Alex's daily Market update & Focuslist - 03/16
Time to switch our focus back to the long side...cautiously
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GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Price Action Analysis:
ES_F retested the 3898$ quickly this morning, only to snap back higher very strongly. We finished the day above the 3964$, the DTL, and the 21dma!
We still have a lot of work ahead of us, but that’s a very good initial thrust from support. Now we’ll have to see if we can follow through on that bounce in the coming days going into next week’s FED.
But, we were able to break all the important levels I wanted to see to get engaged back on the long side.
On the upside,
The current correction channel DTL will come into play tomorrow, along the important 4016$ level. Just above that, we also have the 50dma to watch closely.
On the downside,
The 3964$ level need to hold on a retest for this ST rally to stay alive.
NASDAQ (NQ_F) Daily
RUSSELL 2K (RTY_F) Daily
Alex’s TAKEAWAYS
The market continued to show constructive and even positive signs today.
ES_F reclaimed the 21dma on another push from the 3898$ level, and the market breadth is slowly improving without showing very high readings,
However, we saw a clear broader participation today, as noted by the equally weighted NQ chart. We see a sharp character change today as it broke above all kma’s and the recent base area. It was not quite as strong as NQ_F, but at least it was not only the mega-caps contributing to the market gains today.
We also have to note the U&R setup on the highest volume since Jan. 2022 today on RSP (S&P500 equally weighted)
So clearly, the broad market decided to catch up today, which is a very constructive sign.
We also saw the names I was watching from last night's Focuslist do very well overall (FSLY, COIN, ALGM, MBLY), breaking out pivots and closing above. This is a very constructive sign, along with seeing many quality long setups again tonight.
With NYSI still in a downtrend and many potential resistance levels above the indices, I remain cautious about engaging that market long. Still, I’m ready to test the waters carefully with progressive exposure as we have early signs of a potential rally underway.
One step at a time!
Market health & Trend indicators:
IT_SIGNAL: downtrend (red) + ABOVE 50dma = INTERMEDIATE-TERM UPTREND UNDER PRESSURE (🟨)
ST_SIGNAL: downtrend (red) + BELOW 10dma = SHORT-TERM DOWNTREND (🟥)
Tomorrow's economic news/events:
GAME PLAN:
Although I make my rules based on ES_F, in that model, I have to use SPY as my proxy for my formulas, so as SPY did not close above the 21dma, I am still at 0% exposure allowed instead of 20% based on ES_F
Tomorrow, I will look to follow my progressive exposure with only an additional 10% exposure and see if we can follow through and build a good cushion before considering adding anything else. With the market ahead, I don’t plan to go beyond 20% exposure tomorrow.
This market is still very news-driven, so we have to build exposure cautiously.
FOCUSLIST (LONG)
FTAI 25.16, MPWR 506.16, LSCC 93.35, ON 82.75, MELI 1223, FSLR 209.23, OKTA 86.24, INDI 10.7, ZETA 10.6, IOT 19.82,
FTAI (BO50PB) - Alert: 25.16, SL: 23.25 / LOD
We reclaimed all kma’s and the recent base area. We just made higher lows at the 50dma, and I would look at the recent swing high pivot for an entry.
MPWR (BORL) - Alert: 506.16, SL: 471.31 / LOD
A semiconductor name that showed a lot of RS in early Feb before consolidating very well around the 21dma and above the earnings gap. I like how we made three higher lows before reclaiming all kma’s. I would look at my prior entry pivot at 506.16$ for an entry.
LSCC (BREAKOUT) - Alert: 93.35, SL: 87.7 / LOD
Another semiconductor name bounces well with an HL at the 21dma today. With today’s action, we also retested the recent DTL to confirm the recent breakout.
ON (BORL) - Alert: 82.75, SL: 77 / LOD
A semiconductor name (you have many choices ;)) that held the multi-month base area on this current pullback and bounced back above all kma’s today. I am watching the DTL as an early entry or the recent swing high pivot.
MELI (BREAKOUT) - Alert: 1223, SL: 1173 / LOD
A recent leading stock is setting up for a classic base breakout. Solid fundamentals and RS in the last few weeks.
FSLR (BO10PB) - Alert: 209.23, SL: 199.37 / LOD
Despite the solar sector being week, it showed support in a key support area. So if we follow through on TAN, I would be interested in this channel breakout at the 10dma in the current sector leader.
OKTA (BORL) - Alert: 86.24, SL: 81.11 / LOD
Retest the base area and PEG high. I will look at the DTL for an anticipation entry or the 86.24$ pivot.
INDI (BO21PB) - Alert: 10.7, SL: 10.06 / LOD
Another semis name that showed impressive action following the last earnings. We pulled back to the 21dma on a higher low and are now above all kma’s. I will watch the DTL for an early entry, or the 10.7$ pivot for more confirmation.
ZETA (BORL) - Alert: 10.6, SL: 10.04 / LOD
A software name that I have been watching for a while just retested the recent base area on the PB and almost broke the channel DTL today. I will watch the recent swing high pivot for an entry.
