Alex's daily Market update & Focuslist - 01/17
The pullback continued for the 6th day, as the market tried to bounce from key levels.
Good evening!
The selling continued today, but the market found good support where it had to and closed strong. We also saw levels being defended in many tech stocks and some decoupling in the strongest & leading names. Lot of hammer candles today.
With the short-term breadth & momentum being even more oversold (stocks > 5dma joining the 5/10-day ratio) and the six straight negative days in a row (broad market), the probability of a bounce is getting higher and higher each day.
Where that bounce will lead, I have no idea, and we’ll have to see what the reaction is and how the stress test is handled on the above resistance retest before having more clues if it’s a minor pullback & digestion…or the start of a more significant correction.
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 + Takeaways
PTMM is on a RED market signal (🟥)
Key Takeaways:
Another wide selling day, but with very low momentum (-3.8%)
6th straight red day. (That's a long streak)
Still NNH
Could not reclaim the 21dma, and now getting close to the 50dma
5 day ratio is getting more oversold and now at 0.3.
10 day ratio hooked up today with the good close
Overall, we still remain on a confirmed uptrend with the 10>21dma, but with the current oversold condition and 6 straight down days in a row, I continue expect a technical bounce soon. With strong close and intraday breakout, could this be tomorrow?
PrimeTrading is a community dedicated to equity swing trading, providing a collaborative environment for learning and active trading alongside seasoned and knowledgeable traders.
Enhance your skills as a trader by adopting a risk management-centric approach, working closely with me in real-time throughout the intraday trading sessions.
✅ Intraday Live Execution of My Trades
Experience & learn of live intraday trading as I share real-time insights into my execution process. Witness the decision-making, strategies, and nuances that drive success in the fast-paced world of intraday trading.
✅ Alex's Daily Market Wisdom, Portfolio Updates, and FocusList
Access exclusive daily market commentary, portfolio updates, and the intricately curated FocusList from Alex. Gain valuable insights into market trends, trade executions, and the strategic decisions influencing the portfolio.
✅ Sharing & Refining Trade Ideas with an Exceptional Group
Engage in a vibrant community where like-minded traders collaborate to share, discuss, and refine potential trade ideas. Leverage collective intelligence, diverse perspectives, and collaborative efforts to enhance your trading strategy.
✅ Beyond Markets: Unveiling Macroeconomics, Cryptocurrencies, and More
Explore broader discussions beyond traditional markets, including macroeconomics, cryptocurrencies, and other pertinent topics shaping the financial landscape. Stay informed on diverse market dynamics and emerging trends.
✅ Mastering the Mind: Delving into the Mental Game & Psychology of Trading
Gain insights into the psychological aspects of trading. Delve into discussions that address the mental challenges, mindset shifts, and strategies to cultivate resilience and success in the ever-evolving world of trading.
✅ Learn from the Best: Education & Mentorship by Alex & Pro Traders
Immerse yourself in a comprehensive learning experience with educational content and mentorship sessions led by Alex and other seasoned traders. Acquire the knowledge and skills necessary to navigate various market conditions successfully.
✅ Interactive Exploration: Q&A Zoom Meetings for Dynamic Learning
Participate in interactive Q&A Zoom meetings designed for dynamic learning. Pose questions, engage in discussions, and benefit from real-time insights, creating an enriching and collaborative learning environment.
Alex 🛡️✌️
GENERAL MARKET ANALYSIS
S&P500 (ES_F)
ES was able to hold above the 4767$ pivot and 21dma today after a potential shakeout.
We’ll want to see this area hold tomorrow and ideally see a push higher with breadth & momentum expending.
Daily, we still have our two very key pivots to work with:
4830$ for a new high and continuation of the uptrend
4767$ breakdown for a rollover and potential 2nd leg down of that pullback.
These two levels will be my barometer for the ST direction of the market.
NASDAQ (NQ_F)
NQ was the strongest today due to tech & mega-caps leadership. We made a potential shakeout below the 16753$ level & 21dma. If buyers were stepping back in, this might have been the shakeout needed to make a breakout attempt.
It's hard to be bearish with that daily/weekly NQ chart.
RUSSELL 2K (RTY_F)
We found support right at the 50dma & 50dma today. It is a potential support area, and considering the ST oversold breadth, if we hold that area tomorrow, we could see a push higher, at least to retest the recent structure & 21dma.
Market Internals
Market Breadth & Extension (Stocks > 5, 20,50 & 200dma - short to long term view)
ST breadth getting right in that buy zone
MT/LT breadth still elevated & extended
14.49$ level breakout. Does it sound like the pullback low or something deeper & more serious is starting? That’s a sign of caution.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
Downtrend.
