A weekly piece by Scott “Shooter” Henderson covering a few conviction trades, Primary Wave Set-ups, Next Entry Longs, and any Continuation Plays. Shooter’s work is founded in Elliott Wave Theory and other technical indicators.
Follow along in chat if you are going to swing trade a portion of your account. We recommend starting with trading 5% or less of your total portfolio and no more than 20% even as you gain experience. Take the time to read “Using Shooter’s Swing Notes.“ After all, you are your own captain. Please review our risk disclosures.
All eyes will be on Tuesday’s CPI report and how the Fed reacts. Will they drop the rate hike before May’s meeting? Personally, I can’t help but feel the Fed will hold simply because of the negative yield curve. On the other hand, indices do not have 50 basis points baked in while bonds got slaughtered last week! I don’t think Biden knows what kind of hell he unleashed upon the world by banning Russian commodities. Supply chains just don’t move over night; it takes years. Yet, that should be a tailwind for US shale, gas prices, and other oil and gas producers.
This week, we will continue to stay light and focus on known trends like the Nasdaq (after the bounce) or TLT fade into oblivion. Metals may be a play (GOLD looks like a breakout), but at this point, we are seeing a decent discount on China’s closures. Last I heard, we were at 21K cases and growing.
Shooter likes to run into earnings “NOT DURING”. In some cases, when a count supports a thesis, I will plan to roll a percentage of gains (5–25%) into the next month’s calls. So when I do take something into earnings, it’s usually a Straddle or Bull Call Spread. Keep in mind that count history, sentiment, and earning history ranges play a role in my decision making process. I’m not a FOMO kind of guy like most earnings players. You can see the earnings calendar for the week beginning April 11th here.
Shooter’s Trade Ideas:
Several of Scott’s conviction swing trading ideas from the Plug & Plays, VSL & ETFavorites, his own lists, and short ideas (which are NEVER from the VSL which is a long-only list).
Plus, tracking of intermediate term Plug & Play trends for adding to and trimming positions.
Crypto can be found in Crypto Trade Shots.
Top Breakout Candidates:
Stocks & ETFs are likely to breakout in the next week or two.
GOLD I’d like it much more if we had a 50% back-test of that first leg, but it looks like it’s going to go into the CPI report on Tuesday. Maybe sell $22 puts, thinking it’s a decent price and we have 2 to 3 quarters of inflation ahead of use.
WMB Pokes its head above while the Next Entry Long $31.98 and it measures to $36.15 next.
Top Breakdown Candidates:
Stocks & ETFs likely to pullback in the next week or two.
Tracking Breakouts & Breakdowns
KMI We are overshooting the last count here. I got so wrapped up with other stuff that I did not even think about this as a Russia play. It’s above the breakout line. It’s shallow, but if you get a shot at $18 again, I think that $20.40 ends up being shallow with this geopolitical stuff. Just keep in mind that it’s an ABC down, so give yourself some room if you’re going to sell it. Maybe keep rolling short duration even if you’re not banking big. We could see Fed intervention in the oil market. We are just not creating a million new EV’s a month here, and then where is all that power coming from? We are 5 to 7 years away from even a 25% adoption rate of EV’s.
Top Short Ideas
Stock and ETF ideas for hedging the market. Keep your positions small to start and pyramid if it goes your way. Kirk generally recommends using ETFs for betting against the market and hedging as there is rarely a catalyst that blows up those trades, i.e. they move slow enough to escape with some capital intact if we are wrong.
Stock ideas are from OUTSIDE the VSL. Always bet against “shit stocks” not stocks of companies that are great or could have great stocks. Shorting stocks is a pro move. The pro way to short is set up a pair trade. Find a “shit stock” to bet against when you’re taking profits on your “great stock.”
Plug & Play Primary Wave Set-ups
Based on weekly charts and intermediate-term time frames,
MU Primary Wave Setup with a 90-min. trigger. It is currently back-testing the lows. Even if they get put on me, I will just roll $2 lower and repeat. Anyway, we sold an April $70 put and a May $70 put early in the week. It is not invalidated until it closes below the prior Primary Wave II (Green Circle).
PLTR A Primary Wave Set-up with Daily Trigger (1/2 size). Next Entry Long is in at $11.75. Measure to $23.53 for a Intermediate Wave One. Decent back, after that to around $15.01 which will become our Next Entry Long. The stop is a close below the Primary Wave Set-up. Could sell a May $10 put.
PYPL A Primary Wave Set-up with Daily Trigger (1/2 size). Entry is now! Measure to $146.10 for a Minor Wave One. The we get a decent back-test to around $112.82 which will become our Next Entry Long. The stop is a close below the Primary Wave Set-up (move it to the II when its in). Could sell a April/May $105.
KKR A Primary Wave Set-up with Daily Trigger (1/2 size). Next Entry Long is in at $54.35. Measure to $73.35 for a Minor Wave One. Decent back, after that $65.41 which will become our Next Entry Long. The stop is a close below the Primary Wave Set-up. Could sell a April $50 or May.
BX A Primary Wave Set-up with Daily Trigger (1/2 size). Next Entry Long is in at $112.66. Measure to $166.79 for a Intermediate Wave III. Shallow back-test, after that $152.55 range which will become our Next Entry Long. The stop is a close below the Primary Wave Set-up. Could sell a April $100 or May. Goo deeper on this one. That last candle is kind of nasty but its done nothing wrong.
CCI A Primary Wave Set-up with Daily Trigger (1/2 size). Next Entry: Long is in at $191.80. Measure over $230 for an Intermediate Wave IV into 2023. The stop is a close below the 50 day here. It could sell a April $190 before the Next Entry Long (NEL) Just watch that top on the daily for rejection so you don’t get caught in flush.
STAG A Primary Wave Set-up with Daily Trigger. Next Entry: Long is in at $41.48. Measure over $42.79, then the Intermediate Wave III around $49.69. The stop is a close below $40. You could sell an April/May $$35-38 before the Next Entry Long (NEL). The retrace says it’s kind of shallow, so I’d stick to $38 or lower.
AZRE A Primary Wave Set-up. Next Entry: Long is in at $15.85. Measure over $22.85 then the Intermediate Wave III around $29.70 The stop is a close below $12.97. You could sell an April/May for $13 before the Next Entry Long (NEL). The retrace is about done.
PYPL A Primary Wave Set-up with a Daily trigger. Next Entry Long is in at $116.10. Measure over $146. then the Intermediate Wave I in near $230.00. The stop is a close below $92.25. Could sell an April/May $100 just before the Next Entry Long (NEL). The retrace says it kind of shallow so keep that in mind.
YOLO A Primary Wave Set-up with Daily Trigger. Next Entry Long is in at $9.76. Measure over $42.79 then the Intermediate Wave III around $49.69. The stop is a close below $40. Could sell an April $$35-38 before the Next Entry Long (NEL). The retrace says it kind of shallow so I’d stick $38 or lower.
Plug & Play Trims
Based on weekly charts and intermediate-term time frames:
SWN back-test measures to $6.75 then we grind back to put in a final high of around $8.53..
BCE should have a decent back-test off that $59 high for just shy of $4…
Remember to follow Shooter on Twitter @swingtradenotes for added market thoughts.