Alex's daily Market update & Focuslist - 01/15
Major indices are digesting near their highs, while breadth is contracting under the hood.
Good evening!
The market continues to digest the year-end rally, and major indices showed constructive action with a strong base & 10wma bounce last week.
We also see great weeklies in the tech space (Semis, Software, Cyber, Cloud, etc.), so I would expect these sectors to take the lead if the market decides to follow through on last week's bounce and break to a new high. This rally might heat up again. We’ll see.
That said, I remain cautious as the market remains LT-extended, and we saw breadth deteriorate late last week. We don’t have any red flags yet, but keeping this in our heads is essential if the trend accelerates.
Enjoy tonight’s report, and have an excellent 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 + Takeaways
PTMM is on a YELLOW market signal (🟨)
Key Takeaways:
MCSI is accelerating on the downside, indicating a breadth contraction picking up.
NNH is still increasing. There is a mixed signal here.
The price is still above the 21dma and trying to hold.
ST_momentum is still in neutral territory and not presenting a buying opp. yet.
MT_momentum is still in a downtrend and is now neutral. It's not a significant buying opp here; we are extended.
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GENERAL MARKET ANALYSIS
S&P500 (ES_F)
The market is still trying to digest the year-end rally. We saw a powerful bounce off the base level & 10wma last week, which is very constructive. However, we also see breadth contracting and fewer stocks participating in that rally.
If we follow through on last week's bounce and break to new highs this week, we’ll want to see breadth expanding and catching up.
Daily, we still have our two very key pivots to work with:
4830$ for a new high and continuation of the uptrend
4767$ breakdown for a rollover and potential 2nd leg down of that pullback.
These 2 levels will be my barometer for ST direction of the market.
NASDAQ (NQ_F)
RUSSELL 2K (RTY_F)
Market Internals
Market Breadth & Extension (Stocks > 5, 20,50 & 200dma - short to long term view)
ST breadth is still contracting, and we are digesting the year-end strong rally. Mid & LT, we are still very elevated and extended.
VIX was green, but we again rejected the recent UTL structure, 21dma & 12.75 base level. Good to see.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
Downtrend.
10Y Bond Yields (daily)
With MOVE and that channel breakdown today after lower highs structure…we might resume lower from here.
US dollar index (DXY)
A tight wedge will likely give us the next ST direction on the breakout.
Still below all kma’s - no red flag.
BTC/USD (Bitcoin)
Trying to stabilize around the 21dma & UTL structure after last week’s failed b/o.
SECTORS & THEMES ANALYSIS
10 leading themes charts (w/ pivots):
1 Uranium URA
2 Cancer CNCR
3 Software IGV
Powerful 10wma bounce.
4 Semiconductors SMH
Recent swingH pivot & 10wma bounce last week. Looks ready for continuation.
5 Biotech XBI
Failed on a lower high right at the 90.91$ base level on Friday. Looks at risk.
6 Cybersecurity CIBR
Now high with a 10wma powerful bounce last week.
7 Homebuilders XHB
8 Cloud Computing SKYY
Rejected at recentH pivot, but still very strong 10wma bounce on the weekly.
9 Internet PNQI
Rejected at recentH pivot, but still very strong 10wma bounce on the weekly.
10 Artificial Intelligence & Technology AIQ
29.74$ base level & 10wma bounce last week. Looks like a beautiful BORS setup and ready for continuation.
Sectors & Themes ideas (weekly):
From the weekly charts, we might see a big week for Tech. Cyber, Software, Cloud, Semis, Internet, and potential continuation in Uranium, Gaming/Sports & insurance.
CNCR/Biotech seems tired & extended.
That's the charts we want to see with key & strong 10wma bounce in tech last week.
FOCUSLIST
STNE daily/W/65m - STONECO LTD. - Alert: 17.28, SL: 16.15
Still building that 21dma pullback following the 14.60$ base breakout. We tried to push out of the DTL last Friday, but couldn't find enough strength with the heavy market. I'll be watching this one closely around the 17.28$ pivot.
CHGG daily/W/65m - CHEGG, INC. - Alert: 11.08, SL: 10.61
Really beaten down stocks in the past 2-3 years, but we are building a nice higher low structure above the 10wma as we try to breakout from a stage 1 base. It could be a good swing opportunity in a turnaround stock.
CLVT daily/W/65m - CLARIVATE Plc - Alert: 9.15, SL: 8.8
First 21dma pullback since stage 1 base and LT weekly DTL b/o. Forming tight wedge with higher lows and anemic volume profile. I like this one for a continuation setup.
MLTX daily/W/65m - MOONLAKE IMMUNOTHERAPEUTICS - Alert: 59.45, SL: 54.67
It is a clinical-stage biotech, so adjust the position size accordingly. I like how we build tight action around the 21dma and just below the six months base top. There were higher lows last week, and if we can push out of that DTL & 59.45$ pivot, we could see a pretty powerful breakout and sustained move.
DEI daily/W/65m - DOUGLAS EMMETT, INC. - Alert: 14.57, SL: 13.9
Had to keep a REIT close in the FL as they are trying to breakout for a few days now. Theme is strong and DEI keep showing up in scans with a tight and good volume profile pullback around the 21dma. Great continuation setup here in a potential ready to move theme.
SCANS
21dma pullback scan
STNE CHGG CLVT MLTX BPMC DEI
50dma pullback scan
RPD RMBS
Pullback-tight scan
LAZ STNE HCC BPMC DEI
Continuation breakout scan
VRT
Bigger the base, higher in space scan
DBRG APP
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
Important economic news/events (weekly)
REFERENCES
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