Alex's daily Market update & Focuslist - 01/24
Earnings season officially in with MSFT big report!
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Alex ✌️🙏
GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Price Action Analysis:
The market follows through on Friday’s bounce.
ES_F retested the 4016$ level right at the open and was able to bounce from it and rally in a choppy way following that retest. The market was unable to push higher and formed a lower high.
We have formed an inside day right at the 4016$ level. Tomorrow's break of today’s range will give good information on the potential future market direction.
The market was waiting on MSFT earnings at the market close today. The initial reaction was positive as it went +5% after-hours following the report. Still, during the conference call, they guided future earnings lower, and we lost every gained and closed post-markets lower than the closing price. This definitely put some pressure on the Futures, and we’ll have to see tomorrow if the buyers will step up again.
I always keep both scenarios in the back of my head. If we close the week down from here on ES_F, this will not be a great-looking chart at all. 4016$ rejection, bear market DTL rejection from a 30w/10w/5w ema's launchpad and a lower high structure. I still like the action of the individual stocks and breadth power...but we have to push here IMO and not rollover.
Always keep an open mind on both possible scenarios (bull/bear). It's a big part of my success.
That said, if we break higher from here and close this week green and above these levels, this will be a strong signal confirming the recent action we saw in the last two weeks.
On the upside,
4082$ on ES_F will be a pretty big potential resistance level to watch.
On the downside,
The bear market DTL and the 4016$ level will be important levels to find support, and the market will come under pressure again.
NASDAQ (NQ_F) Daily
RUSSELL 2K (RTY_F) Daily
In the following sections of tonight’s letter, I’ll cover essential parts of my daily routine & preparation for tomorrow’s trading session.
✅ My overall current market Takeaways & GAMEPLAN for tomorrow
✅ PRIME_LIST (top 5 potential TML’s)
✅ My daily Focuslist, including setups, alert levels & explanation (LONG/SHORT)
✅ My Portfolio update
✅ Sectors Review
✅ Market Breadth & Internals
✅ Economic Calendar
✅ Prime Model spreadsheet (PT_database)
✅ Leaders list (technicals, fundamentals & potential TMLs)
Alex’s TAKEAWAYS
The market could not bounce from the 4016$ level, and we did not react well to MSFT earnings, pushing the futures below that level.
Overall, I remain positive about this market. As long we see pullback being bought, individual names showing constructive action, and my position holding…I’ll continue to play this rally, bull, or whatever you want to call it.
But, I also keep in mind that we are at a CRITICAL level, and if we were to reject this area on ES_F (4016$+bear market DTL+10/30wma) along with closing the week negative…this would put us in a really bad spot IMO. So, I’m playing it, but I’m ready to jump ship if things turn sour.
It’s make or break
Some observations:
ES_F is above the 4016$ level but under-cutting it on futures following MSFT ER.
Breadth reversal today, creating a LOWER HIGH on McClellan OSC.
Leading names seem to act in a very healthy way and take some pause after extended runs. Overall individual names are not giving red flags.
VIX < 20 and penetrating the important bear market support area. (very bullish if we break lower)
DXY (US$) - rejected at the 10dma and pushing lower
My MT_SIGNAL (McClellan sum. index & 10dma) is in CONFIRMED UPTREND.
My LT_SIGNAL (Cumulative new 52W H/L & 50dma) CROSSED the 50dma and confirmed a BULL market signal.
Market health & Trend indicators:
LT_SIGNAL: uptrend (black) + ABOVE 50dma = BULL market developing (🟩)
MT_SIGNAL: uptrend (black) + ABOVE 10dma = UPTREND (🟩)
Tomorrow's economic news/events:
GAME PLAN:
I feel that until we confirm a clear push on the indices and break of that DTL on ES_F, I might stay around that level of exposure and no more.
For tomorrow, I’m not saying a lot of high-quality setups in the focuslist, and I feel that I’ll have to manage my current positions and not continue to increase my current exposure considering the critical inflection area the market is.
EXPOSURE MODEL:
PRIME_LIST (NEW)
AEHR FOUR ARRY SHLS MELI
AEHR: Failed break higher, we need to cool down and consolidation here after such a run IMO.
FOUR: This is not great action today. Failed yesterday’s high breakout, then a big reversal to close at the low on one of the highest volumes of the last few weeks. I will be watching if we can build a flag contained by that DTL & UTL above the 21dma. That’s a first red flag. Let’s see if we can find support.
ARRY: Base breakout today. Very constructive action…now let’s see if we can follow through tomorrow.
SHLS: Tried to break that base level too, but got into some resistance, closed unchanged, and around 28.90$ base level.
MELI: Acting very well today with a higher low reversal and push to a new high. We never touched the 10dma, so I’m waiting for a deeper consolidation.
FOCUSLIST (LONG)
SPR 34.28, NE 40.89, BTU 28.56, CPRI 64.38, MPWR 429.6,
SPR - Alert: 34.28, SL: 32.4
Aerospace & defense stock is setting up a nice BO21PB in the early stage 2 uptrend. It broke the channel today from the 21dma bounce.
