Alex's daily Market update & Focuslist - 02/06
The broad market attempts a bounce once again, can we follow through this time?
Good evening!
I think we gained more clarity on the market potential direction today, with another bounce attempt, and seeing good breadth for once.
Here’s what I see right now that makes me think we might see a continuation higher & breadth broadening out from here.
PTMM showing another 21dma bounce attempt and the 2024 price action looking like a large VCP now
ST/MT/LT momentum hooking up
RTY potential pullback channel breakout
ES/NQ pushing against new high ground
RSP builds pressure below the base level with higher lows on the right side
VIX structure breakdown attempt
Credit Spreads back below all kma’s
Bitcoin looking constructive
10Y rejected on the kma’s & structure retest. Constructive if we follow through
DXY rejected at base level & potential false breakout. Constructive if we follow through
Overall, we had every chance to roll over and break down lower in the last few days, which we failed to do.
We might very well not see that upside continuation materialize tomorrow/next few days…but I like the odds here after we gained more clarity today.
Good read & HAGN!
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
I obviously don't know what will happen, but I like the look of PTMM right now for a potential breakout & breadth expansion from here. Here's what I see:
Good breadth today, with a GDB at +323
The 5-day & 10-day ratio is hooking up on a strong daily momo reading (>5)
Price is now very very tight right at the 21dma, which we bounced from AGAIN today. Price chart really looks like a VCP since the start of 2024 now.
If you look at global cumulative breadth chart, it's really just sideway/chop digestion
MCSI is still down, but it's pretty classic lagging action, and if we follow through on today's momo hook-up, then we might see it curl back up.
MT & LT momo also hooked back up today.
The big question is: Can we follow through on that constructive action tomorrow...or fail again?
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GENERAL MARKET ANALYSIS
S&P500 (ES_F)
ES starts to trend above 4956$. Looks like a new high is possible here.
NASDAQ (NQ_F)
Still making higher lows and seems ready to push above 17793$ and make a new high.
RUSSELL 2K (RTY_F)
RTY broke out of the recent pullback channel and reclaimed the 50dma today. I think we could go from here, and it confirms the whole view & thesis we see on PTMM and in the review of the sectors.
OTHERS
RSP (S&P 500 Equal Weight ETF)
I really like the look of the right side of RSP here as we make higher lows at the 21dma and building pressure below the base level. Looks really ready to go.
RSP is a really good barometer for the broad market price action, so it’s very constructive to see this.
Market Internals
Market Breadth & Extension (Stocks > 5, 20,50 & 200dma - short to long term view)
VST breadth hooked back up
ST breadth hooked back up
MT/LT breadth flat & trying to curl up.
If the VIX is following through on today’s structure breakdown attempt, that would be one of the biggest risk-on indicators for me. VIX looks REALLY constructive.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
Rejected & back below all kma’s.
10Y Bond Yields (daily)
We are retesting kma’s and recent channel DTL. Usually a stock setup a would play short on that structure retest…but we’ll see how it goes with the bond yields.
US dollar index (DXY)
104.23$ false breakout?
Back below all kma’s.
BTC/USD (Bitcoin)
Looks bullish above 43250$ with the recent higher lows structure here. Watch that pivot breakout.
SECTORS & THEMES ANALYSIS
Strong day for growth stocks. ARKK Micro + Small-cap. RTY looks good here
Overall a pretty decent light day, expect for Tech & Comm services
BIG day for China names
Airlines, Solar strong day
Biotech did well, and still setting up for a continuation breakout
Overall, lot of more beaten down theme were strong today.
Leading themes charts (rank sorted):
1 Semiconductors SMH
2 Uranium URA
DTL & pivot retest
3 Software IGV
Looks ready to go.
4 Cloud Computing SKYY
Looks ready to go.
5 Artificial Intelligence & Technology AIQ
Attempted breakout. Not rejected, which is constructive for tomorrow.
6 Cybersecurity CIBR
Looks ready to push from that channel breakout at range bottom today.
