Current Focus List
The VoSI Focus List is a compilation and reference list of stocks for which Pocket Pivot or Buyable Gap-Up Reports have been issued and which have been deemed suitable for inclusion on the Focus List. Not all stocks for which a Pocket Pivot or Buyable Gap-Up report has been issued will necessarily be added to the list. It is not intended as a "buy list" or a list of immediately actionable recommendations. Stocks on the list may or may not be in proper buy positions, and investors should exercise discretion and proper judgement in determining when and where stocks on the Focus List can be purchased. The following notes are intended to assist in this process. Please note that members can enlarge the Focus List image by clicking on the body of the email and then holding the Control Key while pressing the "+" key until it is large enough to read.
Volatility in the market has reached extremes, particularly on an intraday basis, as both the indexes and various stocks, both leading, formerly leading, and completely busted have been swinging around in wide ranges. Representative of this type of action was Monday's huge rally which saw the Dow Jones Industrials Index post its third-highest point gain in history while the NASDAQ Composite Index rocketed 3.24% higher on very heavy volume. This action looked quite bullish, but immediately gave way the very next day as the indexes all reversed back to the downside, with the NASDAQ posting a complete outside reversal.
The market remains in a downtrend, and the current position of the S&P 500 as it attempts to hold a retest of its 200-dma is critical. After finding a low two Fridays ago, the S&P is still in the fourth day of a rally attempt, so, theoretically, a follow-through day could occur at any time. We are not so certain that such a follow-through would see the emergence of new leadership or just massive reaction bounces in any number of beaten-down leaders is a critical test of support. This market has become one of the most volatile that we've ever seen, and trading/investing in such an environment is dangerous unless one is very nimble. However, the rapidity with which this market reverses course on an intraday and daily basis, makes it more than challenging regardless of one's time frame. In our view, the steepness of the latest market breakdown over the past three weeks suggests that investors have likely already been forced into majority cash positions based on the action of leading stocks within the context of the current, steep three-week downtrend.
The Market Direction Model (MDM) remains on a cash signal, reflecting the high degree of uncertainty in a market that has remained extremely choppy and trendless since the February lows.
Removed from the List this Week: Applied Materials (AMAT), Blackberry (BB), and Atlassian (TEAM). AMAT and TEAM have both transposed into nascent late-stage failed-base (LSFB) situations, while BB has broken down on massive volume, even after a favorable earnings report that saw the stock gap-up on Wednesday morning but quickly reverse as sellers swarmed the stock.
Focus List Stocks Expected to Report Earnings this Week: None.
AMZN has been finding support along its prior February lows but is now sitting below its 50-dma but as of yet has not technically violated the 50-dma. The stock has come under pressure as a result of President Trump taking at least a hard "lip service" line against the company, depicting it as a parasitic, ruthless, corporate predator that is allegedly causing other retailers to operate at severe disadvantages or go out of business altogether.
Both NFLX and NVDA have undercut their prior March 2nd lows and rallied, triggering U&R type set-ups on Thursday. NFLX is in the better position, however, given that it is still above its 50-dma. NVDA has technically violated its 50-dma but has not been removed from the list based on the undercut of the prior March 2nd base low and the subsequent rally back up through that low on Thursday. That said, the stock has been a non-performer since late January outside of price swings within its two-month base, and could run into resistance at its 50-dma on this latest reaction bounce.
SQ is holding right at its 50-dma and the top of the prior cup-with-handle breakout point. It has given up all of the gains it achieved following that base breakout, but is theoretically at a lower-risk entry point here with the idea of a quick exit if it cannot hold the 50-dma.