IOT (BO21PB) - Alert: 19.82, SL: 18.54 / LOD
Recent earnings winner working on a 10/21dma pullback on low volume. I like how we build above the PEG low pivot and above the 21dma.
INDICES TRADES (SPXL/SPXS)
No trades are planned.
PORTFOLIO UPDATE
Considering today’s price action that I liked, I decided to test the waters with one of the names I included in the Focuslist-ish of last night. GLBE. Let’s see if it sticks.
INTRADAY/CLOSED TRADES:
SECTORS PERFORMANCE
Leading sectors:
SMH Semiconductors
This was the big move I was waiting for in the semiconductors. Seeing the multi-week wedge DTL breakout on 2x average volume is very constructive for the overall market. Let’s see if we can follow through now.
XLF Financial
Follow through on the 31.17$ level again today with a higher high. We still closed just below the 5dma.
TAN Solar
Still, in a solid downtrend below all kma’s, this 71.71$ support area is holding strong today. I need to see a follow-through higher now.
XBI Biotech
We reclaimed the 5dma and 78.09$ level today while making a higher low. Constructive, but still a downtrend.
XLE Energy
We held the 76/78$ support area today. Still below 5dma and strong downtrend.
XME Metals & Mining
48.75$ level was held again today. We are still below the 5dma and have a strong downtrend. Can we follow through?
XRT Retail
Follow through on yesterday’s bounce, but unable to break decisively the 5dma.
IGV Software
A Leading sector like SMH, we reclaimed all kma’s, the recent structure area, and closed above the current correction DTL. It’s a very strong action and constructive for the market. Now we need to follow-through.
MARKET BREADTH & INTERNALS
$NYHL (Cumulative new 52W Highs/Lows & 50dma)
Almost touching the 50dma. As NNH tend to lag by 1-2 a market bounce, we shall see tomorrow or Monday if we can turn positive here.
IT_SIGNAL: downtrend (red) + ABOVE 50dma = INTERMEDIATE-TERM UPTREND UNDER PRESSURE (🟨)
$NYSI (McClellan summation index & 10dma)
We begin to slow down, but not curved higher yet. We’ll need probably 1/2 very strong breadth thrust to turn in back black.
ST_SIGNAL: downtrend (red) + BELOW 10dma = SHORT-TERM DOWNTREND (🟥)
$NYMO (McClellan Oscillator - Breadth extensions)
A big push today, now at -46. We now have a HH & HL = uptrend.
NNL decreasing today.
1500 breadth thrust today. Not exceptional, let’s see if we can improve in the next days if we follow through.
$NYA200R (Stocks > 200dma - LT breadth)
double bottom
$NYA50R (Stocks > 50dma - MT breadth)
LL and still LH, we need to break that last high.
$NYA20R (Stocks > 20dma - ST breadth)
We now have a HH & HL = uptrend.
Another big rejection today as we now close below the 5/10dma for the first time. This recent action look really toppy, but we’ll have to see if we bounce or follow through.
Holding kma’s.
Big 1.59/1.60 area rejection. This is very constructive but we need to see a follow through, not a bounce.
Holding the 3.40/3.50% support area.
ECONOMIC & EARNINGS CALENDAR
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
LEADERS LIST
Overall leaders (PRIME Score)
ALGM,IOT,FSLY,AEHR,INDI,ELF,MELI,FOUR,LSCC,PANW,LNTH,BOWL,DKNG,SMCI,CARG,ASAN,RBLX,OKTA,MPWR,PATH,
Fundamental leaders (FA Score)
FRO,EURN,ALB,INSW,CALM,ASC,ELF,DHT,CPRX,MUR,H,PANW,HIMS,ALGM,LTHM,FTAI,AEHR,ARRY,AGNC,STNG,
Technical leaders (TA Score)
IOT,FSLY,ALGM,BBIO,FTAI,INDI,RBLX,ASAN,MELI,FOUR,CRM,LSCC,AEHR,LNTH,HIMS,OKTA,MBLY,FLYW,ELF,DKNG,
Relative Strength 1 Month (1M-RS)
ASAN,IOT,LNTH,BBIO,SRPT,FLYW,CRWD,FOUR,OKTA,MELI,INDI,BOWL,DKNG,PANW,SMCI,FTAI,GPK,CUBE,CARG,TTWO,
Relative Strength 3 Month (3M-RS)
COIN,FSLY,RBLX,ASAN,DKNG,ALGM,IOT,INDI,BBIO,LNTH,FTAI,HIMS,CRM,MELI,GLBE,AEHR,APP,MPWR,PATH,ELF,
Relative Strength 6 Month (6M-RS)
ALGM,AEHR,RXDX,FSLY,ELF,LSCC,HIMS,OII,NINE,IOT,FTAI,AIMC,PARR,SMCI,PRTA,MBLY,TEX,FOUR,BLDR,ASC,
REFERENCES
Articles on the system:
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