Price action across Thursday and Friday was the most bearish since end of February until around mid-March. The S&P 500 was well on its way to recovering from April’s setback when the index traded above the 200-day MA Thursday morning. Unfortunately, that was as good as it got and it was all downhill from there, with the index dropping 250 index points by Friday’s close.
Now that the index has pulverized its 4.350 support, the current annual lows are just 1 weak day away and we should schedule this next bear event and the ensuing serious backtest of the 2022 lows support environment for Monday and/or Tuesday.
On this occasion, for the brave among you whose trading tactic is to buy possible important dips, there could be a fairly risk-free long entry into this so far fantastically strong performing ETF:
The Pacer U.S. Cash Cows 100 ETF (COWZ) tracks a free cash flow-weighted index of companies selected from the Russell 1000 Index. COWZ screens companies based on their average projected free cash flows and earnings (if available) for the next two fiscal years. Companies without these forward year estimates will remain in the index universe, however, firms with negative earnings or free cash flow are filtered out. The remaining companies are ranked according to their twelve-month free cash flow yield and the top 100 names are included in the index. At each quarterly rebalance, constituents are weighted based on their trailing twelve-month free cash flow with a 2% cap applied on any single security.
Looking at the following monthly chart of the COWZ shares, we can assume that this mathematical approach works quite nicely into today. The bull market of this ETF looks phenomenal. Secondly, and this is important nowadays, it is still running at all. Third, it will likely continue for some more time, according to this monthly GUNNER24 Up Setup, which starts at the 18.26$ alltime-low of March 2020.
Setup measures a classic 8-Fib number monthslong initial up impulse. Once the Blue Arc was broken to the upside on monthly closing base the bull ignited a +yearlong stampede and is still a steeper rally than the average rally.
There are no correction cycles. If at all, there are only small short breaks in the powerful upward trend. Lastly, we see a clear confirmation of both lines of the 2nd double arc during the summer months of last year.
Because this powerful bull run was able to reach the upper line of 1st as well as the mentioned upper line of 2nd in the past, it is activated that the upper line (UL) of 3rd duble arc is an important future natural uptarget for COWZ shares. The upper line of 3rd uptarget rail runs near/at the 55$ for the next few months. But of course the lower line (LL) of 3rd is the most obvious important activated upside target of theis stampede. The price quoteed already almost at the lower line of 3rd uparget magnet, therefore the 52.80$ should already be worked off within a few weeks ...
==> Activated shortterm GUNNER24 Uptarget is the 52.80$!
This upward trend looks no less impressive on the technical weekly chart:
Since around June 2021, the market has been rising in a fairly narrow bullish Parallel Channel. Markets that mostly stay within the boundaries of their narrow channels are, according to doctrine, trapped in a trend that is as stable as possible. Have little risk when trading in trend direction. Always when a market doesn`t hop there is little danger to exhaust itself. This bullish COWZ upcycle is probably unbreakable until next higher monthly GUNNER24 Uptarget has been hit!
This week high at 51.60$ means also the alltime-high and was also the umpteenth negative test of the rising Bull Channel resistance. The following Thursday/Friday meltdown nearly reached the Channel support magnet on Friday and usually will dent this rising yearly support rail coming Monday to Wednesday. This coming dent should be the 6th dip since the bullish Parallel Channel began to work!
If we bring the past developments and the tight bullish Parallel Channel since the #1 // 2021 Summer Low in relation to this valid weekly GUNNER24 Up Setup, we are able to recognize this:
The former year highs made some weeks ago, were able to close above the 2nd double arc long trigger within overlayed weekly 7 Candle up setup. This next formerly fired strong weekly buy signal has activated the next higher bull market uptarget of the 3rd double arc which in this special case seems to be worked off with a +95% probability within currently running weekly upcycle.
==> I think, the upper line of 3rd double arc uptarget magnet could be finally worked off in the course of May 2022 as long as the nicely confirmed Parallel Upward Channel keeps on pushing higher. And why should this for nearly a full year determining bull market range suddenly fail in the coming weeks, when in addition both the weekly and monthly charts are still strong long?
The upper line of 3rd uptarget interestingly takes course at the 53$ or so for the nearer future, means the 52.80$ area forms in the recent past activated future natural combined weekly and monthly arc uptarget magnet!
==> The selected shortterm GUNNER24 Uptarget is a combined weekly and monthly uptarget magnet. This 52.80$ for May 2022 is of course at same time very interesting natural future main resistance point!
After the textbook spike low of the penultimate trading week, which tested the 2nd double arc very successfully from above another serious backtest swing into this confirmed weekly main support range started at on Thursday freshly printed 51.60$ alltime-high and well, a look on the chart should be enough to guess that the next test next test and another dip below the dark-green Channel support rail should only be a matter of time or hours.
==> Think, buying the 99%-likely due 48$ to 47$ dip until Wednesday is no bad idea for the brave traders, as there runs combined weekly and yearly support zone = ideal pullback support for COWZ!
Be prepared!
Eduard Altmann