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MARKET REVIEW
Russel 2K (RTY) Daily:
Russel 2K (RTY) Intraday:
The market came to retest yesterday’s high right before the open but was not able to stay above and sold off right away and never looked back before finding some support at the 1846$ level I am talking about for a few days now. This was the measured move of the first leg down. We also rejected the 5& 50dma on that retest. and are now below all kma’s.
Now, this could be a potential bounce area, I don’t know yet but we’ll get more information tomorrow as the market open.
What are the levels I’m watching on RUSSEL tomorrow?
On the upside, I want to first see a reclaim of yesterday’s low @ 1872$, then if we really bounce the 1904$ is still a level of interest for more upside confirmation.
On the downside, On the downside, the 1800$ area from the prior base top in June/July will be an important area in the next day/days if we break that 1846$ish support area we just bounce EOD. That’s a 2.8% move from today’s close.
MARKET BREADTH
NYHL (New 52W Highs - Lows) - NNH continues to accelerate on the downside with a -134 reading today. Far from extreme, but still negative and picking up.
NYAD (Net Adv/Decl) - -1849 reading with an worst reading than yesterday, but still not extreme.
MMFI (Stocks > 50dma) - Another good move down now in the potential support zone of 50%. We either bounce here or we continue down around the 35% area.
MMTW (Stocks > 20dma) - Continuing down on the shorter term indicator here. I think we have some more room on the downside until we get into that 10ish area.
MCOSINYA (McClellan Oscillator) - Another tool I like to use for a more short-term breadth and a potential reversal is the McClellan oscillator. We just printed the 2nd highest level of 2022. Meaning an ST bounce is very possible in the near term.
VIX - VIX really tried to spiked but was not able to breakout of yesterday’s high and closed unchanged. That’s a pretty important divergence considering the market was down 1.4% today.
DXY (US $) - US$ found support again in that resistance area. Not able to breakout or break down. We need more information here.
US10Y (US 10Y bond yield) - 10Y found support again in that resistance area. Not able to breakout or break down. We need more information here.
US2Y (US 2Y bond yield) - 2Y found support again in that resistance area. Not able to breakout or break down. We need more information here.
IEI/HYG (Credit Spread) - Credit Spread continues to spike after a retest of the support area this morning. This is concerning as this kind of power move is normally not a good thing for the market. I want to see cool off a bit…
BTC/USD (Bitcoin) - Was not able to bounce from the support area today and got rejected by the 5dma.
CL_F (Crude Oil) - BIG rejection at the 50dma and we closed right back below 95.05$ pivot and 91.69$ as well. Not the best setup for Crude Oil…
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
(SMH) Semis - Could not bounce from the support bottom area and we are now back in stage 1.
(TAN) Solar - We held an 83.30$ pivot and almost closed above the 21dma. Very strong action as it refuses to sell off.
(XBI) Biotech - Biotech got rejected by the 50dma today and close below it. We are approaching the big stage 1 support area. Ideally, we’ll have to bounce here.
(IGV) Software - Still in stage 1 base, but I found out about potential technical support on many of the sectors I watch tonight. Notice how we are RIGHT at the UTL from the lows… this could play out as potential support tomorrow, we’ll have to see.
(XLE) Energy - Got hit by Crude Oil & Nat gas weakness today. We are still only at the 10dma, so we’ll have to see if we hold or continue down tomorrow.
(XLF) Financial - Approaching stage 1 base support.
(FDN) Internet - Another name right at the UTL from the June lows. Interesting confluence with the stage 1 support bottom level as well.
(PBW) Clean Energy - Right back at the stage 1 base support & also the 50dma. Nice confluence of potential support here as well.
(XME) Metals & Mining - Metals got hit today as we sliced through the 21dma and close right at the 50dma.
(XRT) Retail - Back in stage 1. We retested the 50dma and rejected it.
Alex’s TAKEAWAYS:
I begin to see signs of a potential ST bottom taking place with the confluence of many things:
Some short-term breadth indicators are approaching or at extreme levels (stocks > 20dma, McClellan OSC)
VIX divergence today and was not able to make a new high with the market being down 1.4%
US$, 2Y & 10Y still not able to breakout
Crude Oil selling off and rejecting important resistance areas.
Many sectors are at potential technical support levels.
Some TML (of the FocusList) are holding very well key MA’S & levels.
Not saying that we are ripping higher at that was the low, but I am seeing some indications that we MIGHT have a potential ST bounce (1-2 days? who knows) in the next few days. If we are not able to hold & bounce here, we will likely be seeing more pain and selling pressure across the board.
