Cup and Handle with 50pc Retrace

Earnings This Week

Nasdaq, semiconductors and some energy producers.

Into the Pool Again

Right shoulder

may be completing here.

We've Only Just Begun

I am strolling through the charts and seeing areas of the market that haven't even completed tops yet. It took 5 minutes of looking at charts to find these, this is the top of my giant pile of charts. And by top, I don't mean the best, though some are great. I mean I made it through only a sliver of all my watchlists and had enough charts for a short video.

Bounce and Breakdown

GNRC is down nearly 20 percent today and approaching a longer-term support line. POOL went through support and a horizontal today.

Middle Class Luxury Consumer

These stocks sell middle class "luxury" goods: backyard pools, ride on lawnmowers, boats, snowmobiles and a REIT with exposure to RV parks and marinas.

MCD Again

This wedge break will be epic.

Another one topping:

Old favorite nearing 52-week lows and completed top:

Pool Plunge

Earnings and guidance seemed on target, but maybe not good enough for a slowing economy.

Diving into POOL

Pool finally cracked, a little late. Looking for a bounce and then re-entry later. I'm not playing a bounce on the long-side. Waiting.

Cashed Up for the Week

I'm long GDX, TLT. Have some puts on AMR riding the Spruce Capital play. Otherwise mostly cash. Will be looking to add consumer finance shorts this week, DFS looking like my first choice. I keep going back to the well on MA, V, MCD, POOL those are all going to be beauteous shorts at some point. Eyeing XLE, SMH for sectors. Still like crypto carnage plays like SBNY. Also looking at adding ZN (futures) calls way out in December.

The S&P 500 could get to 4100 area. Not a forecast, but I'm watching to see how the market reacts. If the lows aren't taken out, odds of a bounce increase.

BTC could run to $40,000 in a general bounce.

The ES is lokoing diamondy this morning. The move out of this pattern should be a powerful one.

My read in the very short-term is the bears have to put up or shut up. They take out the lows and the bottom drops out on this market, or the bulls are going to meander this higher with or without a squeeze. It doesn't mean the low is in, only that this potential breakdown moment has passed.

Diving

Pool

Gap at $389. The market could hit it or not before a rally, but if it goes through, then there's no support. The top is already complete, but the gap is the last stop and the last concerning area for bears. Then comes the deluge.

POOL Party

Pool gained nearly 10 percent this morning after reporting surprisingly good earnings, and then gave it all back. I added to my puts.

Playing With SlopeTools: Expensive Consumer Goods

I've posted this chart before, five "expensive" consumer goods companies. RVs, four-wheelers, expensive lawn care machines, swimming pools. The thesis: inflation will curtail these middle-class luxuries. These are all items that will see their purchases delayed when household finances become tight. These would all be good long targets if and when wage growth finally exceeds inflation...

Sun Communities (SUI): Sun Communities, Inc. is a REIT that, as of September 30, 2020, owned, operated, or had an interest in a portfolio of 432 communities comprising nearly 146,000 developed sites in 32 states and Ontario, Canada.

Pool (POOL): Pool Corporation distributes swimming pool supplies, equipment, and related leisure products in the United States and internationally.

Toro (TTC) :The Toro Company engages in the designing, manufacturing, marketing, and selling professional and residential equipment worldwide. The company's Professional segment offers turf and landscape equipment products, including sports fields and grounds mowing and maintenance equipment, golf course mowing and maintenance equipment, landscape contractor mowing equipment, landscape creation and renovation equipment, and other maintenance equipment; rental, specialty, and underground construction equipment; and snow and ice management equipment, such as snowplows, brush, snow thrower attachment, salt and sand spreaders, and related parts and accessories for light and medium duty trucks, utility task vehicles, skid steers, and front-end loaders.

Polaris (PII): Polaris Inc. designs, engineers, manufactures, and markets power sports vehicles worldwide. It operates through six segments: ORV, Snowmobiles, Motorcycles, Global Adjacent Markets, Aftermarket, and Boats.

Thor (THO): Thor Industries, Inc. designs, manufactures, and sells recreational vehicles (RVs), and related parts and accessories in the United States, Canada, and Europe.

I used two tools at SlopeCharts for the chart below. One was auto-trendline from the top and bottom. The other was a regression line for the entire period.

Here are the individual charts. What I see is either major topping patterns or very long-term trend that has stayed in the upper half. PII may be the best example. There are two breaks through the middle trendline and the result was a plunge to long-term support. A repeat would send the stock down more than 50 percent from here. The only one of these I have puts on right now is POOL.

SITE is another stock that expanded similar to POOL. Has a great setup too. I left this, and others out of the index, because I think 5 is a good enough sampling. Speculators should be going through all the companies in these sectors, no doubt there are many more bearish setups.

Bye Consumers

Jump in the Pool

This is one of my highest confidence shorts.

1. The chart has a clean top. Not fully completed yet, but close.

2. The company is involved in a fair-weather consumer business: pools.

3. The company grew by acquisition, a classic bull market winner that often becomes a bear market casualty.

Good Life Index

Energy intensive consumer luxuries. Pools, ride on lawnmowers, jet skis, RVs and an RV park REIT.

Pool

I'm expecting a major flush if the broader market turns lower. Might get a drop anyway, by wider weakness would open the trap door.