I have heard some talking heads mention rotation more and more. I posted my Simon Sez buys in sector ETFS: XLB, XLI, XLF, XLU and the XLE I did not buy. Do those SS3 signals support a rotation theory? FYI, they are mostly down today while NVDA and related AI is up. Hmmm.
Every now and then compare the equal weighted indexes to their primary index. RSP vs SPY, QQEW vs QQQQ and look for a broadening out. Right now they don’t seem to be show much of that.
In my opinion Pete it is a little harder to find sector rotation with SS. I would think if you went through all the sectors though you should be able to see which ones are topping out and which ones are starting to go up.
With IBD you can pull up the 197industry Groups and they give you the stats on what is number 1 and so on then what they were last week 3 month and 6 month. Easier to see how things are moving. I noticed transportation has made a big move up to 5.
Andy
Decisiveness or conviction is one of my weaknesses. My plan was to hold NVDA until it tested 21dma support, then if it held, buy more. At 11:30 it seemed clear it successfully held, but I did not add. Finaly, just now I added a small amount. That was a poor decision because it was at least 6% up for the day. Just thought I would let you know that this is not the best approach to success. We must know and somehow overcome our weaknesses. This will go in my post-analysis section for improvement.
To rationalize, I can sayto myself what I told @Carpian: know your stop and the loss you will realize when it gets there. For me, it will be the 21dma. If it breaks that, then I will sell more than I just bought (e.g. some of my existing). I also rationalize this sub-optimal behavior with the fact that this was a small add for me.
I am not Quill, don’t think anything I say is magic or wise.
Pete
#MELI chart
MELI has been living around the 50dma for a bit and mostly staying above it. Today it had a 3.75% move up off the 50dma. Volume was higher than during yesterday’s decline but lower than average. You can see MELI formed a Stage 1 cup with handle but had a very low volume breakout that did not justify buying. It had a correction after that should have shaken out all buyers at the pivot point and above. But this could be a fresh start. IBD says this…
" MercadoLibre bounced 3.75% to 1,642.28, rebounding from the 50-day line, retaking the 21-day line and breaking the downslope of a long handle. That offered an early entry, or perhaps a place to start a position. MELI stock has a 1,792.05 cup-with-handle buy point. The Latin American e-commerce and payments giant is growing strongly. But while MELI stock has gone on strong runs, it’s struggled since mid-February."
I don’t know the difference between and early buy and starting a position, but I have always liked MELI and am inclined to start a small position. I would add small on other opportunities while it is building the right side. My expectation is that it will not go below the 50dma after this positive move and if I am wrong, I need to sell. (Which would be about a 3.5% loss on a portion of a normal holding)
I will want to finally ditch SIMO, a loser in my portfolio, and put some of the funds here (even though I have enough cash to hold both).
#DECK (Deckers, maker of Uggs and Hoka shoes). I went to the dentist today and noticed the hygienist wearingOnOn shoes. I had seen others medical offices with OnOn and Hoka on the feet. We chatted and she said the medical community loves both because they are very comfortable and supportive if you are stand all day. (This is Peter-Lynch like research. )
This caused me to re-look at Deckers and OnOn. DECK is an interesting study and I am not sure what to do with it. Nothing at the moment. I have a note from Webber in the chart, and he does say he is looking for it to break the downtrend and they he would likely buy (he is more of a swing trader). I could also see it resting a bit and the 50dma catching, then a jump up from that would be a buy signal.
Just waiting like a little spider.
#ELF has strong IBD growth rankings and had a nice gap up above the 50dma after earnings report (that was an early buy point). The right side of base has been ok. It had a breakout 5 days ago but vol only 13% above normal. But, the last 3 down days during the NVDA slide were modest and only took it down to the original buy point. If price is good tomorrow, I will add to it in my Saul account.
Some additional charts for IBD position traders to review using only IBD rules 
META: cup with handle, price just broke the downtrend of the handle but is below the pivot point. IBD team says that can be an early buy point. They also point out volume has been week and Accumulation/Distribution has been poor.
CCL: nice breakout. +281% volume.
VSEC: +64% vol on reentry of the buy zone today.
ARM: still building a valid base.
Bought Amzn at $191.92 it was breaking out past it’s buy point of $191.70. Went in with a 1/4 position and 5 percent stop ($182.32). A lot of trades are failing now and trying to bring down my positions and going to tighter stops to see if I can find what is working. I set my stops in my account now to make sure when I hit that point it sells. I am also not buying any early buy points. I want to tighten up my process so I am only buying when the stock breaks out of the base.
