Alex's daily Market update & Focuslist - 06/28
The market followed-through on yesterday's bounce.
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Enjoy tonight’s letter!
Alex ✌️
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GENERAL MARKET ANALYSIS
NASDAQ (NQ_F) Daily
Price Action Analysis:
NQ followed through on yesterday’s bounce attempt with a break above yesterday’s high pivot on higher volume.
This is very constructive.
We are now 7.5% above the 50dma. We are still extended, but getting there.
RUSSELL 2K (RTY_F) Daily
Price Action Analysis:
Small-caps did well today and led the other area of the market. RTY reclaimed yesterday’s high pivot and closed above all kma’s.
Time for small-cap to outperform and catch-up?
S&P500 (ES_F) Daily
Price Action Analysis:
10dma retest and closed right at yesterday’s high pivot.
PT MARKET MODEL (PTMM) & INTERNALS
Price closed UP (+0.77%) and still above ALL KMA's.
Breadth was POSITIVE and followed through on yesterday’s thrust (+215)
U/D volume at 1.46
MSCI UPTREND + BELOW 10dma.
MOMENTUM flipped back up across the board, with the 5-day ratio jumping at 1.52 today.
NNH at +15 (nice bounce from yesterday near flat reading.
Bottomline:
PT MODEL = GREEN market signal (🟩)
Today we saw the market follow through on yesterday’s bounce attempt. This is very constructive and exactly what we wanted to see. MSCI just flipped back up but remains at risk if we see a weak participation tomorrow. We are now back on a FULL GREEN market signal as of today.
Internals
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
We remain below the weekly DTL but are certainly in a pivotal area.
Back below all kma’s - exactly what we wanted to see to confirm the pullback reversal attempt.
BTC/USD (Bitcoin)
We could not follow through on the channel breakout, and we are now retesting the lows. We remain above all kma’s, and more time is needed to digest the recent move.
SECTORS ANALYSIS
Small caps & Growth stocks outperformed today, and it’s good news for our style!
A bit of rotation again today, while not all sectors participated in this follow-through attempt.
Energy, Communication Services, and Consumer Discretionary led the day.
Technology was pretty FLAT today.
Themes & Subsectors
Online Retail IBUY was a clear leader today with a bullish outside week. We could see more buying in the future.
Transport (IYT) with a stage 1 base breakout
Media (PBS) with a bullish outside week
LEADERS (top10)
Leading sectors:
SMH Semiconductors: Flat today but seems to be gapping above the 151.71$ pivot. (MU earnings tonight)
IGV Software: Trying to breakout from the recent pullback with another small push today and now sitting right at DTL.
A LOT of software individual stocks setup tonight. I think we might push tomorrow.
ITB Home Builders: New high for this leading sector, but it seems tired and very extended on the daily. Due for a PB or digestion, IMO.
XLY Consumer discretionary: Trying to breakout into new highs. Tomorrow is important.
FOCUS & LEADERS LIST
TPR - TAPESTRY, INC. (WBPB) - Alert: 44.07, SL: 41.89
Tapestry, Inc. provides luxury accessories and branded lifestyle products in the United States, Japan, Greater China, and internationally. The company operates in three segments: Coach, Kate Spade, and Stuart Weitzman.
Leading sector (Consumer Discretionary XLY, but not leading THEME - Luxury LUX )
10/30wma aligned, squeezed & uptrend
It just bounced from 10+30wma, but still not extended.
72% prior uptrend
5 weeks base & consolidation following the weekly DTL breakout
Higher lows and surfing the kma’s before the potential breakout.
1.28 U/D ratio.
NET - CLOUDFLARE, INC. (WBPB) - Alert: 67.36, SL: 62.22
CloudFlare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company offers an integrated cloud-based security solution to secure a range of combinations of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and IoT devices. Its security products comprise cloud firewall, bot management, distributed denial of service, IoT, SSL/TLS, secure origin connection, and rate limiting products.
Leading sector (Technology XLK + Software PSJ + Cloud Computing SKYY)
Solid fundamentals & growth
Clear recent structure acting as support with now four weeks of DTL & support retest.
10/30wma aligned but mostly flat - still in stage 1 ish
Still, a bit extended from the 10wma. (12%)
80% prior uptrend
Four weeks consolidation.
Higher lows before setup.
