goes anything good takes time, and the same can be true when it comes to charting. As we have been witnessing in 2018 wide and loose trade can be typical of topping action, and the opposite can be said about bottoming traits. It is a process that is gradual and smooth. Below is the chart of RPM and how it appeared in our Monday 6/25 Game Plan. For the last 2 years it has basically traded within a range between 46-56, and last week cleared those confines in brilliant fashion. It recorded its first double digit weekly gain in more than 5 years rising 12.6% that was accompanied in the strongest weekly volume in that timespan as well. News from Elliott management were responsible for the advance. It has now reached its measured move from a bullish inverse head and shoulders breakout, but selling completely here could prevent longer term shareholders from reaping big rewards by exiting a long position to soon.

Acting well POST break above 30.99 cup base trigger in a very long base that began week ending 10/16/15. NVCR is a healthcare play higher by 60% YTD and 83% over the last one year period. Earnings have been mostly higher with advances of 9.7, 1.7, 6 and 3.6% on 4/26, 10/26, 7/27 and 4/27/17 and a loss of 4.4% on 2/22 (REPORTS 7/27 before the open). The stock is higher 10 of the last 12 weeks, and the two down weeks both CLOSED in the upper half of their weekly range. It is looking for its 7th consecutive weekly CLOSE above the round 30 number and is digesting a big 5 week winning streak the weeks ending between 4/13-5/11 which rose nearly 44%. Enter NVCR here after a break above a bull flag trigger of 32 and the break carries a measured move to round 40 number.

Trigger NVCR here.  Stop 29.75.

Abundance of IPOs becoming concerning as June '18 was the busiest month in the last 3 years? PVTL is a software new issue that is now off 23% from most recent 52 week highs. It has just one earnings release so far and it was a beauty higher by 33% on 6/13. The stock rose 8 of its first 9 weeks trading, with the most significant move being the combined 53% move the weeks ending 6/8-15, not a typo. It has acted well POST breakout from a short cup base trigger of 19.72, taken out on 6/6 that rose more than 10% on double average daily volume. The last 2 weeks have been lower, but look to enter PVTL near a gap fill at 22.75 from the 6/12 session which would align with support in a bullish falling wedge too.

Trigger PVTL 22.75.  Stop 20.35.

Add to this name above a long cup base trigger of 58.90 in pattern that began week ending 12/21/17. ROKU is a streaming play lower by 12% YTD and now sits 23% off its most recent 52 week highs. Earnings have been in short supply with back to back losses of 1.7 and 17.7% on 5/10 and 2/22 and a huge gain of 55% on 11/9/17. The stock has advanced 9 of the last 13 weeks and is up another robust 6.8% this week so far. It put up an enormous run gaining more than 120% during a 7 week winning streak ending between 11/3-12/15/17 and the round numbers have played a role recently. The 30 figure was great support on 4/4 registering a bullish engulfing candle and the 40 number was support in a handle on a current cup base. Enter ROKU with break above 47.74 cup with handle trigger.

Trigger ROKU 47.74.  Stop 44.

Sits 12% off most recent 52 week highs and has not touched its 200 day SMA in years. NVDA is a semiconductor giant higher by 22% YTD and 70% over the last one year period and sports a small dividend yield of .2%. Earnings have been mixed with gains of 6.7 and 5.3% on 2/9 and 11/10 and losses of 2.1 and 5.3% on 5/11 and 8/11/17. The stock is lower the last 2 weeks by a combined 11% with both CLOSING at the bottom of their weekly range, and it is not making much of a dent in the decline higher by just two pennies this week so far (to put it in perspective it has recorded just one 3 week losing streak in the last 16 months). Short NVDA with a sell stop below a bear flag trigger of 235 which carries a measured move to 205.

Trigger NVDA 235.  Buy stop 245.

Flirting with February correction lows and a break below offers add on short entry. CBOE is a financial laggard lower by 18% YTD and higher by 11% over the last one year period and sports a dividend yield of 1.1%. Earnings momentum is negative with FOUR consecutive declines, albeit modest ones, falling 2.8, 3.6, .9 and 1.6% on 5/4, 2/9, 11/7 and 8/4. The stock is lower 14 of the last 22 weeks and this week by another 1.6% so far and now trades 26% off most recent 52 week highs (it gained a very impressive 49 of 65 weeks ending between 11/4/16-1/26/18 more than doubling in the process). Short CBOE here as it continues to struggle at a downward sloping 50 day SMA which has been pesky resistance since early March.