Andy
Hey Pete look at this Alkt is popping it’s head back over the pivot line. This looks like it is a consolidation pattern and is why we keep getting kicked out. I want to see alot of volume before I decide to go back in.
Andy
Andy, AMZN looks very good and I just piggy-backed on it. Thanks.
If your buys are not working, going smaller is the right thing to do. Look for stocks with high RS and COMP of 90 or higher, maybe 95 or higher.
RE: Stops. Stops are always tricky and you can get shaken out on what turns out to be an upside reversal off support. But no issue with being safe, just do you post analysis on any stops that hit. Some IBD guests and team members try to wait until the end of the week to make a decision that is not the 7-8% rule.
RE: Early buys: I am for them and did some today. I keep them small so it is easier to ride out fluctuations. I will sometimes make small adds as the right side of the base builds. Then if it has a proper breakout, I can finish off the position early. Again, keep doing post analysis and she if there is a pattern to success and failure, including your psychology. I try to evaluate myself as I put each buy note into my power point slide, like “I have a bias toward MELI and I was willing to take an early buy, but if I didn’t know the stock, I think I might have passed”. Then I have that thought I can go back and evaluate.
Pete
I made the following moves today
I did more trading than usual, wonder why. Glad to free up SIMO money for what I expect to be better trades. Plan for breakout buys is to hold out until a 7-8% loss, or add when it proves strength. For small, early buys, I might have trendlines “stops” or less strict sell rules due to position sizing.
Pete, who is always willing to receive feedback about what he is actually doing.
Pete that is the thing. I have done post analysis and I am seeing almost everything fail. It just started within the last week on this rotation. What I have found out is that when I get in early it hasn’t been hitting the correct pivot point before pulling back. Also all of these have been smaller cap companies. So the market is getting very choppy. I put the trade on Amzn because I am thinking what might be working is the large caps. If that works well I might start going into them.
I noticed your Cava is doing very well so congratulations.
Edit: Oh Another thing Pete. The reason I am not going to take secondary pivot points or early entries is because I want to focus on getting the correct patterns down first. I think I have been sloppy and if I enter the trade with the right entry points I am hoping the outcome will be better. But until I start getting more successful trades I am going to keep them smaller with tight stops.
Andy
Andy, all rational. The market is a bit choppy and extended now, so more care is warranted. Do you use any screens to find candidates? the W.O.N screen finds stocks that meet all of Bill’s 9 criteria for many past long term winners. Jim Ropel says he only considers stocks with a COMP rating of 95 or higher. Things like that can keep in in quality. Sometimes I don’t demand enough volume on a breakout.
In your early buys, what was your trigger? A jump above 50dma, 21dma? Gap up on earnings? Breaking a downward trendline.
Hi Pete, I was a little sloppy on how I was buying that is why I am trying to get more precise. But I was buying on the tight, all the patterns but was either getting in to early on the pivot or a little to late after the pivot. Then SRPT I bought that thinking it was breaking out. So that is why I am going back to the fundamentals. Like today When I bought Amzn I was basically on the Pivot, The pivot was $191.70 and I bought at $191.92. I also set my stop, and I put it on my account at 5% ($157.74). It’s funny I thought SRPT was going to take off and look it came back in also. That is happening alot Pete and it is just a recent phenomenon. So the market has changed and I am just trying to figure it out.
This is a 3 year old video with Mark Minervini but very good if anyone cares to watch.
Andy
I should have answered this Pete. I like to use the Breakout, near pivot and RS blue line during the week and then on the weekends I use the Marketsurge growth 250 and the Mark Minervini Trend line , he has 3 screens. I also have a screen I made up that searches for the highest EPS, Sales and RS line. Also another that does a search on the top stocks in the top sectors.
Andy
IBD is confirming your experience…
Another issue for the stock market is the paucity of breakouts among high-rated stocks. In the MarketSurge 250 index, fewer than a dozen stocks topped buy points the past two weeks. And most of those breakouts are lackluster.
EDIT: IBD is keeping its recommended stock market exposure at 80% to 100%. Because there’s no new blood coming into the market leadership — i.e., little in the way of new breakouts — a proper target is closer to 80%. In other words, many leaders are worth holding, but it’s hard to add new stocks.
Isn’t that amazing that Marketsurge picked up on that. Trade small trade tight.
Andy
Bought a 1/4 position in Nabl as it went above the $15.44 buypoint. I bought at $15.47 and added a stop at $14.69 for 5% loss. Nabl has been coming up very strongly on the right side of the base.
Andy
Medp just came out of a base but on low volume. You don’t want to touch a stock coming out of a base on low volume. Your chances of getting a winner are a lot less.
Andy
