Alex's daily Market update & Focuslist - 02/05
The broad market failed to follow-through on Friday's bounce.
Good evening!
The broad market failed to follow through on Friday’s bounce, and that’s not the action & feedback I wanted today.
I continued to have mixed feedback in the last few days, and Friday’s positioning attempt is another negative feedback.
I honestly don’t have a read on this market, with so many mixed signals right now:
Semis/Software/AI/Cloud/Cyber all sit just below new high levels and show constructive action. Biotech is also set up well, which adds to the health of potential sectors.
PTMM & Breadth show a serious negative divergence, with the breadth to continue deteriorating as ES & NQ make new highs.
MCSI continues to live below the 10dma and now shows acceleration on the downside
RTY also shows that divergence, with a 50dma break today.
Credit Spreads & VIX are now less on red flags than they were last week. (One bad day and they might)
Bond Yields & Dollar are breaking out and putting weight on growth names
And above all, I just had bad feedback on my positioning attempt. The PTMM ST_momo indicator I used to position just flipped negative today, and I’ll watch how far we can go if the selling continues. Maybe another window of opportunity might happen in a couple of days.
Again, that's not what I wanted to see today...but I keep an open mind as the LT_trend is still in an uptrend.
Defense + wait & see for me now.
HAGN!
Alex ✌️
Tonight’s daily report content
PrimeTrading Market Model #PTMM + Takeaways
General Market Analysis: NASDAQ - S&P 500 - RUSSEL 2K - OTHERS, including my daily levels & my bullish and bearish scenarios
Market Internals
Sectors & Themes Analysis
Daily Focuslist including setups, alert levels & explanation (long & short)
Leaders list + Scans (technicals, fundamentals & potential TMLs)
My Portfolio Update
Economic Calendar
PrimeTrading Market Model #PTMM
That's clearly not the follow-through on Friday's bounce attempt I wanted to see today...
MCSI continue to live below the 10dma, and now shows acceleration on the downside. 66% down day.
NNH took a hit, now close to flat.
Price failed to bounce off the 21dma, and instead made a new LL as we broke below the 21d. Not good
5-day ratio back below 1, but still not in high probability spot. We could go lower if market flush here.
MT_momo hooked back down today
LT_momo continue to be in downtrend & elevated
Again, not what I wanted to see today...but I keep an open mind as the LT_trend is still in uptrend. Defense + wait & see for now.
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GENERAL MARKET ANALYSIS
S&P500 (ES_F)
ES retested the 8dma & the 4956$ pivot today. After early weakness, we bounced, reclaimed, and closed above the pivot.
It was an inside day, showing some indecision, so tomorrow's break of today’s range will give a good future direction clue.
So far, the trend is still VERY strong, and there is no reason to refute or doubt it.
NASDAQ (NQ_F)
Retested the 8dma and closed strong just below 17793$ with an inside day. Tomorrow is key.
We want to see a reclaim of that pivot and breakout to new highs. If we can’t, then it will be a red flag or indication more time is needed to build.
RUSSELL 2K (RTY_F)
RTY is still lagging and closed below the 50dma today. I’m watching that potential pullback channel, but we now have a lot of possible overhead resistance. I don’t particularly appreciate seeing the 50dma breakdown today, which puts me on the defensive for small-caps until we see a clear reclaim here.
Market Internals
Market Breadth & Extension (Stocks > 5, 20,50 & 200dma - short to long term view)
VST breadth down to 30%
ST breadth new low and below 50%
MT/LT breadth is still elevated & extended, with both back in a downtrend.
Breadth continues to contract…and that’s a pretty clear negative divergence.
I’m watching that price structure for further market direction. Rejected at 14.49 again today.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
Rejected & back below all kma’s.
10Y Bond Yields (daily)
Retesting kma’s and recent channel DTL. Normally a stock setup a would play short on that structure retest…but we’ll see how it goes with the bond yields.
US dollar index (DXY)
104.23$ structure level BREAKOUT today. No bueno and head wind for equities.
Back below all kma’s.
BTC/USD (Bitcoin)
It’s getting squeezing below that pivot & UTL. That structure will be a good indication of future direction.
SECTORS & THEMES ANALYSIS
FFTY & large-cap were mostly flat, but it was a rough day for ARKK & IWO...riskier/growth stuff with yields up
Healthcare green all day with Tech
Hard day for materials & Utilities
Biotech is setting up well
Strong day for semis & Software & Cloud which look good below recent highs pivots
Leading themes charts (rank sorted):
1 Semiconductors SMH
Right at recent high pivot.
