Alex's daily Market Update & Focuslist - 05/24 🖊️
Disclaimer: This newsletter is not financial or investing advice. The information is for education purposes only and reflects only my own operation.
MARKET REVIEW
Very positive day as we were able to follow through from Friday’s EOD rally and close above the 5dma on all the major indices.
We also closed right at 2 very important levels that I talked about yesterday, 3981$ pivot and the 10dma. Tomorrow will be very important as we’ll try to breakout them on the upside. We also have the DTL near from last 2 big one day rally that rolled over on their next day.
On the downside, we want to stay above the 5dma and recent 3900$ consolidation.
We close above the 5dma, which is my trigger to get invested in the market. I stay very careful as I want to build my exposure very progressively on current profits. I don’t want to risk any capital. We have still A LOT OF POTENTIAL RESISTANCE ABOVE.
MARKET BREADTH
Still have NET new 52w lows on both NYSE & NASDAQ. We begin to see NET new 1M highs on the NYSE, which has a lot of Oil, Gas & Metals strong that are strong right now.
Stocks > 50dma made a higher low today and we’re back in potential support zone. Could last week have been a shakeout…or are we making the retest before going lower again. We’ll see.
VIX rejected yet again 30$… WHICH IS SUPER POSITIVE. 3 consecutive day with attempt higher and rejection which formed big wicks.
P/C ratio still not spiking, so no real fear in this market yet. We want to see equities spiking above 1/1.1
McClellan ratio climbing in positive @ 76.
ECONOMIC CALENDAR
Nothing major tomorrow.
SECTORS REVIEW
Market setups are never wrong. I saw so many great setups in sectors that led last March rally, that it’s honestly no surprise for me to see Oil, Gas & Metals being the leaders today.
Solar & C Energy took a breather today, it’s ok. Overall a pretty strong day with a lot of sectors participating
Also still looking at Crude Oil (CL_F) for a potential breakout. Price action is super constructive which yet another higher low and pushing again against 111.37$ pivot. Volume is getting really low in the congestion area, we’ll make or break pretty soon.
ALEX’S PORTFOLIO UPDATE
Been able to execute well today with a strong market that pushed almost all the names of last night FL into their alert levels.
Even if I was not supposed to carry more than 20% exposure due to market still below 21dma, I have so much cushion on my 3 positions that I can risk keeping 30% tonight. My progressive exposure limit is at 46% right now, so I feel pretty safe even if we gap down tomorrow with my 30% over night exposure.
On top of those 3 positions, I day traded TECK & CEIX, which I closed before close to bring down my portfolio exposure.
New positions:
SWN (Been aggressive when I saw market strength on that morning pullback. I took the DTL breakout instead of the recent swing high alert I had as well.) SL now much smaller, so better R/R
EQT (Also liked the early action on this one while market was PB, decided to take the DTL breakout instead to have a smaller SL)
CELH (Took the position on last week WB breakout high @ 59.8$)
Trimmed positions:
Closed positions:
ALEX’S DAILY FOCUSLIST
5 names in the Focuslist tonight. Outside of Oil, Gas, Chemicals & Metals… I honestly don’t see much right now. They are the clear leaders and I will concentrate as much I feel comfortable. I remember vividly back in March we had some kind of Ukraine war news and all these sectors crashed more than 10% right at the open.
Yes they are the leaders, but remember that they also are highly correlated and news driven by some extent. So manage your risk accordingly.
We’ll first have to see if Crude Oil futures breakout of their consolidation before I would open more than 1-2 positions in this sector. There is still some nice setups for tomorrow which I will try to day trade if market’s good, as I’m already at my maximum exposure.
TELL - Still top of my FL for tomorrow. I see today as being a higher low within that low volume congestion area at the 50dma. Still looking at 4.74$ for an early aggressive entry AND 4.97$ or the DTL for a second entry. Like this setup very much.
NTR - Also a very nice BORL setup right at the 50dma and prior support area. We made a higher low in the last 2 days, and I’m now looking at the DTL & 102.87$ pivot for the setup confirmation.
KOS - Same setup here as well, BORL. Looking for the setup confirmation on the 7.4$ pivot breakout.
HES - Another Oil name setting up really good in a ascending wedge formation. I see a series of higher lows forming and squeezing it against his 118.86$ pivot which would confirm the breakout.
VLO - One of Oil sector leader. We might see another couple days of tight action before seeing a DTL forming on the right side, but I still have my alert set at 127.64$ that would confirm the base breakout and continuation.
RELATIVE STRENGTH TRACKING
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:
AMR,HDSN,VTNR,ARLP,AR,SQM,EQT,DK,GOGL,BTU,SD,VAL,SIGA,CVE,GNK,LNTH,CVI,ZIM,CHK,DVN
Relative Strength 1 Month - TOP 20:
VTNR,SIGA,PRPL,CELH,SQM,CVET,HDSN,RELY,DVAX,PAYO,HRB,SLDP,AMR,LTHM,COMP,SOFI,ZIM,BTTR,LICY,PRCH
REFERENCES
Articles on my system:
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