Alex's daily Market update & Focuslist - 10/27
$AAPL & $AMZN big earnings and ES_F rejection at the 50dma - will we rollover??
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GENERAL MARKET ANALYSIS ($NQ/$ES levels)
S&P500 ($ES) Daily
Today, We tried to reclaim the 50dma & 3855$ level, but got rejected & closed below the 3820$ level. AMZN 0.00%↑ & AAPL 0.00%↑ earnings after hours also weighed heavily on the market by pushing it as low as the 21dma and 3780$ level, but we bounced back well since then.
Tomorrow, I want so see that 3780$ level & 21dma hold again and this would be a very good spot that I will look closely to initiate a possible long position in ES_F to play the pullback to the 21dma and a possible 2nd attempt at the 50dma breakout. If we can’t hold these levels and undercut the 21dma, then the market is in danger to rollover IMO.
$ES levels on the upside (resistance)
3820$ level (Oct. structure high)
3855/3903$ area (May/June/July structure)
the 50dma
$ES levels on the downside (support)
3780$/3735$ area
3639$ last week swing low pivot
3596$ level (2020 structure)
3509$ level (2020 structure)
3388$ level (2020 structure)
NASDAQ ($NQ) Daily
$NQ levels on the upside (resistance)
11253$ level (recent swing low)
11534$ level (Sept. structure)
11689/11794$ area (May/June/July structure)
the 10/21dma
$NQ levels on the downside (support)
11068$ level (3 Oct. low)
10890$ level (2020 structure / June low)
10484$ level (13 Oct. low)
MARKET BREADTH & INTERNALS (RISK MODEL)
NYHL (New 52W Highs - Lows) - Going back down today @ -52
20dma @ -277 (⬆️)
NYAD (Net Adv/Decl) - Breadth came down today, but still positive @ 323
20dma @ +105 (⬆️)
MCOSINYA (McClellan Oscillator) - McClellan is pretty much flat today
20dma @ +11 (⬆️)
MMTH (Stocks > 200dma - LT breadth) - LT breadth with a proper touch of 34.16$ resistance level today. We might need a couple of days to let kma’s catch up, but we could also just breakout straight up from here, we’ll see.
MMFI (Stocks > 50dma - MT breadth) - MT breadth with an inside day right into resistance area. Need more information here.
MMTW (Stocks > 20dma - ST breadth) - ST breadth is still in this extended area, but holding well and still above 70.47% pivot.
Keep in mind that it’s the style of ST overbought condition rally that we can see. All that move after July 27th was with MMTW > 70%. So an overbought condition here doesn’t mean we crash the following day.
VIX (Volatility S&P 500)- VIX was slightly green, but was not able to reclaim the 50dma & 27.67$ pivot. This is good.
DXY (US $) - Reclaim of the base area today, so not the best action…but we are still below the 50dma, so this might be a retest & rejection.
US10Y/TNX (US 10Y bond yield) - The 10Y continues to trend down and is now below the 21dma & important 4% level.
IEI/HYG (Credit Spread) - Continue to trend down. This is good action.
BTC/USD (Bitcoin) - Bitcoin reversed today following AAPL & AMZN earnings, but still above all kma’s and around 20300$ level. No red flags yet.
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
Sectors Relative Strength - Weekly (RS vs SPY)
(XLE) Energy - The energy sector is now coming into potential resistance at the 90.46$ May/June base area. This could be a reversal level after a 30% run from the lows and we might be due for at least a couple days of consolidation before running higher (if we do).
(XME) Metals & Mining - XME still consolidating in a pretty healthy way above all kma’s.
(XBI) Biotech - Biotech really struggles at that 83.06$ level and is now rejected 2 times at the 50dma. Looks pretty weak to me. We might need a couple more days of consolidation before breaking out…or simply might be a good short opportunity.
(SMH) Semiconductors - Semi’s really looking weak and a very clean short setup at the 21dma (BO21PB).
(XLF) Financials - Financials continue trending higher, but not in the cleanest way. Might just need a couple of days to cool off.
(FDN) Internet - Followed through on the second 50dma rejection and now broke the recent structure UTL. Might get a retest of the 125-ish area.
(IGV) Software - 2nd 50dma rejection, but today was still an inside day…so could swing both sides here IMO.
Alex’s TAKEAWAYS
Again tonight, I’ve got a mixed bag of signals…
What I like:
Breadth is improving with broadening participation (risk model @ 20)
The market seems to hold even with the mega-caps missed earnings - that’s a character change to me.
The market seems to work a normal pullback to the 10/21dma in a pretty controlled action.
10Y trend lower / selloff continues, helping the equity market
The VIX is in a solid downtrend and is still below the 50dma.
What I don’t like:
The leading energy sector is being extended & into resistance
DXY bounced back above the base area
A lot of reversal in individual names today at key levels or extended after the recent rally (SWAV 0.00%↑)
Sectors showing follow-through on some of the reversals I noted yesterday
ST breadth indicators still flash overbought condition
We just had another 50dma rejection on ES.