Trigger CBOE here.  Buy stop 106.

Good luck.

Trigger summaries:

Buy after recent break above bull flag trigger NVCR here.  Stop 29.75.

Buy push lower into gap fill PVTL 22.75.  Stop 20.35.

Buy stop above cup with handle ROKU 47.74.  Stop 44.

Sell stop to short below bear flag NVDA 235.  Buy stop 245.

Short into persistent downward sloping 50 day SMA CBOE here.  Buy stop 106.

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Markets:

  • The Dow appears to be losing a battle with its 200 day SMA as it has CLOSED below the line the last 5 days. It is now nearing correction mode off 9% from most recent 52 week highs, and is looking at a potential FOURTH weekly loss in a row, a feat not accomplished in 26 months. Just prior to the 9.3% drop the weeks ending 2/2-9, it advanced a very impressive 17 of 20 weeks between the weeks ending 9/15/17-1/26. A peek at its weekly chart shows just how taut trade was during those 20 weeks, anything but what we have seen for the majority of 2018.
  • The Nasdaq recorded a bearish piercing line candle Tuesday, and it has also registered two bearish engulfing candles in the last 9 days, one at all time highs from 6/21. We have repeatedly stressed that its success hinges a great deal on the action in AAPL, its largest component, and today it too recorded a bearish engulfing candle. It is clinging to its 50 day SMA here, but the successful retest of the double bottom breakout trigger of 179.04 taken out on 5/4 now has the look of a bear flag. A break below 182.50 carries a measured move of more than 12 handle. Volume trends have been poor with the last significant advance in above average volume coming exactly 2 months ago.
  • The best looking market to me continues to be the Russell 2000, which has witnessed two bullish hammers the last 4 sessions off rising 50 day SMA support. Remember names in this benchmark are somewhat insulated from the ongoing tariff talks as companies within derive the vast majority of their revenues domestically. Its strength has to be even more respected when one factors in its greatest weighting is the financials, nearly 18%, which have been dismal performers at best. 

Sectors:

  • Ongoing concerns in the financial space show no signs of abating as the XLF fell .9% on Tuesday. The ETF recently registered a bearish death cross and has now CLOSED nine straight sessions below its 200 day SMA, as the fourth time touching that secular line since 4/2 proved fatal. The group is diverse, and many names have seen alarming moves as BLK broke below a bearish descending triangle whose trigger aligned with the very round 500 number. IBKR is looking at a potential sixth consecutive weekly loss down 1.6% so far this week, and has lost ground 27 of the last 36 sessions after failing to break above a bull flag at the round 80 number in early May. NOAH is now 32% off its most recent 52 week highs and has slumped 9.3% this week already, after the prior three declined more than 21%.
  • The only sector that fell greater than the financials today was the group bulls did not want to see. Technology slipped 1.2% via the XLK as the ETF is having a tough time with the round 70 number, as it has recorded just one CLOSE above in the last 7 sessions, with 6 of those above 70 intraday. Its failure to see any follow through above a cup with handle breakout from a 70.52 trigger on 6/1 is a red flag, as we know the best breakouts tend to work out right away. Some notable moves in this group come from MU which is now remarkably in bear market territory lower by 20% from most recent 52 week highs. A logical entry there could be a touch of its still upward sloping 200 day SMA which would still be making higher highs and lows. Sure it still rests about 7% from that level, not a move that would be out of the ordinary in this market climate.

Special Situations:

The old saying goes anything good takes time, and the same can be true when it comes to charting. As we have been witnessing in 2018 wide and loose trade can be typical of topping action, and the opposite can be said about bottoming traits. It is a process that is gradual and smooth. Below is the chart of RPM and how it appeared in our Monday 6/25 Game Plan. For the last 2 years it has basically traded within a range between 46-56, and last week cleared those confines in brilliant fashion. It recorded its first double digit weekly gain in more than 5 years rising 12.6% that was accompanied in the strongest weekly volume in that timespan as well. News from Elliott management were responsible for the advance. It has now reached its measured move from a bullish inverse head and shoulders breakout, but selling completely here could prevent longer term shareholders from reaping big rewards by exiting a long position to soon.

