Last few sessions we have seen continuing strength and many names doing well but we started to become extended per my gut om the 25th of may and since than have grown more extended , I am long TQQQ, ELF , BRBR, WGMI , SMH and BOTZ and 3 of these names have recently put in what I refer to as UCB's or "upper channel breaks".
Typically there is a 75% chance with UCBs that we will see price re enter the channel and visit channels lower trend line within 5 bars on highest visible timeframe UCB is seen on , in this case it's the weekly , so there is good odds , statistically speaking here , that within a 5 week period we will revisit the channels lower trend line .
Having said that we are seeing a new bull market form and there is always the 25% chance that the UCB is successful , maybe it is a slightly higher probability at this time that the UCB works because it could be an earlier move in a larger theme up.
Besides all the UCB's we see happening on key groups and names , I also like to watch the percent from 10 ema vs price and usually since I have a dedicated strat for TQQQ I keep an eye out for 10% or greater distance from 10 ema to price and have come to expect pullbacks around this area or at least some consolidations ,yesterday we closed above this 10% threshold from ema getting us into the extended area and today we opened 12.9% above and have since declined back to the 10% area .
Even if the UCB holds Mr Market needs some sleep and rest , maybe a visit to the Scandinavian spa to steam out and have some hot cold treatments ♨️.
I am attaching some pics here of some of the UCBs occuring now I am watching and or long a few previously noted . I am personally fully de risked on many of them though with half of the positions open on SMH/BOTZ and 2/3rds on TQQQ. Although tempting to just take profits now , knowing the odds with UCBs my system is not set up for that so I am going to more or less not worry about the UCBs but I will expect and hope for some needed rest for things .
One other thing , I also track the net trading positions of IG traders and COT futures data and without going to deep into this part , I will say , in the past week we have seen a big change in sentiment and names or indices that were extremely net short since Nov 2022 have just switched to either 50/50 balance or some even net long , although SPY has held out ( net short ) . But huge shift there worth noting, the shorts were very helpful to get the market up but I think that since things are switching over closer to net long or 50/50 , that we might crowing to the long side now or starting to.
I am contrarian with these things so with the UCBs and the change in Net shorts closer to net long basis , I think this adds to probability of a reasonable pullback likely here . But make no mistake , we have come leaps and bounds since Oct 2022 and we are in a stage two uptrend , any pullback helps to distinguish names and groups with good RS and create good risk reward opportunities ( potentially) .
Typically there is a 75% chance with UCBs that we will see price re enter the channel and visit channels lower trend line within 5 bars on highest visible timeframe UCB is seen on , in this case it's the weekly , so there is good odds , statistically speaking here , that within a 5 week period we will revisit the channels lower trend line .
Having said that we are seeing a new bull market form and there is always the 25% chance that the UCB is successful , maybe it is a slightly higher probability at this time that the UCB works because it could be an earlier move in a larger theme up.
Besides all the UCB's we see happening on key groups and names , I also like to watch the percent from 10 ema vs price and usually since I have a dedicated strat for TQQQ I keep an eye out for 10% or greater distance from 10 ema to price and have come to expect pullbacks around this area or at least some consolidations ,yesterday we closed above this 10% threshold from ema getting us into the extended area and today we opened 12.9% above and have since declined back to the 10% area .
Even if the UCB holds Mr Market needs some sleep and rest , maybe a visit to the Scandinavian spa to steam out and have some hot cold treatments ♨️.
I am attaching some pics here of some of the UCBs occuring now I am watching and or long a few previously noted . I am personally fully de risked on many of them though with half of the positions open on SMH/BOTZ and 2/3rds on TQQQ. Although tempting to just take profits now , knowing the odds with UCBs my system is not set up for that so I am going to more or less not worry about the UCBs but I will expect and hope for some needed rest for things .
One other thing , I also track the net trading positions of IG traders and COT futures data and without going to deep into this part , I will say , in the past week we have seen a big change in sentiment and names or indices that were extremely net short since Nov 2022 have just switched to either 50/50 balance or some even net long , although SPY has held out ( net short ) . But huge shift there worth noting, the shorts were very helpful to get the market up but I think that since things are switching over closer to net long or 50/50 , that we might crowing to the long side now or starting to.
I am contrarian with these things so with the UCBs and the change in Net shorts closer to net long basis , I think this adds to probability of a reasonable pullback likely here . But make no mistake , we have come leaps and bounds since Oct 2022 and we are in a stage two uptrend , any pullback helps to distinguish names and groups with good RS and create good risk reward opportunities ( potentially) .
Comment:
BOTZ - not a UCB , but extended .
BOTZ - not a UCB , but extended .
Comment:
SMCI - Massive moves , related to SMH , rest needed eventually
SMCI - Massive moves , related to SMH , rest needed eventually
Comment:
WGMI , is a but of a laggard ( im long ) but I think that it looks like it could be building a little cup and working at the right side now , its not extended .
LW waiting in the bushes for the go ahead
XLC Missed the last entry due to risk constraints unfortunately but its hugging moving averages a bit better than SMH/QQQ
XHB - This looks like it could be setting up , bears see a double top on daily and short set up potnetial , that's good, someones gotta be wrong , stage 2 . DHI , related stock that might be making moves soon ...
LW waiting in the bushes for the go ahead
XLC Missed the last entry due to risk constraints unfortunately but its hugging moving averages a bit better than SMH/QQQ
XHB - This looks like it could be setting up , bears see a double top on daily and short set up potnetial , that's good, someones gotta be wrong , stage 2 . DHI , related stock that might be making moves soon ...
Comment:
Also want to note that although QQQ/TQQQ have UCBs out , SPY is weaker and does not look at all the same , I think maybe a potential scenario would be for QQQ to rest and pullback a bit and SPY catch up , especially since SPY had remained more stubbornly net short.
Also want to note that although QQQ/TQQQ have UCBs out , SPY is weaker and does not look at all the same , I think maybe a potential scenario would be for QQQ to rest and pullback a bit and SPY catch up , especially since SPY had remained more stubbornly net short.
Comment:
Net short levels for france 40 vs IG traders actual trading . ( about 300 K people )
I track several names this way but this is a great example of how much the short bets have changed in the past week or so from 80's to 50's (%).
Net short levels for france 40 vs IG traders actual trading . ( about 300 K people )
I track several names this way but this is a great example of how much the short bets have changed in the past week or so from 80's to 50's (%).
Comment:
SPY COT ( commitments of traders futures positioning data ) and IG traders have remained net short on SPY but france 40 / Dow / German 40 and 👣SE 100 have all had short levels extremely reduced very quickly in past few weeks . They were aggressively short since Nov 2022 . So a shift worth noting and also wouldn't be a horrible bet to expect those names to settle down / rest and since SPY is net short still let that one outperform for a bit maybe .... just a thought
Comment:
Correction made a mistake before saying there were 3 UCB's in those names I am long ( only 2 ) TQQQ and SMH . ELF had a UCB but was a successful one and that was a while back ( prior earnings )
艾力克~
SMH , UCB