Buckle Up for the Fed
This Weekly Compass correctly anticipated bullish moves in individual securities last week based on the high probability setups listed, the bullish moved were significant: $Meta Platforms, Inc.(META)$ jumped +3.9%, $Tesla Motors(TSLA)$ surged +5.8%, $VanEck Semiconductor ETF(SMH)$ rallied +3.5%, $iShares Silver Trust(SLV)$ gained +3.4%, $Costco(COST)$ reached its bullish target of $924 and retraced, same case for $Amazon.com(AMZN)$ that touched the bullish target $236 and reversed; in the case of $iShares Russell 2000 ETF(IWM)$ $253 the price also neared the bullish target for a decent +1.0% move.
The purpose of working with a permanent watchlist like the one I have is to find the best individual setups when the major indices are in consolidation as it happened this week, something that was also considered a week ago in the previous Weekly Compass for the $S&P 500(.SPX)$ and $NASDAQ 100(NDX)$ .
We will study today the high probability setups for the week ahead using the momentum map and the individual technical analysis for each security, so you see the list of my top picks.
The Momentum Map helps analyze the stage each security is currently in, as the moves are generally circular, which the securities zoomed in today demonstrate.
$Eli Lilly(LLY)$ and ETHEREUM are clear examples of how a security moves among the quadrants. Just three months ago, the crypto market was in euphoria, and today the price action is struggling to find a bottom. In the same vein, the mega cap pharma company LLY was trying to find support three months ago, and the rally recently observed has been stronger than that of many popular tech companies.
My bullish view on $Apple(AAPL)$ months ago was initially related to the Momentum Map and then the technical setup, as was the case with $Wal-Mart(WMT)$ . Upgrade your subscription to see the full picture. Always remember that a leading stock (green quadrant) or a lagging one (red quadrant) can be in extreme conditions brewing a reversal; for that reason, individual analysis is essential. For example, LLY has already retraced -6% in December because the prior +40% rally was overextended. Therefore, be careful chasing without the right compass combining technicals and specific support and resistance levels.
$Palantir Technologies Inc.(PLTR)$ is an example of moves that are not so circular, the stock is trying to return to the leading quadrant, for that reason the technical analysis is needed.
Last but not least, $Short S&P 500 Proshares(SH)$ (the inverse ETF for the SPY) is still in relative improvement, suggesting caution for the week ahead when the rate decision will be issued by the FED.
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