Good evening traders! 👋
What we’ll cover in the Newsletter tonight:
General market analysis ($NQ/$ES levels)
Market Breadth & Internals (Risk model)
Prime Model spreadsheet (PT_database) (NEW!)
Economic Calendar
Sectors Review
Alex’s TAKEAWAYS (+Gameplan)
Leaders list
Alex’s Portfolio update
LONG Focuslist
SHORT Focuslist (NEW!)
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Alex ✌️🛡️
GENERAL MARKET ANALYSIS ($NQ/$ES levels)
NASDAQ ($NQ) Daily
Today, NQ started the day with a nice bounce from the 11068$ June low level and reclaimed the 11253$ level. We were not able to push higher and got rejected at the 21dma, before closing near the lows just above 11068$. We broke below that level on the futures, so we’ll have to see where we open tomorrow. It’s 3 21dma rejections in a row with lower highs… it’s either a very clean short setup or a bull flag.
Tomorrow, I want to see first if we can reclaim the 11068$ level and close above it. Ideally a CLOSE above the 11253$ level or the 21dma.
$NQ levels on the upside (resistance)
11068$ level (3 Oct. low)
11253$ level (recent swing low)
11285$ level
11534$ level (Sept. structure)
the 10dma
$NQ levels on the downside (support)
10845/10890$ area (2020 structure / June low)
10656$ level (2020 structure)
10484$ (Oct 13th low)
S&P500 ($ES) Daily
$ES levels on the upside (resistance)
3735/3780$ area
the 10dma
$ES levels on the downside (support)
3639$ last week swing low pivot
3596$ level (2020 structure)
3509$ level (2020 structure)
3388$ level (2020 structure)
This was a FREE preview of my daily Market update & Focuslist letter. In the following sections, I’ll cover important parts of my daily routine & preparation for tomorrow’s trading day that you don’t want to miss!
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MARKET BREADTH & INTERNALS (RISK MODEL)
NYHL (New 52W Highs - Lows) - acceleration on the downside @ -375.
20dma @ -440 (⬆️)
NYAD (Net Adv/Decl) - Negative reading again today, but still a bit above yesterday @ -1215.
20dma @ -364 (⬆️)
MCOSINYA (McClellan Oscillator) - McClellan just turned negative today @ -12.
20dma @ -109 (⬆️)
MMTH (Stocks > 200dma - LT breadth) - LT breadth was not able to reclaim the 25.05$ pivot and close below all kma’s. Not a great look.
MMFI (Stocks > 50dma - MT breadth) - MT breadth tried to rally at the open, but got rejected again on that resistance area retest. We close right in the 10/21dma, so might act as support here tomorrow.
MMTW (Stocks > 20dma - ST breadth) - ST breadth continue lower and closed below the 49.43$ pivot, but still above the 10dma.
VIX (Volatility S&P 500)- VIX confirmed the UTL break and also closed below 30$… this is quite the divergence in the last 3 days. Market or VIX tells the truth…? Just looking at the VIX, this is bullish action.
DXY (US $) - US$ continue to wedge and was not able to sell off again today as it bounced at the 21dma and closed unchanged. I’m watching that DTL very closely for an upside breakout that would really crack the market IMO.
US10Y/TNX (US 10Y bond yield) - Destruction in the bond market continue and the market doesn’t react yet. Another 2%+ day and trending above all kma’s.
IEI/HYG (Credit Spread) - First good bounce with a higher low and a close above the recent swing lot 1.56$ pivot. Will have to watch this one closely tomorrow.
BTC/USD (Bitcoin) - Bitcoin closed very clearly below that UTL today, with increasing volume. This is beginning to look like a possible break lower on here. We are below all kma’s and seem to pick up momentum on the downside.
PRIME MODEL SPREADSHEET (PT_database) 🆕
Access to the PT_database 👇
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
Sectors Relative Strength - Weekly (RS vs SPY)
Top 3: CIBR- FDN - IGV
(XLE) Energy - The energy sector found resistance at the 85.18$ recent base high and closed unchanged despite a pretty nasty reversal on CL_F. I don’t think we necessarily rollover but might just need time to pause a bit. Crude Oil will certainly be important to watch.
(XLV) Health Care - XLV rejected the base top level and close below 123.90$ pivot. At risk.
(PEJ) Leisure & Ent. - Just like NQ, it looks either like a bull flag and we resume to the upside, or we roll over here with a 50dma rejection and 3 lower highs.
(XLF) Financials - Looking like a rollover with the volume increasing today and a close below all kma’s.
(FDN) Internet - Tried to breakout for that MT channel DTL, but got rejected on volume to finally close below the 21dma. Could just need 1-2 days to consolidate below…or at risk of rollover.
(XBI) Biotech - XBI tried to reclaim the base area, but got rejected at the 10dma and finally even closed below the UTL. Now, this is a proper short setup that I will play with LABD tomorrow.
Alex’s TAKEAWAYS
I get so many mixed signals right now. The bond market, US$, lack of long setups (outside of energy) breadth, and risk assets (crypto) are all showing signs of a potential rollover and leg lower, while the VIX seems to say another story for the 3rd day straight. NQ is looking either like a very tight bull flag that we might resume on the upside, while we can also see the 3 rejections of the 21dma with a lower high being a good indication of downward pressure and possible rollover. I’m taking the later bet, but will be very quick to cover my short if we do break that flag DTL.
