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Alex ✌️
GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Today, we open slightly higher and really searched for a direction for most of the morning before finally breaking out of the intraday wedge on the 3780$ level retest this afternoon. We pushed higher and finally closed ABOVE the 50dma, which was the level I was watching closely last night.
Tomorrow, it would be really positive if we could hold the kma’s and close above the 3820$ level. Keep in mind that we have a very big potential resistance area above, around 3855/3903$. So if we come to retest that area tomorrow, this will certainly be an opportunity to trim or take profit on the open positions that I carried overnight.
Keep in mind that we have quite a packed week with the mid-term elections on Tuesday night that could affect the market on Wednesday, and also CPI data release Thursday morning that will be very important and potentially very volatile news.
NASDAQ (NQ_F) Daily
RUSSELL 2K (RTY_F) Daily
In the following sections of tonight’s letter, I’ll cover very important parts of my daily routine & preparation for tomorrow’s trading session.
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Alex’s TAKEAWAYS
Overall I remain VERY cautious due to the mid-term election and the CPI release later this week. I don’t want to get caught in a surprise outcome or a hot CPI # that would roll over that market. This week, I will stay very nimble and trim aggressively or even be 100% cash each night at the close. The is just too much overnight risk this week.
Mixed signals again tonight…
What I like:
The VIX is trending down and is now below 25
Breadth followed through on Friday’s reversal - BUT, not that strong…
Follow-through on DXY selloff.
ES_F bounce at an important support area - follow-through today and close above the 50dma.
What I don’t like:
Outside of Energy, there are not a lot of interesting long setups
10Y yields continue higher and just broke the wedge DTL
ES_F is just below important potential resistance
Gameplan:
As pointed out, tomorrow I will be looking to take profit on my long swings as I don’t want to be caught up in overnight risk. So I will start trimming aggressively my SPXL trade if we reach 3855$ level, and will close if we undercut 3780$ on the downside. My goal is to be 100% cash tomorrow by EOD.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
LONG FOCUSLIST
LULU 335.71, STLD 97.02, DEN 97.21, PBF DTL+48.37, HRMY 59.27,
LULU 0.00%↑
Still building nicely above the 50dma. I am looking at the same 335.71$ pivot as being the confirmation of the base area retest & continuation.
UPDATE: retested the 10dma and close pretty much unchanged below the entry pivot. If we get a good market push tomorrow, we could run.
ALERT: 335.71$
SETUP: BORS
STLD 0.00%↑
Very strong steel name with a recent run post-ER right into almost new highs, retesting the 100$ level. I am now seeing a very narrow and tight consolidation back to the 10dma which could offer a great R/R entry. We just broke the mini-channel DTL and we could retake the most recent swing high to trigger the entry.
UPDATE: was not able to push out of the pivot today but it’s still valid for tomorrow.
ALERT: 97.02$
SETUP: WBPB
DEN 0.00%↑ 🎖️
Energy name with a long retest of the base area and the 50dma in the past few weeks. We just had ER and we broke the wedge DTL last Friday and retested it today. I would look at the recent swing high pivot for an entry.
ALERT: 97.21$
SETUP: BORL
PBF 0.00%↑ 🎖️
Another energy name that is always leading the sector, even in the March energy run. We are now building a nice consolidation at the base area. I will be looking at the DTL for a potential quick move. Notice the higher lows and how we respected the 10dma perfectly in the last few days.
ALERT: DTL + 48.37$
SETUP: BORS
HRMY 0.00%↑
Recent IPO that just made a new high on the last ER. We are in the process to retest the base area, and a bounce here could be pretty powerful as this name has a tendency to make. I will be looking at PEG high pivot for an entry.
ALERT: 59.27$
SETUP: BORS
🎖️ = Alex’s highest conviction setups
SHORT FOCUSLIST
MARKET BREADTH & INTERNALS (RISK MODEL)
NYHL (New 52W Highs - Lows) - Improving again today
Trend @ -216 (⬆️)
NYAD (Net Adv/Decl) - Trend up and still in the positive.
20dma @ +281 (⬆️)
MCOSINYA (McClellan Oscillator) - Improving and trending higher.
20dma @ +101 (⬆️)
MMTH (Stocks > 200dma - LT breadth) - follow-through…but weak…?
MMFI (Stocks > 50dma - MT breadth) - follow-through…but weak…?
MMTW (Stocks > 20dma - ST breadth) - follow-through…but weak…?
VIX (Volatility S&P 500) - We continue down pretty aggressively again today after a gap up on Friday’s high. But we finally closed below 25 and the recent base area.
DXY (US $) - Tried to reclaim the 50dma, but rejected it and follow-through after Friday’s big move down. We are now retesting 109.77$ area which could be potential support.
US10Y/TNX (US 10Y bond yield) - 10Y yields are breaking out to new high after today’s DTL b/o.
IEI/HYG (Credit Spread) - retested 10dma and rejected
BTC/USD (Bitcoin) - BTC rejected the 2121012$ level and was not really able to bounce off that 10dma too.
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
(XLE) Energy - The strength here is quite impressive…it simply refuses to pullback and we are now retesting the base high. A breakout here could be pretty powerful… just be careful to not play it too aggressively because we are still pretty extended IMO.
(XBI) Biotech - XBI looks like a solid WB short setup to me..
(SMH) Semiconductors - One of the strongest sectors right now with yet another follow-through move and close above the 50dma.
(IGV) Software - We are holding the Oct. low and seem to build some interesting bottoming action. Or simply retesting overhead resistance level.
(PBW) Clean Energy - Not able to reclaim the 21dma…looks like a potential rollover to me.
(TAN) Solar - TAN was not able to bounce back again today…might be a rollover here as well.
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
LEADERS LIST
Overall leaders (PRIME Score)
ASC,INSW,PR,WTI,AEHR,YPF,RES,DO,PBF,ERF,WFRD,XPRO,PDCE,APA,MUR,PARR,TNK,CVI,DINO,MRO,
Fundamental leaders (FA Score)
BHF,RES,SWAV,SIGA,WTI,ASC,DRH,TNK,ESTE,FANG,PR,JXN,LTHM,CPE,CALM,PDCE,RUN,MUR,TALO,OVV,
Technical leaders (TA Score)
WFRD,ASC,INSW,PR,AEHR,CHX,XPRO,WTI,SLB,DO,YPF,APA,CPRX,PARR,ELF,MRO,PBF,LPG,ERF,RES,
Relative Strength 1 Month (1M-RS)
BAND,CHX,VCYT,ULCC,MAC,PTEN,SMCI,ASC,LPG,WFRD,CAR,MRNA,RES,XPO,AEHR,CNK,HAL,VIR,NCLH,EGHT,
Relative Strength 3 Month (3M-RS)
WFRD,YPF,INSW,PR,WTI,XPRO,SLB,PBF,ASC,BTU,APA,DO,MRO,CHX,MUR,PUMP,PDCE,RES,CCRN,HES,
Relative Strength 6 Month (6M-RS)
AEHR,YPF,INSW,ASC,ELF,WFRD,CPRX,CCRN,TNK,WTI,SWAV,STNG,STKL,PR,PBF,MRSN,PARR,XPRO,CHX,BTU,
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