Following is a summary of my technical views over the last 8 weeks, which took us from no equity exposure at one point to starting to build stock positions since March 18, in dominant large cap leaders, currently at 13 open positions. Every day is still a focus on the process, but as long as leading stocks and the indices continue to make higher highs and higher lows, and reclaim key moving averages and price levels, then our view continues to be technically bullish as of now.
A key point is that we didn’t try call a market bottom to get positioned correctly, but instead followed price and the process, and let the market and leading stocks confirm the uptrends, without making any predictions.
I made a decision to cut a bigger long equity position early on Friday, which is something I don't usually do, from having studied my own Blog on market tops. Black Monday 1987 started w/ a Friday close below the 200-sma, which we had last Friday as well.
https://t.co/QcALGRokrl pic.twitter.com/tw9ei482t4— Larry Tentarelli, Blue Chip Daily (@LMT978) March 11, 2020
What I can say with fair certainty, having been through some vicious markets in 2000-2002 & 2008:
There are going to be some absolute home run fortunes to be made on the other side of this, which we will get to.
Stay liquid, be patient, & don't look for the bottom every day.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 12, 2020
As followers know, I have been very defensive & building cash since 3200, but markets are getting closer to the equilibrium point.
The markets are going through a reset for the obvious slowdown coming, but the risk reward is getting closer. Don't overtrade it until then.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 12, 2020
Some worry that the Fed and other CBs will run out of tools, which will not happen. They have everything at their disposal besides just interest rates. See below ???? https://t.co/fWsyXNOiYk
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 12, 2020
$1.2T consumer/small biz fiscal package + $700B QE, + Repo + 0% rates + other global Central Banks pushing in as well.
Make no mistake, they are all going to keep pushing all-in.
A longer-term needed positive for markets. https://t.co/iRJ91RIbzq
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 17, 2020
Many think the Fed has lost their punch b/c markets traded down after their announcements. Their job isn't to stop markets from going down, but to keep enough liquidity in the system so that markets function correctly. In the long run, the stimulus will help.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 17, 2020
All eyes on the $SPX which has alot of broken industries & broken charts.$NDX is where the relative strength and longer term support levels are. pic.twitter.com/iRHB7Zv1FJ
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 19, 2020
Just as true 9 days later.
The key's: stay liquid (very high cash), be patient, don't try to call the bottom every day.
For those that can do the above 3, the lower the prices get, the higher the returns on the other side for new buys, at the right time. https://t.co/xUJ7nwaUFB
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 20, 2020
From the 2018 lows$SHOP went 3x $AMD went 6x$AAPL 2.5x $AMAT 2.5x $CMG 3x
Those moves will come through in many names on the other side of this. Have to be able to wait it out with alot of cash.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 20, 2020
What I expect we will find out in 6 – 12 months is there is still alot of forced liquidations from funds that didn't sell alot higher when they could, now they have too.
Those with heavy cash will gradually move in at some point & come out on the other side likely much higher.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 20, 2020
As discussed last week, Central Banks have unlimited tools.
They can't "stop markets from going down", and that is not their job. They provide needed liquidity and some confidence in the system functioning. When the core problem is gone, the added liquidity can help LT upside. https://t.co/sBkXaC5JZb
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 23, 2020
Those calling for 2008 Redux could get it right, b/c any outcome is possible, the speed of this decline & core healthcare/economic issues.
This Fed QE program is larger than all others & started 3 weeks after the top, vs 13 months after the top in 2007.
Observation only.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 23, 2020
There is still alot of healthcare risk and economic risk in the markets.
Straight math says $SPX 2300 + unlimited QE vs $SPX 3300 has discounted alot of bad news and shifted some of the risk/reward.
Staying focused on price signals and leading charts.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 24, 2020
$NDX still much stronger on a relative price basis holding over June 2019 lows, & well over Q4 2018 lows, while $INDU $SPX blew right through 2018 lows. pic.twitter.com/soWJlMLSLv
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 24, 2020
Plenty of interesting conversations to go around on if the "bottom is in or not". The index matters, but I am staying just as focused here on price action in individual names.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 25, 2020
The ECB version of "unlimited QE" – global central banks have been early and aggressive here – having 2008 as an outline. https://t.co/KiOvogLwZA
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 25, 2020
Too many seem to be caught up in trying to call the bottom or not.