DEFENSE, BUT STAY POSITIVE & OPEN🛡️
LEADERS LIST
Overall leaders (PRIME Score)
SWAV,STEM,CELH,CEIX,INSW,ARLP,CPRX,NFE,SMCI,HRB,XMTR,YPF,DK,AIV,CHS,PDD,DHT,CALM,ERF,WOLF,
Fundamental leaders (FA Score)
RES,AMR,HCC,DK,MRO,ERF,DVAX,MGM,DRH,TELL,LBRT,BHF,ENLC,SWAV,LC,TRGP,SLDP,WTI,MPC,FANG,
Technical leaders (TA Score)
CPRX,SWAV,BFLY,TH,RXRX,STEM,CEIX,AHT,VLD,SMCI,WOLF,MRSN,PLUG,CELH,ARLP,AEHR,HRB,AGEN,PDD,INSW,
Relative Strength 1 Month (1M-RS)
FUBO,YPF,AZUL,CPRX,VLD,FTCH,BFLY,RXRX,PDD,NU,LTHM,SWAV,WOLF,ARCH,PLUG,CRK,XMTR,LAZR,GLNG,ACVA,
Relative Strength 3 Month (3M-RS)
MRSN,TH,CPRX,AEHR,SWAV,BFLY,AHT,RXRX,AGEN,STEM,PRVA,VLD,WOLF,BEAM,ENPH,PLUG,HIMS,CELH,CCRN,GTLB,
Relative Strength 6 Month (6M-RS)
TH,MRSN,SIGA,CEIX,CPRX,STNG,SWAV,DCPH,ARLP,NFE,CRK,CVI,STEM,ENPH,PBF,HDSN,SMCI,HRB,PRVA,CELH,
PT PORTFOLIO UPDATE
Recent operations:
I added to my TZA trade this morning pre-market as we were failing on yesterday’s high breakout attempt. (Got up to around 50% position). I then started to scale out while we were in the 1850$ RTY area. I closed the day with only a 10% position as I was seeing this level as a potential support area.
I also closed my LTHM runner this morning as we were getting at the 10dma, but I reopened it EOD as it was a mistake to close it before a clear break of that moving average before EOD.
I then added the XMTR position as the market was trying to bounce and it got through the entry pivot I shared last night. Only a 1/2 position as I’m counter-trend with the market.
Tomorrow’s game plan:
Tomorrow I will first assess if we really are able to bounce from that area or not. If we do, I’m interested to get involved in potential 1-2 high conviction names but really building on my profits. If it doesn’t work right away, I will scale back the exposure. It’s a market to keep stop-loss very small to survive fakeouts at pivot breakout.
Alex’s FOCUSLIST
A name that I still have a position and I will be looking to add a larger swing trade if we can bounce from that ATH base area and the 21dma. I like how the selling volume is declining in the last 3 days. I will be looking for a reclaim of the support area top for an entry.
Alert - 109.74$
LTHM 0.00%↑ 🎖️
Held the 10dma again today and closed in the upper half of the daily range. We are still working in that mini-channel and also the second time we are retesting the 31.53$ previous swing high, creating my BORS setup. I would use the DTL or 33.48$ pivot for entry confirmation.
Alert - 33.48$ + DTL
STEM 0.00%↑ 🎖️
Another high potential name that I have a high interest in. We are building that flag near perfecting during that market selloff, look how we held the rising 21dma, made higher lows, and price action getting super tight. Let me repeat myself…I really like this name and this will probably be the only one on which I’ll use a stop order tomorrow.
Alert - 15.63$ + DTL
GTLB 0.00%↑ 🎖️
Another high potential name building a nice mini-channel formation right into previous base support while making higher lows also. I would look for a break of the DTL or yesterday’s high for an entry.
Alert - 64.80$ + DTL
ENPH 0.00%↑ 🎖️
The solar sector has been one of the strongest during this market pullback. ENPH held the 21dma so far and with very tight closing action in the last 2 days. We also made higher lows in that consolidation, another clear divergence from the market making a lower low. I would use the DTL or yesterday’s high pivot for an entry.
Alert - 295.80$ + DTL
A name that is simply drifting sideway since it broke that larger channel DTL 2w ago. It is in a strong sector and had a great run early in the year, so I know it can run well. If we can reclaim the 15.40$ recent swing high, that would confirm the WBPB setup.
UPDATE: found good support at the 21dma today.
Alert - 15.40$
A biotech name that I traded is setting up well for a potential breakout. We are consolidating since the powerful base breakout following ER. We held the 10dma in the entire consolidation and we are also building higher lows here.
Alert - 8.02$
After the initial base breakout run, we were straight back to test it. We were able to hold that support area, the 50dma, and build nice & tight action in the last few days and are now being squeezed right below the DTL. Note the higher lows here as well.
Alert - 26.09$ + DTL
🎖️ = Alex’s highest conviction setups
REFERENCES
Articles on my system:
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