Good evening traders! 👋
What we’ll cover in the Newsletter tonight:
General market analysis ($NQ/$ES levels)
Market Breadth & Internals
Prime Model spreadsheet (PT_database)
Economic Calendar
Sectors Review
Leaders list
Alex’s Portfolio update
Focuslist including setups, alert levels & explanation
GENERAL MARKET ANALYSIS ($NQ/$ES levels)
NASDAQ ($NQ) Daily
Pretty crazy how the market can switch 180deg, especially after the very ugly close we had last Friday.
We opened the futures down Sunday night and came to retest the 10845/10942$ 2020 structure. We quickly bounced and found support at these levels to finally bounce pretty hard at the open this morning to finally close above a couple of very important recent levels/areas.
Reclaimed last week 11229$ swing low pivot
Reclaimed the entire 11068/11285$ support area
Closed above the 5dma on 3 major indices
We’ll have to see if we can get follow-through from that bounce and undercut & rally setup, but as usual, I’m following price action and will go where the market goes.
$NQ levels on the upside
11534$ level (June structure)
11689/11794$ resistance area
the 10dma
$NQ levels on the downside
11229$ previous swing low pivot
11285/11068$ area (June low level)
10845/10942$ area is the next potential support if we break below June’s low
10656$ (Sept. 2020 structure)
S&P500 ($ES) Daily
$ES levels on the upside
3735/3780$ area is now the most important resistance above
the 5dma
$ES levels on the downside
3639$ last week swing low pivot
3596$ level (2020 structure)
3509$ level (2020 structure)
MARKET BREADTH & INTERNALS
NYHL (New 52W Highs - Lows) - The market confirmed the divergence from last Friday. We continue to improve here @ -220 NNL. Going in the right direction, but still a lot of work to do.
NYAD (Net Adv/Decl) - We just had one of the strongest up thrusts of the year with 2189 advances.
20dma @ -415 (⬆️)
MMTH (Stocks > 200dma - LT breadth) - Reclaimed the 18.16 level and closed above both the 5 & 10dma. This is getting very interesting for a potential tradable rally.
MMFI (Stocks > 50dma - MT breadth) - We reclaimed the 5dma and also got back into the previous support area that is now turned resistance. I like the way we built very tight action just below the 12.03$ pivot and just breakout on power from that area.
MMTW (Stocks > 20dma - ST breadth) - ST breadth also with a pretty powerful breadth today. We reclaimed the 5&10dma and closed right above the 21dma as well. This is very interesting to see such a powerful thrust across all the breadth indicators I follow. There is a lot to prove still…
MCOSINYA (McClellan Oscillator) - Good improvement, now close to positive @ -57
VIX - A very positive day on the VIX as we tried to open above the 31.31$ level, but closed almost 5% down and back at a very important 30$ level. Tomorrow will be very important to see if we can follow through on the downside, which would be very positive for the market.
PCCE (PUT/CALL EQUITY RATIO) - 0.915
DXY (US $) - US$ bounce at the 10dma did not go far and we closed back below Friday’s low and the 5&10dma. This is a failed bounce and also a lower high. We are getting back to the recent UTL that we broke out before going parabolic, so we’ll have to see if we can continue down and confirm a possible top here.
US10Y (US 10Y bond yield) - Big breakdown for the 10Y yield & bond market in general, that certainly fueled a good part of today’s rally.
IEI/HYG (Credit Spread) - Credit Spread is still above all kma’s, so we’ll have to respect that uptrend action…but at the same time we can’t really sustain a move up.
BTC/USD (Bitcoin) - BTC with a nice bounce right in the support area and respecting the working UTL. We closed above the 21dma for the FIRST time in the last few weeks, that’s something.
PRIME Model spreadsheet (PT_database)
In the last few years, I've developed a model based largely on #CANSLIM fundamentals characteristics to focus on the best stocks. Not having the money to afford a #MarketSmith sub at the time, I built my own fundamental & technical scoring system into an Excel spreadsheet
PRIME Model explained
Starting from today, that's something that I will share daily here as added content to the paid part of the newsletter. So make sure to subscribe if you want to get that access on a daily basis!
Free access to my PT_database 👇
Use wisely, and enjoy!
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!
Economic Calendar
Sectors Review
Leaders list
Alex’s Portfolio update
Focuslist including setups, alert levels & explanation
If you’d love to read about 5 such posts every week, then subscribe below to join the PrimeTrading community!
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
Sectors Relative Strength - Weekly (RS vs SPY)
Top 3: XLE - XME - XBI
(XBI) Biotech - One of the most promising sectors out there for a potential rally IMO. We broke out of the channel DTL this morning on the gap up and even retested it at the open to close the gap. We are building nice tight action right in that support area. Reclaim of the 81.75$ pivot would get me engaged with LABU 0.00%↑.
(XLE) Energy - One of the strongest sectors recently just had a big day. Gap up above the 5&10dma to finally push above the 21dma. We closed just below the 50dma and recent base area which will certainly act as resistance. A couple of tight days before a breakout is possible IMO.
(XME) Metals & Mining - Strongest sectors today with a 44.15$ pivot breakout and close above the 21dma and right back in resistance base area.