What really matters is are open positions making money, are we making money & managing risk.
Individual charts/positions and managing risk > market calls.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 25, 2020
The media is going to focus on the jobless claims numbers. The only thing that matters is how markets and stocks trade after the news, not the news itself.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 26, 2020
Those who have a 3 – 12 month+ time frame are going to approach markets much differently here than someone with a 3 – 12 day time frame.
The low volatility days are far behind us for now & the charts tell much more than reading the daily news flow.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 26, 2020
Many still trying to figure out 'if the low is in or not'. Nobody really knows at all.
All we can really do is manage positions, figure out how much we are willing to risk to test a few best ideas and manage the risk from there. There is no blueprint.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 26, 2020
Many posts online if "the market has bottomed or not" & comps. to 2008/2009
In Q4 2008, 196 $SPX names, 39.2%, put their low in, well ahead of the March 2009 $SPX low
NEW BLOG/VIDEO:
"IT'S A MARKET OF STOCKS"
196 S&P 500 Stocks That Bottomed in Q4 2008https://t.co/JH9mC8kjNY— Larry Tentarelli, Blue Chip Daily (@LMT978) March 27, 2020
While people are spending alot of time trying to call the $SPX bottom or not, many large caps are up 20-30% off recent lows.
In 2008, 39% of S&P stocks bottomed in 08 before the 09 low.
We are continuing to focus in on single stock charts over trying to call a bottom or not.
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 30, 2020
$NDX still leading for now, with the 200-sma not far off, and as a group, still where the best charts are. https://t.co/Es2PC7SGGN pic.twitter.com/IsFSXyzQeM
— Larry Tentarelli, Blue Chip Daily (@LMT978) March 31, 2020
There are plenty of predictions going around for 10-20%+ lower, 10-20%+ higher, etc.
I'm going to stay open minded to all outcomes & just trade the charts on the screen. Price action will let us know when the lows are in or not, & single stock charts are still the focus.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 2, 2020
There are many stocks and industries that are acting technically better than the markets and some groups are in a massive downtrend. Single stock focus will identify the differences.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 3, 2020
While $SPX is -2.4% on the week so far, true "market leaders" like $MSFT are green on the week. $AAL is -36% on the week.
Being able to sort through the herd index mindset and dial into stocks themselves continues to be my focus. pic.twitter.com/xP8tGi0fSh
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 3, 2020
The reason that I stopped making market calls, years ago, is that most traders develop some type of directional bias, up or down, & then only see things from that bias, everything looks bad/good
Once that happens, they stop seeing price action objectively & they trade their bias
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 3, 2020
19 of the top 40 (47.5%) of stocks by market cap were up on the week vs $SPX -2.08%.
It's a market of stocks.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 3, 2020
19 of the top 40 stocks by mkt cap were up on the week vs $SPX -2.08%
196 current $SPX names, 39.2%, put in the low in Q4 2008
Instead of trying to call the index & focusing on today's news, we have started building long-term positions in global leadershttps://t.co/54RK6L9FZi
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 4, 2020
A few heavyweights testing over the 200-sma here$AAPL $ADBE $JNJ $TSM
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 6, 2020
$NDX first close over 8000 today since March 11.
Market internals had been improving as have many large cap tech names, with more follow through today. We know where the key downside risk levels are on any pullbacks. https://t.co/Es2PC7SGGN
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 7, 2020
I had no shorts at all in 2020, just very high cash, for a few reasons, after being heavy short in late 2018.
My experience has been that most (not all) shorts will go to the well a few too many times and give back most on the reversal, and then miss the long side moves.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 7, 2020
Last Thursday, 151 of 500 $SPX names, 30%, closed over the 20-sma.
Today, 405, 81% closed over the 20-sma.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 7, 2020
Today, 483 of 500 closed over the 20-sma. While price & key levels come first, this is one of many market metrics that we have been tracking daily over the last three weeks for signs of market stabilization. Data straight off the charts. No opinions. https://t.co/w8nHE6uJFI
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 8, 2020
The best move that I made over the last 6 weeks was decide to not try to trade both sides (short & long) and focus on cash and long entries.
