Alex's daily Market update & Focuslist - 02/19
The market closed the week weak, as the tech sector looks tired again.
Good evening!
After 15 weeks of a strong uptrend in the market, we see some weakness in some market areas. Especially in the leading technology sectors, Friday's reversal confirmed a potential lower high structure in many charts. Semis, Software, Cloud, Cyber, etc. We’ll have to monitor this possible structure shift as it might be the start of some digestion or pullback in these sectors.
As for the broad market, despite some LT breadth overbought conditions, we still don’t see these red flags, and the uptrend remains strong and breadth strong. We’ll have to see if the tech pullback confirms this week and if the selling spreads into other market areas.
Traction is also harder on new buys for me in the last 2 weeks, as I can’t get any actual multi-day/week moves for more significant swings. That’s also some great feedback that I follow in my own trading, and that’s why I remain very light in exposure following last week’s CPI distribution day.
Progressive exposure is a crucial tactic for me, and if I can’t get profits to finance my overnight risk, then the market is sending me the message it’s not easy money, and caution is needed.
In final words, stay cautious as the market is sending us some hints in the last few days following CPI despite the trend being up & (still) strong. Listen to your trades feedback, and manage your downside first. After such a great start to the year, you want to stay as close to your equity high as possible for the next big window of opportunity.
Cheers & have a good trading week!
Alex ✌️
Tonight’s daily report content
PrimeTrading Market Model #PTMM + Takeaways
General Market Analysis: NASDAQ - S&P 500 - RUSSEL 2K - OTHERS, including my daily levels & my bullish and bearish scenarios
Market Internals
Sectors & Themes Analysis
Daily Focuslist including setups, alert levels & explanation (long & short)
Leaders list + Scans (technicals, fundamentals & potential TMLs)
My Portfolio Update
Economic Calendar
PrimeTrading Market Model #PTMM
Selling came back in the market on Friday, as we were not able to follow through and close the week strong.
So far I’m not seeing many red flags in the broad market, as I see in the tech sectors. Price is still within 0.65% to highs, with good NNH, and MCSI just crossing up above the 10dma and pointing up.
Everything could change quickly is the selling for the potential technology sector’s digestion spread into the broad market, but so far the trend is up and breadth is good.
The only red flag I might see here, is the high daily momentum divergence, where we have pretty volatile day with 10%+ 4% movers, with the 5 & 10-day ratio staying flat. This means that even if we see days with very good upside momentum, it is equally matched with selling momentum. That’s something to watch in the next few days.
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