Alex's daily Market update & Focuslist - 10/02
New added content - Access to my PT model spreadsheet in the newsletter!
Good evening traders! 👋
What we’ll cover in the Newsletter tonight:
General market analysis ($NQ/$ES levels)
Market Breadth & Internals
Prime Model spreadsheet (PT_database)
Economic Calendar
Sectors Review
Leaders list
Alex’s Portfolio update
Focuslist including setups, alert levels & explanation
GENERAL MARKET ANALYSIS ($NQ/$ES levels)
NASDAQ ($NQ) Weekly
NASDAQ ($NQ) Daily
We tried to reclaim the 5dma & the 11285$ level again on Friday, before closing the day very weak at the lows of the day and also finally undercutting the 11068$ June lows. This is a pretty big deal…
The market is then at a new low in this bear market, which opens the door to more downside in the coming days/weeks IMO. The worst is that we’ve made this market new low on an oversold breadth condition, so it means that the market IS REALLY weak and could really melt down from here.
We’ll continue to monitor the potential support areas/levels from 2020, the action around kma’s, and also if we follow through on that breakdown or if it’s a shakeout that we are seeing right now. As usual, open to any scenario!
$NQ levels on the upside
11068$ level (June low level)
11229$ previous swing low pivot
11534$ level (June structure)
the 5dma
$NQ levels on the downside
10845/10942$ area is the next potential support if we break below June’s low
10656$ (Sept. 2020 structure)
S&P500 ($ES) Weekly
S&P500 ($ES) Daily
$ES levels on the upside
3735/3780$ area is now the most important resistance above
the 5dma
$ES levels on the downside
3596$ level (2020 structure)
3509$ level (2020 structure)
3388$ level (2020 structure)
MARKET BREADTH & INTERNALS
NYHL (New 52W Highs - Lows) - Interesting divergence as we’ve improved on the NNL here @ -481 while NQ was down 1.75% Friday.
NYAD (Net Adv/Decl) - Interesting divergence here as well as we’ve improved on the declines here @ -437 while NQ was down 1.75% Friday.
20dma @ 549 (⬆️)
MMTH (Stocks > 200dma - LT breadth) - Tried to reclaim the 18.16 level but was rejected with the market. Not the best action, but still above the support area.
MMFI (Stocks > 50dma - MT breadth) - Tried to reclaim the 5dma, but got rejected to finally close below the 12.03$ level.
MMTW (Stocks > 20dma - ST breadth) - Bit support area reclaim attempt, only to close red…that’s a very big rejection at a key level. Not the type of action I like to see.
MCOSINYA (McClellan Oscillator) - Small improvement, but still pretty flat @ -212
VIX - Wild day on the VIX as we were down and even undercut Friday’s low and below 30$, before bouncing pretty hard to close the day with a 32.21$ reclaim in the last minutes of the trading session. Overall a flat day with wide swings.
PCCE (PUT/CALL EQUITY RATIO) - 0.933
DXY (US $) - US$ bounced from the 10dma Friday, not the strongest action, but just the fact that we closed green after nasty candle on Thursday, that’s a good reversal. We’ll have to monitor this one closely as we know that the inverse correlation between DXY & NQ was pretty strong in the last weeks.
US10Y (US 10Y bond yield) - Bond yield doesn’t look too much like topping right now with the 2 last trading days. We tried to undercut the 10dma, but quickly found support and bounced higher to close the day above the recent channel UTL and also the 10&5dma..
IEI/HYG (Credit Spread) - Credit Spread retested the 1.59 level again on Friday, only to reject it once again. Credit spreads usually warn of something more serious happening in the market. This kind of base breakout would normally be a long setup I would take on individual names…so I think the probability of something more serious in the market begins to be anticipated.
BTC/USD (Bitcoin) - BTC is still very weak on every bounce and I see a lower high on the last bounce attempt. So far it’s still a no man’s land to me until we break either side of that support area.
PRIME Model spreadsheet (PT_database)
In the last few years, I've developed a model based largely on #CANSLIM fundamentals characteristics to focus on the best stocks. Not having the money to afford a #MarketSmith sub at the time, I built my own fundamental & technical scoring system into an Excel spreadsheet
PRIME Model explained
Starting from today, that's something that I will share daily here as added content to the paid part of the newsletter. So make sure to subscribe if you want to get that access on a daily basis!
Free access to my PT_database 👇
Use wisely, and enjoy!
This was a FREE preview of my daily Market update & Focuslist letter. In the following sections, I’ll cover important parts of my daily routine & preparation for tomorrow’s trading day that you don’t want to miss!
Economic Calendar
Sectors Review
Leaders list
Alex’s Portfolio update
Focuslist including setups, alert levels & explanation
If you care to read about 5 such posts every week, then subscribe below to join the PrimeTrading community!
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
Sectors Relative Strength - Weekly (RS vs SPY)
Top 3 : XLE - XBI - XME
Monthly:
Top 3: XLV - XBI - XLF
(XBI) Biotech - Tried to breakout of the mini-channel DTL on Friday and even reclaim the recent support area and the 21dma…but faded EOD with the market and closed barely green below all kma’s. No the breakout you want to see…
(XLE) Energy - Flat day, still showing a lot of RS above the stage 3 base support area.