1.45 U/D ratio.
MNDY - MONDAY.COM LTD (BORL) - Alert: 176.03, SL: 163.01
Monday.com Ltd. and its subsidiaries develop software applications in the United States, Europe, the Middle East, Africa, and internationally. It provides Work OS, a cloud-based visual work operating system that consists of modular building blocks used and assembled to create software applications and work management tools. The company also offers product solutions for marketing, CRM, project management, software development, and other fields, and business development, presale, and customer success services.
Leading sector (Technology XLK + Software PSJ)
Solid fundamentals & growth + great reaction to last ER.
Stage 1 base area retest
10/30wma aligned and UP.
Still, a bit extended from the 10wma. (13%)
150% prior uptrend
Five weeks consolidation.
Shakeout before setup.
1.99 U/D ratio (!!!)
SHOP - SHOPIFY INC. (BREAKOUT) - Alert: 64.62, SL: 61.58
Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America.
The company's platform enables merchants to displays, manages, markets, and sells its products through various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, new buyers and build customer relationships, source products, leverage analytics and reporting, manage cash, payments and transactions, and access financing.
Leading sector (Technology XLK + Software PSJ)
Great reaction to the last ER.
10/30wma aligned and UP.
Close to the 10wma. (10%)
177% prior uptrend
Eight weeks consolidation. (A bit rising)
Higher lows before setup.
0.96 U/D ratio (that’s weak, but daily is 1.46)
INDICES/SECTORS:
IHI - iShares:US Med Dev ETF (BREAKOUT) - Alert: 56.35, SL: 54.71
(TMO ABT MDT ISRG EW SYK BSX DXCM BDX IDXX)
Stage 1 base breakout.
LEADERS LIST
Overall leaders (PRIME Score)
SDGR,IMGN,MARA,RDFN,MDB,PLTR,NVTS,APP,CELH,SMCI,IOT,ELF,VRT,NVDA,EXPI,EXAS,XP,UBER,PANW,TSLA,
Fundamental leaders (FA Score)
RCL,ELF,NCLH,CCL,CELH,TMDX,DT,WNC,HTGC,SDGR,WYNN,EXAS,FUTU,CRSP,ALGM,ARRY,CSIQ,ALB,MGM,PANW,
Technical leaders (TA Score)
IMGN,MARA,RDFN,CCL,SDGR,MDB,PLTR,APP,RCL,EXPI,SMCI,IOT,SOFI,NVTS,XP,NVDA,VRT,NCLH,RIOT,TSLA,
Relative Strength 1 Month (1M-RS)
CCL,MARA,SOFI,NCLH,RDFN,BRZE,IMGN,GTLS,MDB,PLAY,DAL,BBIO,ATEC,RCL,JBLU,TSLA,GH,TWST,COIN,FIVN,
Relative Strength 3 Month (3M-RS)
IMGN,SMCI,XP,PLTR,MDB,SDGR,CCL,APP,VRT,RDFN,EXPI,RILY,CELH,MARA,CFLT,TGTX,SGH,RCL,NCLH,BILL,
Relative Strength 6 Month (6M-RS)
IMGN,MARA,SMCI,RDFN,RIOT,NVDA,PLTR,NVTS,SDGR,APP,TGTX,CCL,MDB,META,RCL,IOT,DKNG,EXPI,ACVA,ACLS,
Alex’s TAKEAWAYS & GAMEPLAN
The market followed through and confirmed the bounce attempt yesterday, so this is good news! This is backed by breadth + momentum + price.
It’s possible we need to base & consolidate before pushing higher, but so far, I like what I see in the market and individual stocks.
With Small-cap growth leading here, this is also good news for the type of stocks I normally trade, so I’ll want to see that leadership continue as we might catch up with the recent mega-caps performance (while they digest).
We never know if this was the first leg of a larger pullback, and we’ll rollover by being rejected on a lower high on the indices, so despite how good things are looking right now, always be ready for a scenario where we pullback further down.
GAME PLAN:
Exposure model = GREEN market signal (🟩)
I am being aggressive right now as I see the action I want to see out of this first pullback after the recent general market breakout. That first pullback out of a bear market could be a huge opportunity.
If I see a red flag, I’ll quickly reduce exposure to protect my equity. If things work out tomorrow, I plan to add another 10-20% exposure.
Economic news/events:
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
PRIME MODEL SPREADSHEET (PT_database)
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REFERENCES
Articles on the system:
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