Good evening folks, here’s another daily Market Update & Focuslist!
General market Review that includes my Bullish & Bearish scenarios
Market Breadth & Internals
Economic Calendar
Sectors Review
Leaders list
My own Portfolio update
My own daily Focuslist including setups, alert levels & explanation
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MARKET REVIEW
Russel 2K (RTY) Daily:
A very interesting day that gives new information and clues on the potential market direction. When looking at bottoms, I like to see character changes. This morning, after Initial Jobless Claims, the market rollover and was looking like we were going down again. Then came Jerome Powell speech at 9:10 EST, and the market continued lower before being bought. Then the market rolled over again around 11:00 EST, only to get bought heavily again. These successive dips being bought are a clear change of character from the last 2 weeks’ action.
That being said, we still have challenging and potential resistance levels above, like;
1846$ area
10 + 21 + 50 dma
I’ll monitor the action around these levels very closely in the next few days to see if we roll over or if this current potential rally has legs.
What are the levels I’m watching on RUSSEL tomorrow?
On the upside (bullish scenario)
IF - Already in the bearish scenario, but a close above 1846$ and the 21/50dma would increase the constructive action and confirm a more robust bullish scenario
THEN - Continue Increasing the exposure with respect to my Market & Portfolio exposure model
On the downside (bearish scenario)
IF - A close below 1800$ area
THEN - Reduce exposure & potentially back to cash
MARKET BREADTH & INTERNALS
NYHL (New 52W Highs - Lows) - NNH deccelerated with a close @ -78. Pretty impressive how few Net New Lows we had in that last market pullback, considering the magnitude & speed of the move. An extreme of -236 while we had -500 to -1000 readings early this year. Tells me that individual stocks are holding & making new highs despite this move. We saw constructive action in names building bases instead of breaking down.
NYAD (Net Adv/Decl) - Net advances faded today @ 320.
MMFI (Stocks > 50dma) - Following through, this is positive action.
MMTW (Stocks > 20dma) - Following through, this is positive action.
MCOSINYA (McClellan Oscillator) - McClellan cooled off again and closed @ 149.40 which is going in the right direction… Going slowly which is good…we don’t want to be over bought too soon ;)
VIX - VIX with very constructive action again today. We tried to reclaim that consolidation box today when we tried to rollover but never been able to hold in it and closed at it’s low and below 24.33$ level. Going in the right direction…down!
PCCE (PUT/CALL EQUITY RATIO) - 0.88
DXY (US $) - US$ tried to reclaim the pivot today but got rejected once again. We are breaking back in that base breakout area on the futures and are currently below the 10dma. This is an interesting action and potentially very positive for equities if we can really fail that breakout. The next few days will tell!
US10Y (US 10Y bond yield) - Supported at the 10dma and UTL. Trend still intact.
IEI/HYG (Credit Spread) - Credit Spread with a pretty big drop again today. Closed below all kma’s but still in support area. Need more information here as well, but 2 big days like that is really positive.
BTC/USD (Bitcoin) - Unchanged today, not much information here.
CL_F (Crude Oil) - Found some support, but still below all kma’s and in clear downtrend for now.
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
Leading sectors:
(TAN) Solar - Leading sector. Took a little breather today after yesterday's action, and it’s ok. Will look for that DTL breakout tomorrow.
(XBI) Biotech - Biotech with the mini-channel DTL breakout ON VOLUME I was looking for. That’s a big & positive move today. This market might have leg after all.
(PBW) Clean Energy - opened lower and closed slightly positive. Not much information, still in the wedge and above stage 1 base.
On watch sectors:
(SMH) Semis - Been able to hold Friday’s low and stay above the support area from June/July lows. This is positive ST action, but we are still below the 5dma here…
(XLE) Energy - Energy tested the 50dma again and closed green. Still in mini-channel.
(IGV) Software - Follow through and closed above 5dma again.
(XLF) Financial - mini-channel DTL breakout ON VOLUME.
(FDN) Internet - Reclaim the stage 1 base area bottom level. Still below UTL & 50dma.
(XME) Metals & Mining - Held Friday’s low and bouncing from the stage 1 base breakout area.
(XRT) Retail - Bouncing from Friday’s low and reclaiming UTL. Still below 50dma & recent base resistance area.
Alex’s TAKEAWAYS:
We follow through on yesterday's bounce and we also saw a change of character. On top of that, a majority of market leaders we identified in the last few weeks are breaking out in the last few days…ON VOLUME. That’s the big difference for me compared to previous attempts.
We have to stay careful as we have some potential resistance ahead, but what I’m seeing is very positive right now.
I’ll take it one day at a time and monitor how we react to overhead resistance levels & kma’s.
