Dispersion & Correlation
The TSF - Focus Stocks Will Be Sent Out Tonight
To all paid subscribers — with the best setups and opportunities going into this week, complete with methods on how to catch them.
Don’t Miss The Leaders Post
Running through how some of the leading stocks behaved as they bottomed and turned.
Incredible moves can be captured if you know what to look for in corrections.
And I Highly Recommend Our Relative Strength Post
This is one of the most important piece among our educational posts. Because it will teach you how to recognize and interpret relative strength correctly — and that is the easiest way to find the next leading stocks.
It is not a coincidence that we highlighted every new leading stock coming out of this correction, before they made their 100%+ moves — the signs were there if you know what to look for.
Time For The Robots
The robotics theme is seriously heating up. The broad sector doesn’t stand out, but select robotics facilitators, chip and sensor producers are exploding.
If you have access to TSF - Analytics, I recommend you check out the robotics theme — the list is complete fire, filled with setups.
And I want to encourage all subs to highlight interesting stocks to add to the platform, the more eyes the better the finds — use the channel on discord and I will add what you find.
Platform is filled with around 4000 stocks at the moment.
And VELO Is Leading The Pack
And VELO is a combined robotics enabler as well as space theme stock. That doesn’t hurt, we had a nice setup in it recently.
If You Followed The Setup — You Are Up 50% In Days
Move is just starting, but VELO is hard to handle, make sure to give it room. We will stalk it for the next entry from here — its coming.
The First Pullback After ATH Is Almost Always Buyable
And this was our base case coming into last week.
But we remain at ATH resistance and our job today is to assess the market conditions carefully, in search of red flags — to be able to be positioned correctly in the time ahead.
This analysis is long, we will walk through market internals, smart money and options positioning, current structure and much more.
Grab a coffee and enjoy the read.
Explore TSF - Analytics
First — The Schedule
Since Monday is closed for Memorial Day, we will shuffle the schedule this week. I will use the time to catch up on some work with the platform, I am still going through all stock lists one more time, to correct eventual mistakes, add some stocks and remove dead/low liquidity stocks.
TSF - focus stocks will hopefully be delivered later today, otherwise early tomorrow.
And we will likely do a Wednesday and Friday post instead of the usual schedule to adapt to the shortened week.
Lets Start With Zooming Out — S&P 500
A historic 8 week green streak, and I can see nothing bearish with this chart. Interestingly volume is picking up as well. Remember when everybody were complaining about the low volume on the start of the rally — and back then I told you that’s how stable healthy markets often trend.
Look back yourself, this is what traps most bears and what makes people not believe in a rally.
The only thing of concern is that we are very extended from the weekly 10 SMA, pause and chop is very likely.
But history says we go higher eventually, after a streak like this.
Range Forming — S&P 500
This is what we thought would happen last week.
And Here We Are
We are above all significant moving averages and the bullish thesis is in full focus
We reclaimed the 10 SMA after losing it briefly — buyers defended where they should
We are still extended from EMA 21 and have not touched it in a historic amount of time — that test is coming soon, it is inevitable
We can test it by consolidating in time or decline from here
Sellers emerged prior to the previous top the natural path from here would be a test down to attract new buyers
But we have some weekend news that might cause us to gap up — but much can change until Tuesday
Overall structure is still supportive of the bulls, but if we can’t push higher soon, chop and weakness is likely — the call wall at 7500 is a key level that if punched through can unlock more upside
The cycle of bear traps will continue, the scarier the weakness the more bears we trap — I expect the next dip to be bought up as well, but it would not surprised if we get a pretty aggressive shakeout to shorten up the time until EMA 21 is tested in the weeks ahead
It is important to not dive in on the first weakness — focus on key significant levels in stocks and avoid buying extended stocks when the market is extended — it’s a losing strategy in the long run.
There are always outlier stocks that hold up, but generally be careful buying extended stocks when market is extended.