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Alex ✌️
GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Today, we had a slight gap down with a flush at the open, but bounce rather quickly and wedged higher all day, until in the last hour that we broke that structure and sold off into the close. We finally closed below 3735$ and we are still below all kma’s.
This is not healthy action at all and this is indicative of potential continuation on the downside after that 21dma retest & rejection.
Tomorrow, I expect that we might retest the 3735$ level or even a declining 21dma again before going lower. I am also open to a potential gap-down scenario after the weakness we saw at the close.
One thing is certain, if we continue down, we have a structure vacuum until 3639$ level…so this could be a quick move down tomorrow if we do.
Tomorrow morning at 8:30, we have some important job #’s, so keep in mind that these releases will have an important impact on the market… what seems bearish right now can reverse quickly with a surprise there.
Overall, nothing indicates that we have an ST bottom or signs of a bounce…so until then we play the short side and remain ULTRA CAREFUL with any long exposure. 🛡️
NASDAQ (NQ_F) Daily
RUSSEL 2K (RTY_F) Daily
Alex’s TAKEAWAYS
We’ll keep it simple tonight, we saw some strength & bounce in some areas of the market today, but these were mainly moved into kma’s or important structure levels that we rejected by EOD. We also see a determination of the breadth & internals that were doing good lately (before FOMC).
Overall I remain bearish until we have constructive action that we can build upon and cover our short position. Remember, we follow price action and now the trend is down and the PA is telling us the path of least resistance is down…until proven otherwise.
What I like:
The VIX is flat and not spiking today - interesting divergence
What I don’t like:
Reversals continue in breadth & internal indicators
10Y yields continue higher
DXY continue higher
Bounce & rejection in individual names
Bounce & rejection & some follow-through in the sectors
ES_F with a WEAK bounce & close.
Gameplan:
Tomorrow, the plan will be to manage my short positions as I didi’t get the push I wanted on my SOXS & LABD new positions. I don’t plan to put more exposure in the near term as I want to build a considerable cushion on those positions and potentially wait for the first bounce/PB on the Daily before increasing above 40%. I’m good on the progressive exposure side with 52% allowed right now, but I feel that I have enough for now.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
None
LONG FOCUSLIST
Ask Jerome Powell why there are no long setups AGAIN tonight…😤😂
SHORT FOCUSLIST
CHWY 34.22, FRSH 11.96, PL 5.01, SWN 6.35, IP 32.18,
CHWY 0.00%↑
The potential long setup turned to a short right now with the UTL break and failed breakout with a lower high. This is the kiss of death… Now look like could resume the downtrend and be back below the 50dma.
UPDATE: Tried to rally but got rejected and closed unchanged. Entry still valid.
ALERT: 34.22$
SETUP: FAILED B/O
FRSH 0.00%↑
Was working on consolidation in the last months that we broke a couple of weeks ago, only to drift higher into earnings. The reaction was really bad today with a nasty kma’s rejection. Will look to use the recent structure low for continuation.
UPDATE: Tried to rally, but very weak and got rejected below the 10dma. We might need a couple of days to digest that big thrust down but could also flush rather quickly.
ALERT: 11.96$
SETUP: WBPB
PL 0.00%↑
We broke out of that larger wedge formation 2-3 weeks ago and came back to retest that UTL. Could offer a very good R/R short setup on that retest & rejection.
UPDATE: Small rally attempt here too, but only inside day. Entry is still valid.
ALERT: 5.01$
SETUP: WBPB
SWN 0.00%↑
A NatGas name that is within the base for a while, but now building lower highs and higher lows in a wedge formation that we might break and offer a nice push down to the breakdown of that multi-month base. If we break that UTL, I would look at the recent swing low for an entry.
ALERT: 6.35$
SETUP: BO50PB
IP 0.00%↑ 🎖️
A strong downtrend in the recent months drifted up at the 21dma going into the earnings. The trend seems to resume after today’s UTL break and rejection of the 10/21dma. I would look at the recent swing low for an entry.