Gameplan:
As you’ll see, my Market-based exposure model changed quite a lot tonight as I am having a rough trading period for myself trying to position on the long side while the market is clearly in a downtrend and every breakout gets faded. I realized more than ever that I am a trend trader, and this last week's choppy market action is really hard for me to trade. So I will be less aggressive with my exposure below a declining 21dma & 50dma. I will want to see a clear trend change before getting engaged on the long side. I will probably add some exceptions in the next few days, such as an FTD or playing a major level bounce with TQQQ for example.
So for me right now, it’s short individual stocks OR short indices via SQQQ until we get above the 21dma.
LEADERS LIST
Overall leaders (PRIME Score)
WTI,PBF,DEN,PR,CVI,AEHR,MUR,DO,HLIT,YPF,VAL,WFRD,DINO,ERF,INSW,MTDR,NOG,MRO,FANG,PAYO,
Fundamental leaders (FA Score)
AMR,HCC,DK,MRO,ERF,DVAX,MGM,DRH,TELL,BHF,ENLC,SWAV,TRGP,WTI,HLIT,MPC,FANG,KOS,ARCH,PR,
Technical leaders (TA Score)
WTI,PBF,AEHR,NTNX,APDN,DO,CVI,DEN,PARR,MUR,PR,WFRD,PAYO,SLB,VAL,YPF,NOV,HLIT,MTDR,DINO,
Relative Strength 1 Month (1M-RS)
APDN,PBF,PARR,PUMP,CVI,PR,NEX,AEHR,PAYO,SLB,SVC,DO,NOV,OI,WTI,HCC,PSX,MUR,LBRT,CAR,
Relative Strength 3 Month (3M-RS)
APDN,YPF,WTI,WFRD,INSW,NTNX,PBF,TNK,DEN,AEHR,DO,MUR,RXDX,AZUL,CVI,PR,PARR,XMTR,RVNC,HLIT,
Relative Strength 6 Month (6M-RS)
APDN,YPF,WTI,INSW,WFRD,TNK,AEHR,PBF,NTNX,DEN,RXDX,CVI,DO,PARR,HLIT,MUR,PAYO,XMTR,STNG,RVNC,
PT PORTFOLIO UPDATE
I am working on a table that resumes my intraday closed positions as well to clearly show my intraday operations so that you folks can learn from it. Stay tuned, I’ll probably finish it up this wknd.
LONG FOCUSLIST 📈
LABD 🎖️
This one I consider being a SHORT trade, but being able to play it with a 3X lev. ETF is more convenient for me right now. So this is basically the XBI short trade I described higher.
Entry: recent breakout high pivot @ 26.40$
SHORT FOCUSLIST 📉🆕
PVH 46.48, VLD 3.55, PAGS 13.13, PLNT 58.2, MP 27.1,
PVH
40% leg down, followed by a pullback to the 21dma, and now sitting at the UTL that would confirm the setup.
UPDATE: We broke the UTL today, but the recent swing low pivot is still in play and would give another good entry.
Entry: recent swing low pivot @ 33.20$
VLD 🎖️
A name that was very strong recently, but just broke the base it has formed and retested that area along the 50dma this week. I see a retest & rejection (BORS) that would be confirmed with today’s low pivot as we did break that UTL.
UPDATE: This is a very bearish action to get a retest of the UTL like that just after breaking down from it. I would use the same entry pivot following that rejection which adds even more conviction to the setup.
Entry: recent swing low pivot @ 3.55$
PAGS
Lower probability setup IMO as we are just chopping around, but I think that ST UTL could come into play for a short entry from the kma’s squeeze.
UPDATE: We broke the UTL today, but the recent swing low pivot is still in play and would give another good entry.
Entry: recent swing low pivot @ 13.13$
PLNT 🎖️
I see a 25% leg down that led to a base break, and we were now wedging higher to retest that area and the 21dma in the last few weeks. We broke that UTL today on a final 21dma rejection and are now just above the recent swing low pivot for an entry.
Entry: recent swing low pivot @ 58.20$
MP
Already 52% from the highs and just sitting at the very important stage 3 base area. If we break that area lower, this could really be a juicy trade. I see the same 3 rejections at the 21dma like NQ and close in the area. I would use the recent swing low pivot for an entry.
Entry: recent swing low pivot @ 27.10$
INDICES trades (SQQQ/TQQQ)
That’s the kind of trade that is hard to plan & explain in advance. I share indices intraday setups & trades each day in the Discord channel if you’re interested to join. (7 days free trial, then 20$/m)
🎖️ = 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.
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REFERENCES
Articles on the system:
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Love the PT Datebase! Pls keep it a reasonable price 😊
Due to the fact that last week was really choppy and difficult to trade, my portfolio is down 1.5%. I was looking for implementing some rules to limit the overtrading on the long side. Your new market based exposure rules come right in time and I think they are more logical. Let’s see how they work. Great analysis, as always! It’s good to have a captain when navigating such difficult waters. Thank you for everything you do to helping traders!