Alex's daily Market update & Focuslist - 01/04
Pullback still underway!
Enjoy tonight’s report!
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 + Takeaways
PTMM is on a RED market signal (🟥)
Key Takeaways:
FLAT - still RED signal
MCSI confirmed the hook down with a follow-through
PTHL started trending higher again (NNH increasing)
Daily_momo flat, so 5-day remains oversold & 10-day is now getting into oversold as well with 0.44. We are getting into a buy spot.
MT_momo also came back a lot and is now approaching being flat
The MCSI downtrend is a concern, but we are right at the 21dma, and quite ST extended already.
I don't know what will happen next and if this pullback is short-lived or for longer, but I am still playing that as a healthy pullback, with all km's still aligned and price retesting the 21dma while ST_momo being in the buy zone for a bounce.
I've been asked if this is a contained/healthy pullback within a bull market or the start of a deeper correction.
The short answer is:
I don't need or want to predict what kind of pullback or if this is the start of a market crash, correction, or a 5% pullback. Price will tell.
The longer answer is (And that's where there's LOT of IF, and I can be all wrong):
We just got out of a 2y major bear market, and the recent rally, with the level of extension we saw, is usually seen very early out of a bear, or late stage as a climatic run. And I don't think we are at a climatic stage with RTY, not even out of stage 1 and the duration of the bear we just had.
Five trading days ago, everyone was waiting for a pullback to get in this strong market...and then 4 little days later, everyone is looking for the exit door and a prolonged correction?
Now you know I use PTMM A LOT. Here's what I want to see on it to turn bearish and look for prolonged PB/correction. (look at the dashboard annotation and you'll see what a correction looks like based on late summer one)
• First, we need NNL (we still have NNH), and we need to accelerate there.
• We need MCSI to flip below the 10dma, and start trending there
• PTHL needs to flip down, and cross the 50dma and start trending down.
• Price needs to flip BELOW all kma's + 10 flips below 10 + 21 flips below 50....right now we are barely below the 10...and still above the 21dma. It is still very healthy and contains PB.
• The 21 & 50 are trending up very nicely still, and the 200dma just started trending up.
• LT_momo needs to flip negative. We still have a 15x ratio.
All that to say, why try to predict when I/we have everything to assess in real time where/if the market trend is up, sideways, or down?
The other thing is you want to listen to the new position’s feedback & your current PF. For me, I have green the last 3 days and up YTD, even if the market is pulling back hard. For me, that's also a tell & feedback to listen to.
I am optimistic (the average stock market is in a Bull Market 67% of the time and in Bear Markets 33% of the time), and until I see these PTMM points above happen, having bad feedback in new exposure & PF...seeing a bounce attempt hard rejection that creates a lower high on the indices...seeing the VIX spike, Credit Spreads spike, NNL spike, etc, etc... I continue to trust the trend until it is no more.
Another thing, historically, if we look at MMTH (stocks above 200dma), we are still relatively early in a potential bull run, with only 62% of stocks above their 200d. Yes, we are right into the last 2Y highs area...but it was bear market rallies. We still have room to go higher, even if we need to remove some of the MT excess, IMO.
And again, I might be all wrong, but I don't care because the price will be there to tell me the real story.
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