Alex's daily Market Update & Focuslist - 05/23 🖊️
Disclaimer: This newsletter is not financial or investing advice. The information is for education purposes only and reflects only my own operation.
After being down more than 2%, market rallied very hard into the week close Friday. This is very interesting action, because that was the 3rd time we tried to break below 3858$ level. I see Friday’s attempt as a possible shakeout below as we closed unchanged for the day.
Don’t quote me wrong, we are still in downtrend and below all kma’s, but after having 7 straight down weeks, we could see a bounce soon. 7 weeks is near a market history record (8 weeks is I think) and breadth is at oversold levels. I also begin to see many good setups in sectors that lead last March power rally. #oil #natgas #coal #chemicals #transport #metals (More in the FocusList :))
On the upside, I’ll watch first if we can breakout of the 5dma, then the 10dma will be around 3964$ level which could act as resistance.
On the downside, these levels might act as potential support:
3858$ (1% move)
3832$ (2% move)
3722$ (5% move)
3675$ (6% move)
For now though, we’re still BELOW ALL KMA’S, so this is a full RISK-OFF market for me right now. BUT, always stay open, positive and flexible!!
Still have NET new lows on both NYSE & NASDAQ.
VIX retraced back below 30… interesting but we’ll need more confirmation
P/C ratio still not spiking, so no real fear in this market yet. We want to see equities spiking above 1/1.1
McClellan ratio back to 0.
We have FOMC minutes on Wed. which could move the market, but I don’t expect nothing important. The GDP news on Thursday could be more important as there will be a lot of eyes on these numbers to gauge the economy health.
Strongest sectors for the week were Solar & Clean Energy. That was some pretty impressive Relative Strength and I’m taking notes. However, we still have a lot of overhead supply and still below all important weekly ma's. (10 &30wma) A breakout of the 30wma, the DTL or 80$ area, with some tight action before would get me interested.
Also still looking at Crude Oil (CL_F) for a potential breakout. Price action is super constructive which yet another higher low and pushing again against 111.37$ pivot. No wonder why so many Oil stocks are setting up right now.
Nothing for me Friday as market is still below 5dma. Patience, I see many stocks building beautiful base right now and sectors that begin to strengthen, but the market is not yet ready imo. Think risk first.
I day traded a nice SPXS (SPX short) Friday and covered just in time before the big EOD rally. Still no overnight exposure as per my exposure rules.
New positions:
Trimmed positions:
Closed positions:
Despite having a market below the 5dma, I found many interesting bases forming near buy point again this weekend. This is interesting as we’ll want to see stocks tighten and breaking out, even before the market reverse. That’s what happened during last March rally. All names in tonight’s FL are in sectors that lead that March rally…#oil #natgas #coal #chemicals #transport #metals. Coincidence?
8 names in the Focuslist tonight. Might only take day trade if market is good tomorrow, or keep 1/2 positions if we close above the 5dma. We’ll see.
INSW - Still top of my list after showing such high RS last week. We were able to hold 22.98$ pivot Friday and might even act as a shakeout. We also tested to the tick the 10dma before finding support. I’m still watching 23.96$ pivot breakout for an entry.
CELH - Still like this potential stage 1 base breakout a lot. We were able to stay above 50dma all week and tried a couple times breaking out but market really dragged it down. If we get good market conditions, I’ll have my alert ready at 61.37$ to play the WB & stage 1 breakout.
CEIX - Was able to hold both the breakout area & his 21dma late in the week. I really like the way this is showing VCP characteristics. Alert @ 52.5$ from first BORS attempt high.
TECK - Not the tightest, but the the nature of this beast. It was also wide n loose in March right before his big run up. I like the higher low deep in the base and the way it showed RS this week by staying above his 50dma. I see the WB with either the DTL or 41.22$ pivot breakout. This name could be a leader.
SWN - This is my favorite Oil play right now. After a huge 125% run that led to a low volume pullback to his 50dma in the last few weeks, we are not seeing higher lows and very tight action right below the DTL. We even retested the 50dma Thursday & Friday and been able to hold it. Alert @ 7.34$ which is the recent swing high.
EQT - Favorite Natural Gas play that tried to breakout of his WB last week, but came to retest the DTL late this week. I like how we are building the right side of the base with tight and low volume action. Also, commodity is super strong and looks like it want to breakout as well. Alert @ 42.91$ which was the 2 recent swings high, now acting as resistance and structure pivot.
PBF - Another Oil play that I have on my radar for tomorrow. I follow this stock for a while now since his first breakout attempt. We tried a 2nd breakout last week which we again retested the BO level & 21dma. Alert @ 31.69$ which was most recent swing high.
TELL - Some of you that follow me for a while will recognize this name that I traded back in March for a good chunk of his big run up. I think it is setting up again, and I’ll try to get back again. The 4$ area correspond to a retest of the larger weekly WB we had in March, and we just retested 2 weeks ago. Overall the pullback back there was very controlled and on low volume. DTL is pretty clear, and I’ll try to position before a breakout of it, but playing the 4.74$ pivot first. If the trade works, I’ll probably add a second position on the DTL/4.97$ pivot breakout as well. This is also a Nat Gas play, so commodity strength is the main driver behind this strength.
I’ll start tracking top fundamental stocks with highest 6 months Relative Strength, holding up the best short term. (40% 1M-RS + 60% 6M-RS ratio).
During market correction, you want to keep track of these names as they will be the one to watch when conditions improves.
Relative Strength 40/60 - TOP 20:
VTNR,ARCH,ARLP,DK,CVI,CVE,LNTH,VLO,LPG,AMR,GOGL,SQM,DVN,AR,SD,INSW,DINO,OXY,SBLK,CC
Relative Strength 1 Month - TOP 20:
VTNR,RELY,CVET,PDD,CD,AHCO,CVE,DQ,ARLP,VTRS,DK,SQM,SLDP,LPG,DINO,LI,HRB,CELH,CC,ARCH
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