(XME) Metals & Mining - Was a leading sectors of the past week, but still looks like a bear flat to me with a retest of the 44.15 previous swing low pivot and kma’s rejection. Very likely we go down and probably retest the lows.
(XLV) Health Care - Same type of action here as we retested the stage 3 base area. Retest of the 123.90 recent swing low pivot and 10dma with a rejected Thursday/Friday. Likely going into stage 4 and a retest of June low.
(IGV) Software - Another bear flag chart with a stage 1 base area retest and rejection. UTL breakout on Friday, so it’s back in stage 4 IMO
(TAN) Solar - One of the recent leader sectors, but now lagging a bit expect for Friday that we were in the leaders. I see a retest of the previous swing low and stage 1 top base area retest & rejection here as well. Not looking too good.
Alex’s TAKEAWAYS:
We have officially broken below June lows on $NQ and the market continues to slice through support levels on volume like it is butter. All that while being oversold. We are experiencing a very weak market along with an elevated VIX.
I stay always open for a reclaim of 11068$ level to create a shakeout or U&R setup, but right now that market has everything to prove before I get engaged again.
For now, the trend is DOWN, we’re below all kma’s and this is a RISK-OFF market for me.
Always stay open, but do not anticipate!
LEADERS LIST
Overall leaders (PRIME Score)
INSW,XMTR,YPF,AEHR,TH,RVNC,WFRD,CCRN,SG,DCPH,LTHM,HLIT,STEM,STNG,AVDX,RIOT,RXDX,WTI,RELY,SPWR,
Fundamental leaders (FA Score)
AMR,HCC,DK,MRO,ERF,DVAX,MGM,DRH,TELL,LBRT,BHF,ENLC,SWAV,TRGP,WTI,HLIT,MPC,FANG,KOS,ARCH,
Technical leaders (TA Score)
RVNC,INSW,XMTR,YPF,DCPH,WFRD,TH,AEHR,SG,RIOT,CCRN,RXDX,RELY,SPWR,ZETA,AMRS,STEM,MARA,LTHM,HLIT,
Relative Strength 1 Month (1M-RS)
RVNC,BVN,NAT,FUBO,XMTR,INSW,MRVI,CALM,SPWR,ADT,WFRD,AMRS,YPF,RIOT,DHT,AGL,BHC,CCRN,ALB,MNDY,
Relative Strength 3 Month (3M-RS)
VLD,TH,RXDX,AEHR,MARA,RVNC,YPF,STEM,CPRX,XMTR,INSW,RIOT,WOLF,IEA,BFLY,ZETA,SG,PAYO,HLIT,AMRS,
Relative Strength 6 Month (6M-RS)
TH,VLD,RXDX,INSW,AEHR,CPRX,RVNC,DCPH,XMTR,STNG,YPF,STEM,SWIR,CEIX,MRSN,ARRY,GERN,HLIT,CELH,PAYO,
PT PORTFOLIO UPDATE
Position management GAMEPLAN:
Position size: 1/2 positions max (10% of equity)
Position management
First trim: sell 50% initial position
Trim @ first day EOD
SL moved @ breakeven
2nd trim: sell 25% initial position - 10dma EOD break
3rd trim: sell 25% initial position - 21dma EOD break
Scale-out approach
Alex’s FOCUSLIST
XMTR 59.19, TH 13.03, INSW 35.58
A stock that I had but closed Monday on failed reclaim. I like that we found support at the recent base support area & 21dma. I would look at that 59.84$ pivot for a re-entry.
UPDATE: Tried to reclaim all kma’s on Friday, but faded back with the market EOD.
Entry: breakout high pivot @ 59.19$
TH 0.00%↑ 🎖️
A name that I tried to position a couple of times before the market sold off. I like the 200% move from the lows, and how we held the recent consolidation structure along the 50dma while the market was losing his S**. I am seeing a DTL breakout for a possible lower entry in the base.
UPDATE: I tried to play the DTL & 12.56 breakout Friday, but only treated it as a day trade, especially with the market weakness & game plan. We did close above the DTL & 12.56 pivot, so I’ll still be looking at a breakout of 13.03 recent swing high pivot.
Entry: recent swing high pivot @ 13.03$
INSW 0.00%↑ 🎖️
One of the best performers of the last few weeks is setting up and digesting his recent gains. We tested back the 21dma on Friday and we are building that channel.
UPDATE: Really like this one… incredible strength in the last few weeks and now not even able to close below the 10dma. I like that we closed right below the entry pivot and not squatted much.
Entry: recent swing high pivot @ 35.58$
🎖️ = 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 & trade side by side with me?
The PrimeTrading community is getting bigger & bigger on DISCORD! 🗨️
We are now over 100 traders in the DISCORD channel, for:
Getting my own trades & market commentary live
Education & mentoring
Discuss trade ideas with a like-minded community
Macro Economy, Crypto & more!
Staying on the right side of the market with a risk management approach first.
REFERENCES
Articles on the system:
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. :)