Good evening folks,
I really really hope that you were able to protect yourself today after seeing the clues that were presented to us by Mr. Market last night.
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MARKET REVIEW
Well that was quite the day!
Market weakness & selling continued today following false breakout of 1888$ pivot yesterday.
We also confirmed my most bearish scenario I laid out last night, as we broke below 1848$ pivot and are now below all kma’s. We also broke the UTL from May 12th low, which is honestly a pretty big deal as well.
BUT, keep in mind that tomorrow CPI data release at 8:30 EST WILL move the market. Which side? I don’t know yet. But I will make damn sure to be ready for both outcome.
Bullish scenario:
For me to look at a bullish scenario, it will take at least a retake of 1848$ and probably closing near the 50dma. If we get a good CPI print tomorrow, this could spark big buying as everyone has already priced in a bad one imo.
Bearish scenario:
A close below 1819$ will be important on the downside along staying below all kma’s. a big down move could even bring us back to 1779$ levels from May consolidation top. That’s a 2.7% move from where we are.
MARKET BREADTH
NET new 1M & 52W LOWS on the NYSE & NDX. That’s a change of character to take note.
McClellan unchanged today… that’s strange. Might be a data problem, I’ll check it out.
Stocks > 50dma continued to break lower pivots today. With the 38.46% level being taken out. Breadth is pulling back.
Big change of character on the VIX as well today. Breakout of the DTL, close above recent structure low and acted as a potential shakeout AND also close above important 25$ level. Will have to see after CPI where this goes.
ECONOMIC CALENDAR
Core CPI data tomorrow 8:30 EST. BE AWARE.
SECTORS PERFORMANCE
Well, red across the board. Let’s wait and see CPI tomorrow before making any conclusions.
Crude Oil (CL_F) A little pause for Oil today. Still above 5dma and looking strong. Nothing to worry.
NG_F (Natural Gas) Quite a reversal on the DTL & 21dma today. We were able to reclaim all kma’s and 8.91$ pivot on big volume. Tomorrow will tell us more on a potential direction.
PORTFOLIO UPDATE
Got good traction on my Short position today and decided to close a portion of my oversize position. See trade below.
New positions:
Trimmed positions:
TZA - Could have made more money out of this oversize position, but I thought we would range until CPI tomorrow, so when I saw that we came back into the wedge, I close down a good portion of my trade (52% to 21%) to be back to a normal position going into CPI with a cushion. Let’s say where it brings us, it’s now a stress free trade…and I like that very much :)
Closed positions:
DAILY FOCUSLIST
ZERO names in my FocusList tonight!
Sorry folks, tomorrow is CPI data that will have a big impact on market direction and we are also Friday…so I am not looking to open new trades going into the weekend.
If we get a big surprise, I might open a TNA position to get exposure to the market. But otherwise, I’ll stay with my TZA market short.
And honestly, after going through 130 charts, there is NOTHING showing a good R/R setup. I prefer keeping it real and than giving you low quality setups than might not help you in your process. When trend is down and there’s no setups and breakout are failing, it’s not a time to look to increase exposure.
I am still tracking Relative strength for potential TML winners out of this correction
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RELATIVE STRENGTH
I’ll start tracking top fundamental stocks with highest 6 months Relative Strength, holding up the best short term. (40% 1M-RS + 60% 6M-RS ratio).
During market correction, you want to keep track of these names as they will be the one to watch when conditions improves.
Relative Strength 40/60 - TOP 20:
SD,AR,CRK,PBF,CVI,ESTE,WTI,EQT,SWN,NINE,TALO,CPG,NOG,EGY,DINO,TWI,DK,BTU,HRB,RRC,
Relative Strength 1 Month - TOP 20:
LPI,BKSY,WTI,ESTE,CPG,ERF,PBF,CHPT,CDEV,GTLB,PRPL,NINE,SM,SD,CVI,NOG,SWAV,DO,MTDR,SWN,
REFERENCES
Articles on my system:
I really hope that you enjoyed. If you did, please share it so that more folks can be reached and this Newsletter can grow. :)