Alex's daily Market Update & Focuslist - 09/21
Market is selling off on FOMC after a wild session!
Good evening folks! 👋
What we’ll cover in the Newsletter tonight:
General market analysis ($NQ/$ES)
Market Breadth & Internals
Economic Calendar
Sectors Review
Leaders list
Alex’s Portfolio update
Focuslist including setups, alert levels & explanation
If you have suggestions or feedback, you can leave a comment!
GENERAL MARKET ANALYSIS ($NQ/$ES)
NASDAQ ($NQ) Daily
Well, that was quite the day! Pretty uneventful this morning, until we got the Interest Rate Announcement & Press Conference following. We had big intraday swings following the meeting and even tried to breakout from the 10dma before rejecting it hard to finally close right in that support area just above the 11689$ pivot.
We now have broken down that area on the futures market as the market seems to want to go lower and test that previous June low. Might have a first potential support level @ 11534$, but if we can’t hold there, I think a retest of June low is very possible
$NQ levels on the upside
11689/11794$ area is now acting as potential resistance if we bounce tomorrow.
12017$ pivot, but that would be a very powerful bounce…
the 5dma is potential resistance
$NQ levels on the downside
11534$ is the next potential support
11285/11068$ area is the June low potential support area to watch for in the coming days IMO.
S&P500 ($ES) Daily
$ES levels on the upside
38553903$ area has now turned to potential resistance above
the 5dma is now potential resistance
$ES levels on the downside
3735/3780$ area is the next potential support
3639$ June low is a potentially very important level to retest.
MARKET BREADTH & INTERNALS
NYHL (New 52W Highs - Lows) - NNL pretty flat today @ 350.
NYAD (Net Adv/Decl) - Improved breadth today on a -1.75% down day… @ -1385
MMTH (Stocks > 200dma - LT breadth) - We have just broken out from the recent swing low pivot and important support area. @ 23%, we are far from being oversold. Room on the downside IMO.
MMFI (Stocks > 50dma - MT breadth) - Break below recent swing low pivot and broke recent support area. We have room on the downside here as well.
MMTW (Stocks > 20dma - ST breadth) - ST breadth is at the recent swing low pivot and above the potential oversold support area. There is definitely some room on the downside here as well…
MCOSINYA (McClellan Oscillator) - McClellan @ -237. There is still room before getting oversold around 300.
VIX - VIX with a WILD day today… We were from 25 up to 30 and closed unchanged just above the 27.67$ pivot I was looking for a while as being a trigger point for playing the short side. Still a breakout.
PCCE (PUT/CALL EQUITY RATIO) - 0.921
DXY (US $) - US$ is at new highs and follow-through after yesterday's 109.97$ pivot breakout. A 1% move is a very big move here... Highest since ‘00/’02 period…
US10Y (US 10Y bond yield) - 10Y with a UTL rejection today, but we are still above the 5dma and base top area.
IEI/HYG (Credit Spread) - Credit Spread not looking good with a support area, UTL & kma’s bounce today. Looks more & more like a wedge with a potential breakout tomorrow. Could get ugly if this one breakout on volume.
BTC/USD (Bitcoin) - From failed moves, come fast moves. #BTC ...buckle up. Everything is possible, but right now the trend is down and we had this big rally attempt to support top-level & 10dma that failed really aggressively EOD. We made a new lower low after-hours here as well…
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
Leading sectors (monthly top 5):
(XLE) Energy - Tried to gap up above the stage 1 base & all kma’s…but closed below everything by EOD… That’s a 2nd 50dma rejection.
(TAN) Solar - Keep in mind that it was the leading sector for a few weeks now… We have an undercut of the 50dma on day 1 (yesterday), and failed the reclaim today... this is not looking good. We also rejected the 83.30$ pivot.
(PBW) Clean Energy - Same here, tried to reclaim kma’s and the stage 1 base area but got rejected and closed below yesterday’s low. This is not looking good here as well.
(PEJ) Leisure & Ent. - That’s a pretty impressive cut through the stage 1 base on HUGE volume in a recent leading sector…
(XBI) Biotech - Another failed attempt to bounce from a stage 1 base area…for another leading sector, this is really weak action.
(SMH) Semiconductors - I added SMH today as this was at a very important support area, the stage 1 bottom base area. We tried to bounce and got rejected very hard by the 10dma ON VOLUME. This is a real red flag to me. This is really ugly action on a big sector like the semi’s. Might go back into stage 4 if we follow through tomorrow.
