We’ve laid out our broader market thesis over the past few weeks and are now turning our attention to individual target entries. Identifying broader market levels first was an important step as the market is reacting to these levels. We noticed that Goldman Sachs published something similar today.
If the market breaks 2340, we will likely see the market trade down in the 2100 region. This is the primary target that we diligently identified over the past few weeks.
We mentioned that Knox follows an analyst who uses the same discipline and is calling for 1800. However, at some point, we have to be satisfied and not time the bottom. This is a personal choice.
Our positions will be 70% built in the target entries we are publishing this week. We will keep 30% on hand to either allocate at another leg lower or when we see a renewed uptrend.
Please note: We do expect there to be corrective bounce(s), which is the fourth of five waves in this C-wave down. The momentum indicators are at unusually low levels. They will need to reset for the next leg lower. What this means is some investors might get bullish too early from seeing some green on the indexes. Until the VIX settles below 20 and we see normal days (i.e. 100 bps to 500 bps), it’s unlikely that a bottom is in place.
Target Entries:
The market is moving fast and we want to get information out to you as quickly as possible. We will be updating target entries for (3) stocks per day from our Top Stocks list in column J of the spreadsheet.
You can access the Top Stocks List here.You can access the Top Stocks List here.
Please check the Top Stocks list for daily updates on our target entries. Today we updated target entries (column J) for Roku, The Trade Desk and Slack.
Here are some bullet points about these target entries:
- Column J will not change as it’s based on the broader market thesis that we have worked diligently towards building over 2-3 weeks.
- Our game plan is outlined in Column K to help provide additional information into the technicals we are monitoring for entry.
- Knox will be posting charts and additional TA on the forum for anyone who has questions or wants more TA information.
- We will do a summary of the target entries this weekend.
- We don’t want to overwhelm your inbox with blog updates while also getting the information out asap – therefore, please check for daily updates on the spreadsheet.
Top Stocks List:
We will be updating this monthly around the first of the month. Our convictions on the fundamentals have not changed. The only stock we foresee adding right now is AMD. We are evaluating other semiconductors and will update you accordingly. Docusign (on our watch list) is also a potential. Notably, Beth is not ready to initiate on Micron as the memory market is looking sluggish this year. Those earnings are coming up soon. If this changes after earnings, we will let you know.
You’ll get the AMD PDF report tomorrow.
We do understand that there was a bigger seller in Roku today. This does not change our conviction.
Thank you for your readership!