(XLV) Health Care - What an expectation breaker...We gapped up and closed the day above Friday’s open above the 5&10dma. We were not able to close above the 123.90$ pivot, so we’ll have to see if we can breakout of that one tomorrow.
(IGV) Software - What an expectation breaker here as well...We gapped up and closed the day above Friday’s open above the 5dma. We closed right at stage 1 base bottom level, so let’s see if we can follow through.
(TAN) Solar - Also an expectation breaker as we’ve gapped up right above the recent 73.94$ swing low pivot. We closed above the 5dma, so we’ll have to see if we can follow through.
Alex’s TAKEAWAYS:
I like the undercut & rally action that we saw on the indices today along with some interesting tight action breakouts on some high-quality names around their 50dma. With the way the market was oversold, we could get a window of opportunity to play a tradable rally. We’ll have to take it day by day and not get too over-exposed as the recent weeks have shown us that we can roll over very fast.
It will probably be a mix of some day trades along some intermediate swing trades with trims along the way up. If it materializes…
We’re still below the 50/21/10dma, so the trend is still clearly down and we’ll have a LOT of overhead resistance if we continue to rally. Stay careful.
Always stay open, but do not anticipate!
LEADERS LIST
Overall leaders (PRIME Score)
YPF,INSW,AEHR,XMTR,WTI,TH,CCRN,RVNC,CPRX,VLD,WFRD,CEIX,DCPH,STEM,HLIT,AVDX,SG,RXDX,RXRX,LTHM,
Fundamental leaders (FA Score)
AMR,HCC,DK,MRO,ERF,DVAX,MGM,DRH,TELL,LBRT,BHF,ENLC,SWAV,TRGP,WTI,HLIT,MPC,FANG,KOS,ARCH,
Technical leaders (TA Score)
RVNC,YPF,INSW,XMTR,CCRN,AEHR,CPRX,WFRD,DCPH,TH,WTI,RXDX,VLD,MARA,STEM,AMRS,RXRX,WOLF,ENPH,CEIX,
Relative Strength 1 Month (1M-RS)
RVNC,AMRS,RXRX,RIOT,CCRN,AGL,TSP,YPF,BVN,SG,STNE,ZETA,NAT,PAAS,DCPH,AVDX,PYCR,DV,MARA,CPNG,
Relative Strength 3 Month (3M-RS)
VLD,TH,AEHR,RXDX,YPF,MARA,RVNC,STEM,CPRX,XMTR,WOLF,RIOT,AMRS,INSW,IEA,ARRY,PAYO,WFRD,ZETA,FUBO,
Relative Strength 6 Month (6M-RS)
TH,INSW,RXDX,AEHR,DCPH,CPRX,CEIX,STNG,RVNC,XMTR,ARRY,SWIR,YPF,STKL,VLD,WTI,GERN,CELH,SMCI,ARLP,
PT PORTFOLIO UPDATE
Position management GAMEPLAN:
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
XMTR 59.19, TH 13.03, WOLF 109.13, ENPH 294.8, LABU 7.68, DV 28.13, LTHM 31.53
A stock that I had but closed Monday on failed reclaim. I like that we found support at the recent base support area & 21dma. I would look at that 59.84$ pivot for a re-entry.
UPDATE: Triggered the entry and I took the trade, but we were not able to push and close above the entry pivot by EOD, so I closed it. The entry is still valid for tomorrow.
Entry: breakout high pivot @ 59.19$
A name that I tried to position a couple of times before the market sold off. I like the 200% move from the lows, and how we held the recent consolidation structure along the 50dma while the market was losing his S**. I am seeing a DTL breakout for a possible lower entry in the base.
UPDATE: Triggered the entry and I took the trade, but we were not able to push and close above the entry pivot by EOD, so I closed it. The entry is still valid for tomorrow. I like the volume coming in…
Entry: recent swing high pivot @ 13.03$
WOLF 0.00%↑ 🎖️
Recent leading stock with a +30% PEG that is now consolidating for a few weeks above the 50dma. I like how we made 3 higher low in the last days and pushing against the channel DTL. I would use Friday’s high as an entry pivot.
Entry: recent swing high pivot @ 109.13$
ENPH 0.00%↑ 🎖️
ENPH doesn’t need a presentation as we’ve been trading this name for a while. I still think that this is a potential leader and I like the recent tight action with higher lows at the 50dma. I would look for the DTL breakout along a reclaim of recent swing high above the 21dma for an entry.
Entry: recent swing high pivot @ 294.80$
LABU 0.00%↑ 🎖️
Biotech is the sector that I think is shaping best for a possible run from that multi-week channel back to retest the stage 1 base. I like how we have had a huge volume coming in that support area in the last few days. This is a sign of accumulation.
Entry: recent swing high pivot @ 7.68$
DV is consolidating for a few weeks now after a nice push following their last ER. We tried to breakout lately but have been pushed back down with the market to retest the 50dma. I like how we reclaimed that base area and built higher lows in a tight consolidation.
Entry: recent swing high pivot @ 28.13$
Almost 100% first leg up that led to a 50dma pullback in the last week or so. We built that led to a nice U&R setup today. I will be looking at the 31.53$ initial base breakout swing high & 21dma breakout as a potential entry.
Entry: breakout swing high pivot @ 31.53$
🎖️ = 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
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