P/L stayed intact, I didn't get whipsawed in shorts or hedges & new positions started anywhere from 3% to 50% off their highs. https://t.co/raG8h4X63F
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 11, 2020
Markets don't follow a set path. Trends happen, but can reverse at any time. For every predictive chart that someone has, there is someone on the other side of the trade, with an opposing chart, just as convinced that their chart matters too.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 11, 2020
$NDX still leading, first over the 200-sma and now over all key MAs. While consolidation can happen at any time, $NDX and the group are still leading. pic.twitter.com/i0CGyFZOvc
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 14, 2020
Many called for a 2008 redux, but failed to take into account that the Fed went all in 3 weeks after the top, as opposed to 13 months later, as in 2007.
Anything can still happen, as there are many economic challenges, but "the Fed didn't learn anything" crowd missed the mark. https://t.co/3hgL5HWySs
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 17, 2020
The consensus online still seems to lean heavy to the bearish side, with plenty of downside predictive charts to go around, while 152 of 626 large caps are trading above their 20, 50 & 200sma, and making higher lows and higher highs.
It is still a market of stocks.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 24, 2020
Regardless of the index, or news, many stocks have been making higher highs, higher lows and improving in their charts, which has been where my focus is.
Many are still weak or not improving at all, and those are the stocks I continue to avoid.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 24, 2020
Contrary to the overwhelming amount of bearish index charts that are posted daily for the past 4 weeks, the fact is that the leading stocks inside major $SPX sectors continue to make higher highs and higher lows.
Focus on price.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 24, 2020
$SPX Weekly
a -1.3% week, coming off of a +12% week, best since 1974, followed up by a +3% week. Still above the rising 20-sma
Leading stocks in many sectors are making higher highs & lows
My focus: single stock price action, stronger names trending higher + risk management pic.twitter.com/PII6AtQVll
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 25, 2020
Semis $SMH continue to lead higher over the rising 200-sma. One of our top focus groups, and long in the sector. pic.twitter.com/AD0SzIwwn1
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 27, 2020
If you tune out news & opinions, and dial into the charts, there are many charts making steadily higher lows and higher highs, even in the more heavily sold off industries.
Higher lows and higher highs tells the story.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 27, 2020
$SPX breaking away from the 50sma and cyclicals picking up key levels today. Strong price action. Still. pic.twitter.com/qSj68OoXpY
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 28, 2020
$GOOGL strong AH. $FB $MSFT tomo and $AMZN $AAPL on Thursday should set the tone.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 28, 2020
Rotation = opportunity as new sectors have been giving off fresh buy signals.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 28, 2020
More follow though here, in many of the most sold off industries, is a strong signal.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 29, 2020
We will continue to see dozens or more of posts daily of busy charts w/ratios, divergences, random indicators, cross asset data, etc., calling the top every day, since $SPX 2400.
Higher lows & higher highs is an uptrend.
When that trend breaks down, I will reevaluate.
— Larry Tentarelli, Blue Chip Daily (@LMT978) April 30, 2020
Sellers had a chance to take $SPX lower today, after two heavy down days and the media playing up the Berkshire angle, which most serious traders pay no attention to. The uptrend there is still intact as of now and $NDX is stronger. pic.twitter.com/2exEIwQuwd
— Larry Tentarelli, Blue Chip Daily (@LMT978) May 4, 2020
Strong week in $NDX so far +3%, working on a new recovery high, trending over the rising 40-week sma and over the entire March range for now. pic.twitter.com/MiioHchXnx
— Larry Tentarelli, Blue Chip Daily (@LMT978) May 6, 2020
$AAPL
Steady uptrend & another good example of why not to let short term thinking get in the way of the primary trend. Many read too much into one red day on Friday after ER.A clean uptrend of higher highs & lows & no tests of the rising 20sma since > 200sma. pic.twitter.com/6LYqXSj2ej
— Larry Tentarelli, Blue Chip Daily (@LMT978) May 6, 2020
$MSFT
steady uptrend – higher highs, higher lows, no tests of the 20-sma since March. pic.twitter.com/wdVaUn1k8u— Larry Tentarelli, Blue Chip Daily (@LMT978) May 7, 2020