Alex’s TAKEAWAYS:
I’ll try to not be too bearish tonight… but things are not looking that great let’s be honest.
Indices trying to bounce and got rejected very hard at the 10dma after FOMC.
Indices losing key support areas.
ST/MT/LT breadth is not oversold and there is still room on the downside IMO
DXY/bonds yields are at records levels
Crypto is breaking down
The only leading sectors that were still holding, broke today (TAN, XLE, PBW, PEJ, etc)
Potential TMLs that were very close to breakout to new high rejected levels and look like potential short setups right now.
All that being said… I know that we are still -6.5% below the 50dma and we are approaching a possible oversold extension territory. While I play the downside and think we have some room to go, I remain always open to switching my mind/positions if we reclaim the key areas we just broke.
DEFENSE, BUT STAY POSITIVE & OPEN…THIS BEAR MARKET WILL END AT SOME POINT (RIGHT?😥)🛡️
LEADERS LIST
Overall leaders (PRIME Score)
INSW,STEM,YPF,AEHR,XMTR,LTHM,EURN,NAT,ENPH,CCRN,DHT,FRO,SPWR,CELH,DCPH,ELF,RVNC,WOLF,CALM,SWAV,
Fundamental leaders (FA Score)
AMR,HCC,DK,MRO,ERF,DVAX,MGM,DRH,TELL,LBRT,BHF,ENLC,SWAV,TRGP,WTI,MPC,FANG,KOS,ARCH,CALM,
Technical leaders (TA Score)
YPF,INSW,XMTR,NAT,STEM,RVNC,ENPH,EURN,DHT,FRO,DCPH,VLD,SPWR,CCRN,AEHR,LTHM,WOLF,ELF,GERN,CELH,
Relative Strength 1 Month (1M-RS)
AVYA,YPF,XMTR,NAT,RVNC,AMRS,KNBE,CCRN,LTHM,BVN,INSW,CCJ,SQM,RCL,STEM,NCLH,DCPH,SPWR,SG,FRO,
Relative Strength 3 Month (3M-RS)
VLD,TH,AEHR,STEM,GERN,YPF,RXDX,WOLF,CPRX,RVNC,CELH,APDN,INSW,XMTR,NAT,AMRS,IS,FUBO,MARA,SWAV,
Relative Strength 6 Month (6M-RS)
TH,GERN,INSW,STNG,DCPH,XMTR,NAT,CEIX,CRK,STKL,CELH,EURN,HRB,SWIR,YPF,ENPH,MRSN,ARLP,CPRX,STEM,
PT PORTFOLIO UPDATE
Position management GAMEPLAN:
Position size: 1/4 positions max (5% of equity)
Position management
First trim: sell 25% initial position
Trim @ first day EOD
SL moved @ breakeven
2nd trim: sell 25% initial position - 10dma EOD break
3rd trim: sell 50% initial position - 21dma EOD break
Scale-out approach
Alex’s FOCUSLIST
No FOCUSLIST tonight… there are absolutely no potential & good RR setups right now and that’s a first for a while... that’s a sign.
Let’s manage the SQQQ position, and if the market bounce and some names that are still above 10/21dma reverse that FOMC move, then we’ll be ready for Friday. But this is not worth the risk to play individual names on the long side tomorrow.
That being said, one potential setup I’ll be looking closely at is to add to my current SQQQ position on a bounce or retest of the prior support area that we broke and that just flipped to resistance.
So, a retest of the 11689/11794$ area will be a short BORS setup for me tomorrow, and I will add it to my current SQQQ position on a reversal or lower high.
🎖️ = Alex’s highest conviction setups
NOTE: I have the discipline to build a detailed FocusList each night, but I want to emphasize that I DON’T take all the trades that would trigger their entry. Some reasons to take a specific position over another, or not take any trade even if the alert is activated, are:
The general market price action
My Market-Based exposure model
My Portfolio-based exposure model (progressive exposure)
A high conviction setup
Price action around the entry pivot
Then even if I take a trade at the entry pivot, I will very often sell it right away if the market roll over or the stock is backing out of the gate. I prefer to re-enter on the entry pivot reclaim than to be stuck with a larger loss. Please study closely all my education articles to learn how I handle trades around these entry pivots.
Want to know how to execute these setups?
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