2 Uranium URA
Still pulling back and holding the 8dma for now.
3 Software IGV
Constructive action in that range.
4 Cloud Computing SKYY
Still in that range.
5 Artificial Intelligence & Technology AIQ
Inside day and looks constructive for a breakout.
6 Cybersecurity CIBR
21dma & range level pullback. Strong close.
7 Homebuilders XHB
Still tight in that base.
8 Gaming & eSports ESPO
Constructive action near new highs.
9 Medical Devices IHI
Failed breakout.
10 Restaurant EATZ
Failed breakout on volume. Red flag.
Sectors & Themes ideas (weekly):
FOCUSLIST
CELH (Long ) daily/W/65m - CELSIUS HOLDINGS, INC. - Alert: 53.62, SL: 50.29
Setting up on that base level retest setup, after breaking out of the wedge end of Dec 2023, we sold off pretty hard then created that tight channel as we retested the base level. Friday we broke out of that tight channel and today we a second retest and 50dma reclaim.
It's certainly a more volatile name, and it didn't show a lot of RS recently, but it's at an interesting spot.
BRZE (Long ) daily/W/65m - Braze, Inc. - Alert: 55.7, SL: 54.06
Building higher lows at the rising 21/50dma in the last few days as we digest the recent move and build an handle just below the recent high pivot.
STNE (Long ) daily/W/65m - STONECO LTD. - Alert: 18.24, SL: 17.38
Didn't act well today, but held the UTL & recent lows, so still a HL and within the structure. If we can reclaim the 17.90 or 18.24$ pivot I'm interested.
DOCN (Long ) daily/W/65m - DigitalOcean Holdings, Inc. - Alert: 34.84, SL: 33.85
Same thing for this one as we held the UTL and still within the structure below that 34.84$ pivot. Setup is still valid
XBI (Long ) daily/W/65m - SPDR S&P Biotech - Alert: 88.77, SL: 86.39
The biotech theme is still showing constructive aciton just above the 50dma with an bullish outside day today. There is a ton of biotech name setting up to confirm that etf strength.
SCANS
10dma pullback scan
CRWD GTLB
21dma pullback scan
PAGS GLBE CBAY PVH AEO ALIT WSM ITCI M BBWI
50dma pullback scan
GLBE AEO CELH
Continuation breakout scan
BLDR
Bigger the base, higher in space scan
CELH
Last week's top gainers - study material
NXT ARVN SYM HLIT EAT VRT CLS MOD WSC BOOT CLF MDB XPO FSLY NVDA DDOG DOCN DKNG SNOW ELF THC PLAY BLDR ESTC
Themes: Tech, Software, Consumer, Materials, Semis.
Continuation breakout: VRT WSC CLS NVDA ELF THC DKNG BLDR, etc
Pullback: ARVN SYM HLIT EAT MOD DDOG DOCN SNOW ESTC
EP: NXT BOOT
There are still many pullback setups, but we see more & more continuation breakouts in this week's scans. This is something to keep in mind as more stocks make new highs.
Good execution finding HLIT before moving last week in FL.
Caught DOCN move from FL and executed on it.
FSLY & BLDR were two positions that I cut too soon 2w ago.
MDB VRT SYM ELF DDOG ESTC all names that were shared & played in the PT community
We are in the right name, guys; we must continue identifying and executing these setups without jumping out too soon.
Again....study this list & scan EACH WKND, and find the correlation with your routine and what you can improve to put you in these setups week after week. That's how you improve your game.
What worked, and what do they have in common that I can replicate?
Those were the top performing liquid stocks, we want to catch those!
PORTFOLIO UPDATE
Bad feedback at open, as I got stopped on STNE & DOCN.
Closed SMCI swing. After only 33 days from entry, and the level of weekly extension here. 14.12xATR-50dma (that's super stretch!!) I'm calling it a trade for it with 121% from entry and will look to re-enter if it sets up again.
Decided to close SQ EOD as SL too close overnight
Tried GTLB at open, which failed for 1R loss (-0.25%ec)
Tried to re-enter STNE & DOCN on intraday structure breakout in afternoon, but failed to follow through and I closed EOD for +0.25%ec gain
Overall, flat on new exposure today, and gave back Friday's +1.25% ec gain today. Part of the game!
That's why de-risking is so important to me. If not taking 2R trims Friday on new exposure, I would have been down -2%ec+ today. At least by de-risking I'm back at square 1 without damage on the positioning attempt!
INTRADAY/CLOSED TRADES:
Important economic news/events (weekly)
REFERENCES
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