NE - Alert: 40.89, SL: 39.56
Tomorrow is the Oil inventory report, and XLE chart looks like a potential base breakout might be playing out. NE is a name that is still strong and, above all kma’s formed a tight BO10PB pullback setup.
BTU - Alert: 28.56, SL: 27.25
BTU is a name that can run very fast from low entries in the base. I like how the Coal commodity bounced from the recent DTL, and BTU has been tightening up in the last few weeks on the right side of the chart. We are building higher lows and lower highs. I would look at the DTL, 50dma & recent swing high reclaim as an entry signals.
CPRI - Alert: 64.38, SL: 61.2
Luxury retail name that is still building its base after a 21dma pullback. Slower mover but trend well.
MPWR - Alert: 429.6, SL: 415.52
Stage 1 base breakout play, so further from 52w high. I like the breakout we had yesterday, and I’m looking for the retest of the area that would lead to my BORS setup.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
SECTORS PERFORMANCE
Leading sectors:
(SMH) Semiconductors - Inside day at the base top level. Nothing to worry about, need to digest recent gains.
(TAN) Solar - Inside day. It still looks constructive, above all kma’s.
(XBI) Biotech - 10dma bounce at the open, then a strong push through that DTL to breakout the wedge I highlighted last night. Best looking sector for ST action IMO coming out of a long consolidation and still in the early moves of an uptrend.
(GDX) Gold miners - Another 10dma touch and bounce today. The trend is still intact, and we closed above the 32.75$ pivot.
(XLE) Energy - Another 21dma & UTL bounce today and closed right back at the 90.50$ level. (That long tail might have to do with the NYSE glitch this morning)
(XME) Metals & Mining - 10dma bounce today and closed above yesterday’s high. Good action, and the trend is still intact.
(XRT) Retail - Was not able to break that stage 1 base level. Inside day.
(IGV) Software - We could not follow through on yesterday’s stage 1 base breakout, but we did not break back below the level either. Seems like a pause to me.
MARKET BREADTH & INTERNALS
$NYHL (Cumulative new 52W Highs/Lows & 50dma)
CROSSED the 50dma and confirmed a BULL market developing signal
LT_SIGNAL: uptrend (black) + ABOVE 50dma = BULL market developing (🟩)
!MCSUMNYA (McClellan summation index & 10dma)
MT_SIGNAL: uptrend (black) + ABOVE 10dma = UPTREND (🟩)
$NYMOT (McClellan Oscillator - Breadth extensions)
We made a lower high with today’s breadth reversal. Will we make a higher low and wedge or confirm a breadth downtrend with a lower low?
NYHL (New 52W Highs/Lows) - Unchanged today.
NYAD (Net Adv/Decl) - Slightly negative today, almost even.
MMTH (Stocks > 200dma - LT breadth) - Inside day.
MMFI (Stocks > 50dma - MT breadth) - Inside day.
MMTW (Stocks > 20dma - ST breadth) - Lower high?
VIX (Volatility S&P 500) - VIX < 20 and penetrating the important bear market support area. (very bullish if we break lower)
DXY/TNX (US$) - Still below all kma’s and pushing downward.
ECONOMIC & EARNINGS CALENDAR
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
LEADERS LIST
Overall leaders (PRIME Score)
AEHR,FOUR,NINE,ARRY,RCL,SHLS,H,MELI,OII,VAL,PR,TGTX,HGV,CCL,JXN,ALGM,RUN,PARR,UAL,LSCC,
Fundamental leaders (FA Score)
NOG,FRO,CALM,PR,ESTE,LTHM,CPE,RUN,AEHR,HGV,TRIP,GFS,JXN,LBRT,DVAX,CEIX,DK,LNTH,ABNB,PBF,
Technical leaders (TA Score)
TGTX,ARRY,OII,MELI,AEHR,FOUR,SHLS,RCL,ALGM,NINE,CLF,CCL,RMBS,H,LSCC,ONON,VAL,MNDY,GPS,UAL,
Relative Strength 1 Month (1M-RS)
TGTX,CHPT,CNK,MELI,LTHM,EXPE,BTTR,CCL,CLVT,DKNG,AAL,BLNK,UAL,ARRY,ONON,TSLA,NCLH,ABNB,MNDY,CLF,
Relative Strength 3 Month (3M-RS)
TGTX,NINE,BAND,OII,ARRY,AEHR,LSCC,ALGM,CPRI,CSIQ,RMBS,KLAC,NLY,FOUR,SHLS,WMG,IGT,SPR,TOL,MELI,
Relative Strength 6 Month (6M-RS)
NINE,TGTX,AEHR,OII,ARRY,BAND,RMBS,FOUR,RCL,PARR,VAL,SHLS,ALGM,JXN,CPRX,PR,LSCC,IGT,CPRI,MELI,
REFERENCES
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