DEFENSE, BUT STAY POSITIVE & OPEN🛡️
LEADERS LIST
Overall leaders (PRIME Score)
SWAV,STEM,CPRX,MRSN,XMTR,INSW,ENPH,RXDX,RXRX,ARLP,YPF,PRVA,PRTY,ELF,HIMS,DHT,CALM,EURN,AIV,DCPH,
Fundamental leaders (FA Score)
RES,AMR,HCC,DK,MRO,ERF,DVAX,MGM,DRH,TELL,LBRT,BHF,ENLC,SWAV,LC,TRGP,SLDP,WTI,MPC,FANG,
Technical leaders (TA Score)
CPRX,MRSN,RXDX,STEM,RXRX,YPF,ENPH,PRTY,SWAV,DCPH,XMTR,ARRY,RVNC,HIMS,NAT,PRVA,SPWR,WOLF,ELF,INSW,
Relative Strength 1 Month (1M-RS)
AVYA,YPF,PRTY,PDD,CPRX,RXRX,BHC,NTNX,INSW,MRSN,XMTR,WFRD,UDMY,NAT,RXDX,INDI,CSIQ,ACVA,ULTA,MATV,
Relative Strength 3 Month (3M-RS)
APDN,CPRX,MRSN,RXDX,TH,STEM,PRTY,BFLY,ARRY,RVNC,ZLAB,HIMS,AEHR,ENPH,RXRX,SWAV,YPF,PRVA,AGEN,DM,
Relative Strength 6 Month (6M-RS)
TH,CPRX,APDN,MRSN,DCPH,ARRY,CELH,STEM,RXDX,SIGA,ENPH,CEIX,SWAV,STKL,STNG,PRVA,RXRX,BFLY,ELF,HRB,
PT PORTFOLIO UPDATE
Recent operations:
New trade-in AHT that failed, then good entries on CELH, STEM & PRVA. I trimmed 1/4 in all of those again tonight.
Position management GAMEPLAN:
Maximum new exposure: 42% (based on Portfolio & Market exposure model)
Position size: 1/2 positions max (10% of equity)
Position management
First trim: sell 25% initial position
Trim @ first day EOD
SL moved @ breakeven
2nd trim: sell 25% initial position - 10dma EOD break
3rd trim: sell 50% initial position - 21dma EOD break
Scale-out approach
Alex’s FOCUSLIST
Biotech name that is set up for a continuation base breakout after an initial 50% push in 2 days following the last ER. Never really got below the 10dma
UPDATE: Tried to breakout but came back right at the entry pivot by EOD. That’s the type of move that I want to still monitor during a market bounce. We could simply take off again tomorrow.
Alert - 8.02$
Still building that wedge after the recent PEG. Holding the 21dma and still looking at the DTL or 6.84$ pivot for an entry.
UPDATE: Tried to breakout out the DTL today but was not ready. I will use yesterday’s high for a new entry pivot.
Alert - 6.65$
ON 0.00%↑ 🎖️
A recent semiconductor leading name that pulled back to the 50dma in the recent market PB. We broke from the mini-channel today. The 71.98$ is an important level to break to continue higher, so it’s a good pivot to use for an entry.
Alert - 71.98$
Recent market leader that found support at the 21dma in the last few days and might be ready to resume the uptrend if the market is good. I like the 40% move-up following ER and the amazing RS it showed until it had a downgrade.
Alert - 301.00$
Ok, we were due for a more speculative name to play for a short swing. 100% move following ER and pulled back pretty quickly to the 50dma. Since then, I like the way it flags right above all kma’s and building higher lows on low volume. Higher risk, but could move fast for a quick swing.
Alert - 6.35$
80% run from the lows and pulled back on low volume during that recent market pullback. We just broke out of that mini-channel today and I’ll be looking at the recent swing high pivot for an entry.
Alert - 66.79$
TH 0.00%↑ 🎖️
180% move from the lows and consolidation for quite a time but showed great RS early in that market pullback. We just found support at the 50dma and I’m looking at a potential DTL breakout to confirm the mini-channel b/o tomorrow. I would use either the DTL or the recent swing high pivot.
Alert - 13.15$ + DTL
🎖️ = Alex’s highest conviction setups
NOTE: I have the discipline to build a detailed FocusList each night, but I want to emphasize that I DON’T take all the trades that would trigger their entry. Some reasons to take a specific position over another, or not take any trade even if the alert is activated, are:
The general market price action
My Market-Based exposure model
My Portfolio-based exposure model (progressive exposure)
A high conviction setup
Price action around the entry pivot
Then even if I take a trade at the entry pivot, I will very often sell it right away if the market roll over or the stock is backing out of the gate. I prefer to re-enter on the entry pivot reclaim than to be stuck with a larger loss. Please study closely all my education articles to learn how I handle trades around these entry pivots.
REFERENCES
Articles on the system:
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