7 Homebuilders XHB
Looks ready to go.
8 Gaming & eSports ESPO
New high.
9 Medical Devices IHI
New high.
10 Transport IYT
Sectors & Themes ideas (weekly):
FOCUSLIST
STNE (Long ) daily/W/65m - STONECO LTD. - Alert: 18.24, SL: 17.38
Still within the structure and I missed the perfect intraday entry off the range breakout this afternoon. We are still within that daily structure below base level and if we could ideally make a higher low tomorrow it would be ideal to get in at an optimal point.
DOCN (Long ) daily/W/65m - DigitalOcean Holdings, Inc. - Alert: 35.2, SL: 33.85
Still setting up below 35.20 pivot. We cannot be more squeezed on the daily...we'll break either side very soon.
MRVL (Long ) daily/W/65m - MARVELL TECHNOLOGY, INC - Alert: 67.49, SL: 65.77
Probably top idea for tomorrow. I like that pullback as we retested the base level and the 21dma. We made higher lows in the last few days, and attempted to breakout of the PB structure at the close today.
PATH (Long ) daily/W/65m - UIPATH, INC. - Alert: 23.19, SL: 22.16
Still building nicely at the 50dma abive the last earnings gap area. We are within that tight pullback channel and I would look at the 23.19$ pivot for confirmation.
SQ (Long ) daily/W/65m - BLOCK, INC. - Alert: 68.43, SL: 65.29
The setup is still valid, as we're building a tight handle on the right side following the DTL retest. Above 68.43$ we can go.
SCANS
10dma pullback scan
None
21dma pullback scan
STNE ZS FOUR MRVL TREX VTRS CLVT M AAP JWN ASO BBWI WSM PATH FL SGRY GLBE PODD KSS FYBR PZZA IOT SIX GFI AEO
50dma pullback scan
PODD KSS OLLI
Continuation breakout scan
BLDR CRWD GKOS PAGS PLAY PSTG URBN
Bigger the base, higher in space scan
GKOS OLLI GLBE BECN
Last week's top gainers - study material
NXT ARVN SYM HLIT EAT VRT CLS MOD WSC BOOT CLF MDB XPO FSLY NVDA DDOG DOCN DKNG SNOW ELF THC PLAY BLDR ESTC
Themes: Tech, Software, Consumer, Materials, Semis.
Continuation breakout: VRT WSC CLS NVDA ELF THC DKNG BLDR, etc
Pullback: ARVN SYM HLIT EAT MOD DDOG DOCN SNOW ESTC
EP: NXT BOOT
There are still many pullback setups, but we see more & more continuation breakouts in this week's scans. This is something to keep in mind as more stocks make new highs.
Good execution finding HLIT before moving last week in FL.
Caught DOCN move from FL and executed on it.
FSLY & BLDR were two positions that I cut too soon 2w ago.
MDB VRT SYM ELF DDOG ESTC all names that were shared & played in the PT community
We are in the right name, guys; we must continue identifying and executing these setups without jumping out too soon.
Again....study this list & scan EACH WKND, and find the correlation with your routine and what you can improve to put you in these setups week after week. That's how you improve your game.
What worked, and what do they have in common that I can replicate?
Those were the top performing liquid stocks, we want to catch those!
PORTFOLIO UPDATE
Bad day mentally, and I made lot of mistakes today. We all have our shitty day, part of the game...but I made a few tweaks to make sure I address that.
Closed SNPS at b/e for a small gain on that ugly base level rejection. I knew we would be some selling on the initial retest, but seeing that wide range is a red flag to me.
Tried STNE & DOCN that I cut early this morning
Tried to position in XBI & BRZE this afternoon that I kept for -0.77% NUR, which is below my limit of -1%.
I like what I see on PTMM & VIX, and I'm ready to take that overnight risk based on that. This market remains very choppy & hard to position, but we had every chance to break down, and we didn't. Let's see how it goes tomorrow!
INTRADAY/CLOSED TRADES:
Important economic news/events (weekly)
REFERENCES
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