0 long setups tonight, even have more short setups in the FL.
I tend to think that we might be still ST extended and that PB has more legs to the downside, but I’m really open to anything and will follow price action.
Gameplan:
Tomorrow, if the market is rolling over, I will trim my positions even more or even close them. I plan to play the short side with a possible SQQQ 0.00%↑ and/or SOXS 0.00%↑ position. If the market is bouncing from the levels I indentified, I'll play along the market with SPXL 0.00%↑.
LEADERS LIST
Overall leaders (PRIME Score)
WTI,AEHR,INSW,HLIT,YPF,PBF,CVI,XMTR,DINO,PR,MUR,MRO,EURN,DVN,CCRN,VAL,ERF,PARR,DO,HCC,
Fundamental leaders (FA Score)
AMR,HCC,MRO,ERF,DVAX,MGM,DRH,TELL,BHF,RES,ENLC,SWAV,TRGP,WTI,HLIT,DK,MPC,FANG,KOS,ARCH,
Technical leaders (TA Score)
AEHR,YPF,INSW,WTI,PBF,HLIT,PARR,SLB,CVI,CHX,XMTR,EURN,XPRO,TNK,MUR,NOV,WFRD,VAL,DINO,DO,
Relative Strength 1 Month (1M-RS)
CAR,CHX,AEHR,NOV,SLB,CLNE,HAL,TOST,STLD,XPRO,PTEN,RES,MARA,ENLC,SVC,ULCC,SLCA,CCL,PUMP,DO,
Relative Strength 3 Month (3M-RS)
APDN,YPF,WFRD,AEHR,INSW,NTNX,WTI,XPRO,XMTR,ZETA,TNK,RVNC,PBF,AMRS,PR,SLB,MUR,DO,CHX,PCG,
Relative Strength 6 Month (6M-RS)
AEHR,ARRY,RXDX,STNG,TNK,MRSN,TH,INSW,STKL,CCRN,ENPH,SWIR,YPF,HLIT,CPRX,ELF,STEM,PAYO,XMTR,SWAV,
PT PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
LONG FOCUSLIST 📈
SOXS SMH @ 184.19, XMTR 61.63 + DTL,
SOXS 0.00%↑
The setup is from the SMH chart, but I plan to play it on the long side with a 3X lev ETF. My trigger is the recent swing low pivot on SMH. I see a bear flag working to and a 21dma rejection today.
ALERT: 61.11$
SETUP: SMH’S BO21PB
Still have my position from the low entry at the 50dma, but now we seem to build a tight handle right below the DTL. If we stay above 57.81$ and can tighten up a bit, this DTL will be a great add-on opportunity.
ALERT: 61.63$ + DTL
SETUP: WB
SHORT FOCUSLIST 📉
PAGS 13.13, SNOW 166.72, GTLB 46.39, MU 51.66, APPS 13.2,
PAGS 0.00%↑
I see the UTL that we broke last week, only to come to recent the previous swing high and also the 50dma which we rejected again today…on volume.
UPDATE: rejected at the 21dma and closed just above the entry pivot.
ALERT: 13.13$
SETUP: BO50PB
SNOW 0.00%↑
This software name was showing potential for a long setup with the DTL potential breakout, but now we rejected this level hard today and closed below all kma’s. IGV sector is also super weak and rejected at the 50dma. Might have the sector help here on this one.
UPDATE: Rejected at the 50dma and base top before closing unchanged. Same pivot for the entry.
ALERT: 166.72$
SETUP: WBPB
GTLB 0.00%↑
A name that I traded a few months back now showing weakness with yet another DTL rejection and close below all kma’s. We are clearly in a downtrend, and if we break below the 46.39 level, that would negate the base reclaim and would set it for a potential break lower and another shot at the longer-term UTL.
UPDATE: Tried to reclaim that structure, but got rejected and closed below it. Same pivot.
ALERT: 61.11$
SETUP: BO21PB
MU 0.00%↑
The whole semi-sector is very weak and MU is a nice example of a bear flag breakdown with increasing volume. I like this setup at the recent swing low pivot.
ALERT: 51.66$
SETUP: WB
APPS 0.00%↑
A software name that is also building a bear flag at the declining 21dma. I would use either the UTL for an early entry or the recent swing low pivot.
ALERT: 51.66$ + UTL
SETUP: WB
🎖️ = 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.
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thanks Alex,
I will keep my subscription, at the moment I find very useful your newsletter
have a great weekend
Hi Alex, just checking out on the 5% exposure.
Eg: BITO 12.90, SL 12.80
Risk per unit 0.10
Capital: 5,000
Max risk is 1% of capital: 50
Position size : 50 / 0.1 = 500 unit. ?
But if is 500 unit it will be 500 x 12.9 = 6450 it seem total market value of stock become larger than capital.
Would like to seek clarification from you, many thanks !