ALERT: 32.18$
SETUP: BO21PB
🎖️ = Alex’s highest conviction setups
MARKET BREADTH & INTERNALS (RISK MODEL)
NYHL (New 52W Highs - Lows) - Acceleration on the downside and 20dma just turned down.
Trend @ -245 (⬇️)
NYAD (Net Adv/Decl) - Still in negative territory, but rather light. Not much thrust underneath today.
20dma @ +6 (⬆️)
MCOSINYA (McClellan Oscillator) - Still coming down.
20dma @ +71 (⬆️)
MMTH (Stocks > 200dma - LT breadth) - 10dma bounce and closed unchanged.
MMFI (Stocks > 50dma - MT breadth) - Gap down and almost closed it, but slight negative on the day.
MMTW (Stocks > 20dma - ST breadth) - Gap down below the 21dma, but closed above it in an unfilled gap.
VIX (Volatility S&P 500) - Now that’s the BIG DIVERGENCE AGAIN… VIX did not move at all on the market selloff today and even closed red. Will have to follow it very closely tomorrow again.
DXY (US $) - BIG follow-through and DTL breakout. Potential big move here and as we know this is not good for equities.
US10Y/TNX (US 10Y bond yield) - Also follow-through, but less powerful with a close in the lower half of the day.
IEI/HYG (Credit Spread) - Reversal continues as we gap up and close at the 21dma. We need to reverse here, otherwise, this will be concerning.
BTC/USD (Bitcoin) - BTC is not able to reclaim the 10dma & 20381$ level. Not bullish at all.
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
(XLE) Energy - big bounce at the 10dma and might retest a breakout tomorrow.
(XBI) Biotech - Tried to reclaim the 50dma, but got rejected again. I thing we go down and I’m short XBI via LABD.
(SMH) Semiconductors - Tried to reclaim the 184.19$ base level and got rejected at it and the 10dma. I think we go down and I’m short SMH via SOXS.
(IGV) Software - Big gap down and we rejected the 249.40$ level on the rest and close at the lows ON VOLUME. One of the weakest sector following the 50dma rejection.
(PBW) Clean Energy - Tried to reclaim the base but got rejected slightly and close mid-candle.
(TAN) Solar - Best looking sector right now with a bounce off the swing low pivot and closed above the 21dma. We might reclaim the 73.94$ level if the market is not crashing tomorrow. I’m noting the very low volume on that bounce tho.
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
LEADERS LIST
Overall leaders (PRIME Score)
INSW,YPF,RES,PBF,WTI,APA,PR,DO,AEHR,DINO,WFRD,ERF,CCRN,ENLC,PARR,TNK,FANG,ELF,VAL,CHX,
Fundamental leaders (FA Score)
ERF,DVAX,DRH,BHF,RES,SWAV,TRGP,WTI,DK,LBRD.K,ESTE,FANG,KOS,PR,JXN,LTHM,CPE,CALM,TELL,RUN,
Technical leaders (TA Score)
WFRD,YPF,ASC,INSW,XPRO,DO,PBF,CCRN,RES,CHX,APA,WTI,LPG,TNK,MRO,PR,ELF,SMCI,DINO,AMRS,
Relative Strength 1 Month (1M-RS)
CHX,CAR,ASC,PTEN,ULCC,VCYT,RES,MAC,SMCI,LPG,NCLH,WFRD,DO,EGHT,AEHR,ENLC,LAUR,HAL,XPRO,LEGN,
Relative Strength 3 Month (3M-RS)
YPF,WFRD,WTI,INSW,AMRS,PR,XPRO,ASC,NTNX,CCRN,PBF,DO,APA,RES,MRSN,SLB,MRO,TNK,MUR,PARR,
Relative Strength 6 Month (6M-RS)
YPF,INSW,ASC,WTI,WFRD,CCRN,MRSN,TNK,STNG,PR,XPRO,PBF,AEHR,ELF,DO,AMRS,CPRX,PARR,SLB,DINO,
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