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Some Tickers Are Running Out of Steam

Hey Market Pilots,

It has been several weeks since the names I traded with great rewards ran out of steam and all pulled back 30-60%. These names are in the process of bottoming, but it sure is taking time so I need to do more scanning and looking around to find the group of tickers which are having success. 

We know that certain groups and sectors are hot, while others are dormant or declining. The goal is to find where these sectors are at the beginning of the rotation into them or at least the beginning of the next wave up for their trend. Currently, the high beta names which were cruising from November to February have all hit a brick wall, perhaps a rising interest rate brick wall. But nonetheless, they haven’t started their next move up. 

This is where we start breaking out the scanners to figure out where the bullish names are since the indexes are doing well. Within this, however, timing is critical. Yes, the indexes are doing well, but maybe too well right now? I’d say so. The SPY is outside its upper boundaries and the last time we saw it in this position was 9/2/20 and there was a massive pullback after it went that high.

The QQQ is at its previous all-time high forming a double top, which also looks like the cup portion of a cup-with-handle pattern. Therefore, if the pattern is going to play out, we need to see the QQQ flag or pull back over a few days which would form the handle portion.

I don’t think we are going to get the same kind of extended drop like what came after 9/2/20, but I do think some sort of pullback is due. So let’s look for the SPY and the QQQ to pull back to some support on the daily or hourly time frames, and then we find which names in some other sectors might be ripe to go purchase.

Your Profit Pilot, TG.

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