The Sentiment Cycle

The Setup Factory

Aug 02, 2026

∙ Paid

What TSF Is

A swing-trading resource that saves you time — analyzing the market and surfacing interesting opportunities and setups.
Trading education to help you build your own methodology, process, and risk-management & execution framework around sound principles.
A community with 400+ members, with a private Discord.
The TSF Analytics platform — thesetupfactory.com

What TSF Is Not

A trade-alert service. I share all of my own trades, but those are my personal trades and journaled thoughts — never a recommendation to buy or sell anything, nor is it financial advice.
Signals to act on. The setups aren’t recommendations either. Every setup has to trigger to become valid; I only share my own views on the setups and the stocks I discuss.

Before We Start — Lets Talk About Assessing The Quality Of Setups

Because every cycle the same thing happens. We have good times with setups proliferating.

Then weakness starts creeping into the system, we start seeing failed breakouts, chop and distribution bars.

And the amount of setups in growth diminishes, usually rapidly.

And here is the issue that must be remembered into every cycle. Since we all are habitual overtraders, it can be tough to objectively assess the quality of setups when things start to deteriorate.

And when very few good setups are there, it can be easy to fool yourself into classifying a crappy setup as good.

And this matters, because it is a part of our situational awareness framework — understanding when price action changes before things really crash.

And I highlighted this before semis really topped when looking at AMD. Everybody were drooling about it’s relative strength.

However sometimes relative strength is a trap.

RS doesn’t supersede setup quality.

Because the price action is the evidence of demand in firm control.

When price action isn’t confirming that, RS can be temporary, and you might be looking at the last man standing

Same Thing Is Happening Again With DELL

Broadening formations are generally bearish, and enough for me to never touch a stock broadening unless the price action changes and it breaks out decisively.

Yet most are still anchored to DELL, but it’s simply not a good setup even though RS has been good. That can change, and my opinion will then change — but looking at it now, RS is not a buy signal.

BE Is A Good Example Of A Broadening Base Failing

Nerdy nuances perhaps, but nuances that matter and will save a lot of pain. And what fools most is that the up moves can be very convincing and powerful, but assessing the prior price action before that burst, is what will give you clues if the trend can persist.

I focus on A+ setups, because most of our trades are usually unnecessary, simply by reducing activity and focusing on the fat pitches — performance can improve incredibly.