Acting well POST break above 30.99 cup base trigger in a very long base that began week ending 10/16/15. NVCR is a healthcare play higher by 60% YTD and 83% over the last one year period. Earnings have been mostly higher with advances of 9.7, 1.7, 6 and 3.6% on 4/26, 10/26, 7/27 and 4/27/17 and a loss of 4.4% on 2/22 (REPORTS 7/27 before the open). The stock is higher 10 of the last 12 weeks, and the two down weeks both CLOSED in the upper half of their weekly range. It is looking for its 7th consecutive weekly CLOSE above the round 30 number and is digesting a big 5 week winning streak the weeks ending between 4/13-5/11 which rose nearly 44%. Enter NVCR here after a break above a bull flag trigger of 32 and the break carries a measured move to round 40 number.

Trigger NVCR here.  Stop 29.75.

Abundance of IPOs becoming concerning as June '18 was the busiest month in the last 3 years? PVTL is a software new issue that is now off 23% from most recent 52 week highs. It has just one earnings release so far and it was a beauty higher by 33% on 6/13. The stock rose 8 of its first 9 weeks trading, with the most significant move being the combined 53% move the weeks ending 6/8-15, not a typo. It has acted well POST breakout from a short cup base trigger of 19.72, taken out on 6/6 that rose more than 10% on double average daily volume. The last 2 weeks have been lower, but look to enter PVTL near a gap fill at 22.75 from the 6/12 session which would align with support in a bullish falling wedge too.

Trigger PVTL 22.75.  Stop 20.35.

Add to this name above a long cup base trigger of 58.90 in pattern that began week ending 12/21/17. ROKU is a streaming play lower by 12% YTD and now sits 23% off its most recent 52 week highs. Earnings have been in short supply with back to back losses of 1.7 and 17.7% on 5/10 and 2/22 and a huge gain of 55% on 11/9/17. The stock has advanced 9 of the last 13 weeks and is up another robust 6.8% this week so far. It put up an enormous run gaining more than 120% during a 7 week winning streak ending between 11/3-12/15/17 and the round numbers have played a role recently. The 30 figure was great support on 4/4 registering a bullish engulfing candle and the 40 number was support in a handle on a current cup base. Enter ROKU with break above 47.74 cup with handle trigger.

Trigger ROKU 47.74.  Stop 44.

Sits 12% off most recent 52 week highs and has not touched its 200 day SMA in years. NVDA is a semiconductor giant higher by 22% YTD and 70% over the last one year period and sports a small dividend yield of .2%. Earnings have been mixed with gains of 6.7 and 5.3% on 2/9 and 11/10 and losses of 2.1 and 5.3% on 5/11 and 8/11/17. The stock is lower the last 2 weeks by a combined 11% with both CLOSING at the bottom of their weekly range, and it is not making much of a dent in the decline higher by just two pennies this week so far (to put it in perspective it has recorded just one 3 week losing streak in the last 16 months). Short NVDA with a sell stop below a bear flag trigger of 235 which carries a measured move to 205.

Trigger NVDA 235.  Buy stop 245.

Flirting with February correction lows and a break below offers add on short entry. CBOE is a financial laggard lower by 18% YTD and higher by 11% over the last one year period and sports a dividend yield of 1.1%. Earnings momentum is negative with FOUR consecutive declines, albeit modest ones, falling 2.8, 3.6, .9 and 1.6% on 5/4, 2/9, 11/7 and 8/4. The stock is lower 14 of the last 22 weeks and this week by another 1.6% so far and now trades 26% off most recent 52 week highs (it gained a very impressive 49 of 65 weeks ending between 11/4/16-1/26/18 more than doubling in the process). Short CBOE here as it continues to struggle at a downward sloping 50 day SMA which has been pesky resistance since early March.

Trigger CBOE here.  Buy stop 106.

Good luck.

Trigger summaries:

Buy after recent break above bull flag trigger NVCR here.  Stop 29.75.

Buy push lower into gap fill PVTL 22.75.  Stop 20.35.

Buy stop above cup with handle ROKU 47.74.  Stop 44.

Sell stop to short below bear flag NVDA 235.  Buy stop 245.

Short into persistent downward sloping 50 day SMA CBOE here.  Buy stop 106.