10Y Bond Yields (daily)
US dollar index (DXY)
Good reversal today.
Still below all kma’s - no red flag.
BTC/USD (Bitcoin)
Tight flag for short-term direction.
SECTORS & THEMES ANALYSIS
Wide but light red day
Mega/Large continue to lead, but riskier stuff are getting pretty extended
Healthcare, Financial, Tech, Comm services showed good RS today
Leading themes charts (w/ pivots):
1 Uranium URA
Natural reaction after that violent breakout and being extended.
2 Software IGV
Strong hammer bar on the 21dma retest & initial base level rejection. Natural reaction and I like how aggressively it has been bought. Software should be a focus.
3 Semiconductors SMH
Same thing here. Solid 21dma retest & bounce with a close at the highs just below the base level.
4 Cloud Computing SKYY
Another strong hammer at the 21dma and close at the highs.
5 Cybersecurity CIBR
It has been bought aggressively on the base-level retest. That’s what we wanted to see.
6 Internet PNQI
You get the theme…
7 Cancer CNCR
21dma pullback in that tight channel.
8 Homebuilders XHB
21dma & pivot retest again today.
9 Artificial Intelligence & Technology AIQ
Strong action at the pivot, but couldn’t close above the 21dma. Feel like the theme is really lagging NVDA here.
10 Property & Casualty Insurance KBWP
Sectors & Themes ideas (weekly):
From the weekly charts, we might see a big week for Tech. Cyber, Software, Cloud, Semis, Internet, and potential continuation in Uranium, Gaming/Sports & insurance.
CNCR/Biotech seems tired & extended.
That's the charts we want to see with key & strong 10wma bounce in tech last week.
FOCUSLIST
BLDR daily/W/65m - BUILDERS FIRSTSOURCE, INC. - Alert: 166.01, SL: 162.13
Still setting up for that 21pb setup inside that tight wedge that we tried to breakout at the close. Looks even better with today's action.
FSLY daily/W/65m - FASTLY, INC. - Alert: 17.81, SL: 16.93
Setup is still valid from last night’s FL. Good RS and still building well. I’m in the trade.
STNE daily/W/65m - STONECO LTD. - Alert: 17.93, SL: 17.17
Still like this setup, but closed it for exposure reasons. We built an inside day and retested the 21dma as we're trying to build the right side with good RS.
APP daily/W/65m - APPLOVIN CORPORATION - Alert: 41.16, SL: 39.43
Standout RS of the last week. After last week tight channel breakout at the base bottom level, we might have completed the WBPB setup as we retested the kma's and first natural PB following the breakout. We are still in that 20-week base as we surf above the 30wma and keep making higher lows on the weekly chart. Good looking setup.
ARM daily/W/65m - ARM HOLDINGS PLC - Alert: 70.11, SL: 66.66
Recent IPO that is building a wedge right at the IPO high level. We are contracting since Dec. high, and just made a potential higher low and 21dma reclaim today with the strong close.
MNDY daily/W/65m - MONDAY.COM LTD - Alert: 195.14, SL: 186.1
We are still digesting the failed multi-month base breakout & reclaim, as we are retesting the 21dma & base level on low volume and in a tight channel in the last few days. Solid action and respecting structure very well here.
SCANS
21dma pullback scan
INSM RNG MKSI STNE S TEAM WAL AEO CUK GLBE JWN MAC MNDY RYTM APP MLTX SMCI TRIP SIRI TDW TMDX FOUR CRNX
50dma pullback scan
CUK CRDO SIRI
Pullback-tight scan
LBTYK CBAY MKSI TEAM WAL XENE JWN MAC RYTM MLTX CRNX
Continuation breakout scan
None
Bigger the base, higher in space scan
INSM DBRG GLBE APP IOT TDW MDB FSLY
PORTFOLIO UPDATE
PF felt some pressure again today, with CLVT XBI & FRSH being stopped at the open.
I decided to close STNE EOD for exposure reasons
Trimmed INSW at 5R(ish) and is now on the runner
Tried BLDR this morning but failed
+0.05%ec on new exposure, and -1.5%ec total.
Once again, the 5&10-day ratio and stocks < 5dma are oversold after 6straight selling days in a row; that's why I am looking to open up exposure like I did in the first week of January. I'm trying to play the technical bounce in STILL a confirmed uptrend.
INTRADAY/CLOSED TRADES:
Important economic news/events (weekly)
REFERENCES
I really hope that you enjoyed it. If you did, please share it & hit the LIKE button so that more folks can be reached and this Newsletter can grow. :)