Alex's daily Market update & Focuslist - 12/22
The market rolled over at the 50dma! 1 day left before Xmas 🎅🎄
Good evening folks!
Tonight will be a very light Market update & Focuslist as I have a Xmas party and need to leave soon for the night. With today’s action, we’ll want to keep it relaxed and play it safe anyway as we’re headed for a 3 days weekend. 🎅
I wish you all a VERY HAPPY HOLIDAYS guys. Take some time off trading and enjoy these beautiful moments with friends & family. 🙏💙
Alex ✌️
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GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Price Action Analysis:
/ES reacted poorly to the 50dma + 10dma retest overnight and then got hit by economic news that pushed it down below the 3900$ level right at the open. That's exactly where I was looking for rejection and potential rollover.
We then came to retest Tuesday’s low pivot, made a nice little shakeout below, and then rallied pretty hard to close the day on a 1.8% bounce.
Now the big question tomorrow is, do we follow through on the BOUNCE or the 50dma ROLLOVER….?
We are still below ALL KMA’S and in a downtrend, so be careful on the long side until we confirm an actual trend change, with AT LEAST a higher low on /ES.
On the upside,
The 3855/3900$ area is now acting as resistance, which will be the first level I will look for potential rejection tomorrow.
The down-trending 10dma might also be a potential resistance.
On the downside,
Tuesday’s low pivot (3803$) will now be a level of interest, along with the 3780$ level as potential support.
NASDAQ (NQ_F) Daily
RUSSELL 2K (RTY_F) Daily
Alex’s TAKEAWAYS
We rollover where I was looking for and closed below all kma’s and below the important 3855/3898$ area, but we did bounced pretty hard at Tuesday low to close the days in the middle of the candle… which does not give it a good look.
The VIX spiked more than +21%, but finished in the lower range of the day at +9.5%.
We saw very constructive action in sectors ETF like XBI, XLV, SMH & XME. That EOD bounce saved a lot of charts…
The big question is: Was it the initial rollover move and react bounce and we’ll follow through on the downside with an increase of volatility…or we’ll make a double bottom and follow through on the EOD powerful rally…??? I think we’ll have to be very careful tomorrow as I feel that it could swing both ways, even if the trend is down.
Also, we approach holidays with only ONE trading days until Christmas, with the market being closed next Monday (Holiday). We either see more volatile moves or a very choppy market. Having that in mind, I don’t think we’re in a market to be aggressive, and one should stay defensive, especially with the overnight exposure.
Time to take it easy, study, do some year-end post-trade analysis, and prepare for 2023.
Market health & Trend indicators:
LT SIGNAL: downtrend (red) + BELOW 50dma = BEAR market (🟥)
MT SIGNAL: downtrend (red) + BELOW 10dma = Downtrend (🟥)
Tomorrow's economic news:
Gameplan:
With the 3 days long weekend ahead of us, I will make sure to control my exposure going into that.
If we rally above the 10dma AND/OR the 3898$ level:
I will close all my exposure (short) and remain cash going into the weekend.
If we follow through on the downside and close below or close to the 3800$ level (Tuesday low pivot)
I will trim 50% of my WOLF short position and keep my SPXS 10% position.
In that scenario, I want no more than 20% short exposure into the weekend.
If I take intraday trades, that will only be day trades.
In the following sections of tonight’s letter, I’ll cover essential parts of my daily routine & preparation for tomorrow’s trading session.
✅ My daily Focuslist, including setups, alert levels & explanation (LONG/SHORT)
✅ My Portfolio update
✅ Sectors Review
✅ Market Breadth & Internals
✅ Economic Calendar
✅ Prime Model spreadsheet (PT_database)
✅ Leaders list (technicals, fundamentals & potential TMLs)
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