Alex's daily Market Update & Focuslist - 05/26 🖊️
Disclaimer: This newsletter is not financial or investing advice. The information is for education purposes only and reflects only my own operation.
Another very positive day, with yet another higher low & higher high!
Following FOMC at 14:00, market tried to breakout of 3981$ pivot and close above 10dma but got spooked by eanrings a.m.o. Notice how we came to kiss to tick the channel DTL. It’s now a make or break at this point, tomorrow will be PIVOTAL.
Upside:
To really confirm that CT rally, I want to see price breakout and close above the channel DTL, 10dma AND the 3981$.
21dma is around 2% above here, so it’s a potential target within reach for tomorrow.
Tomorrow will be day 5 of attempted rally. Today was on lower volume than yesterday so, we'll be on the lookout for a FTD again tomorrow.
What Is A Follow-Through Day? | Investor's Business Daily (investors.com)
Downside:
On the downside, I would like to see IDEALLY this UTL formed by lows since bottom hold. If we can’t, then look for potential support 3900$ on a possible retest making a higher low.
We still are below 21dma, so despite very positive action in the last few days, we want to still stay careful. I want to build my exposure very progressively on current profits. I don’t want to risk any capital. We have still A LOT OF POTENTIAL RESISTANCE ABOVE.
NET new 1M high on the NYSE, but net 52w lows on both NYSE & NASDAQ. We’re trying…!
Stocks > 50dma have b/o from their channel DTL today making and confirming a higher low right at MAJOR RESISTANCE LEVEL. Such a breakout on this breadth indicator very often lead to rally, like we had in march. What I like even more is the shakeout below this area. This could really fuel something powerful in the next days/weeks if the rally confirms.
VIX rejected yet AGAIN 30$…for the 5th consecutive day!! WHICH IS SUPER POSITIVE. 5 attempt higher and rejection which formed big wicks. Simply unable to rally and being smashed each day. That’s what you want to see on a market reversal. Clues ARE STACKING UP…tomorrow will be pivotal.
P/C ratio still not spiking, so no real fear in this market yet.
McClellan ratio increasing @ 160.
Wow, big day for retail! That might be a clue of a change of character in the market perception regarding inflation and a possible recession. Retail tend to be good in a good economy, not in recession. We’ll have to see if this trend confirms.
Solar & C Energy with still another good day, building bases. Now pushing against 50dma, could be a big day tomorrow.
Also still looking at Crude Oil (CL_F) for a potential breakout. Price action is super constructive which yet another very tight day and pushing again against 111.37$ pivot. Volume is getting really low in the congestion area, we’ll make or break pretty soon.
I also look at NG_F (Natural Gas) as my current positions are in this sectors and the commodity strength is driving individual stocks. We finally b/o today, but a couple red flags for me here. The breakout was on low volume and also almost squatted the entire move within the day… 2021 breakout style. We’ll see tomorrow if we can hold 8.91$.
Today was a very good day. My 2 positions really performed well and after a 3 day push, they began to be a bit extended. Also, SWN & EQT being highly correlated to NG_F, I decided to take my first profits into strength today and use the 10dma & 21dma for my last part as per my rules.
See this article to know more about it: Education Article - Entries & Position management
New positions:
CELH (Trying this one for the first time as it is still setting up very well out of his wedge. Don’t be shy to try a stock multiple times with a small loss. My biggest winners I had to try a couple times before getting it right. Part of the game)
SPXL (Want to add SPX exposure as I want to play the channel & 3981$ pivot breakout from this point)
Trimmed positions:
Closed 2nd EQT pos @ 47.04$ (+6.65%)
Closed 1st EQT pos @ 47.52$ (+14%)
Closed 50% SWN pos @ 8.21$ (+15%)
Now trailing 10dma for next 1/4 & 21dma for last 1/4.
Closed positions:
7 names in my FocusList tonight.
Tonight, I see A LOT stocks that had very good breakout today. We’ll have to see tomorrow if they follow through or not, to confirm a potential rally. Otherwise, there is still quality setup tonight in the same sectors.
Nat Gas, Oil, Chemicals, Coal and Transportation
Even if we get an amazing day tomorrow, remember to use progressive exposure during the day to finance the risk of your next position. One step at a time, don’t load the boat, there will be PLENTY of occasion to jump in stocks if this rally materializes. Remember how the last 2-3 times we rallied, market punished hard right on the next day.
TELL - Still here for the 3 night in a row. Notice how each day we are still within last Friday price range. I think Matt Caruso calls this a Mini Coil. Anyway, we begin to be squeezed and the spring will explode one way or the other. I’m still interested in this name with the larger BORL setup, which we would confirm with the DTL OR 4.69$ pivot b/o
AMR - Coal stocks had a rough day, but they managed to keep their support levels and created yet another and clearer BORS setup here. 170.91$ pivot is the confirmation pivot.
NTR - Still working his right side with another very tight day into the support area and above UTL. I’m still looking at 102.20$ pivot for a confirmation, as I would not want to initiate a position right into the support area.
REI - An Oil stock that has not breakout yet and at a very interesting spot right here. BORL setup on the retest of the recent breakout level. We closed right at the DTL tonight and I would use the most recent swing high, 4.35$ pivot, for an entry.
GNK - We had a powerful gap up right into the base top level. It’s normal that we have some kind of consolidation at these levels. Today was a nice BORS setup at the 24.93$ level. I would use breakout candle high as my entry @ 25.64$.
INSW - Another transportation name that made a BORS setup today. Retest of 23.96$ pivot and I would use today’s high as my confirmation for an entry.
CC - After a failed breakout of 41.72$ level, we wedge higher and got a double retest of the 10dma which held very well. We are now right below DTL & looking like it want to b/o again. I’ll use the 41.72$ pivot again to confirm the BO10PB setup here.
I’ll start tracking top fundamental stocks with highest 6 months Relative Strength, holding up the best short term. (40% 1M-RS + 60% 6M-RS ratio).
During market correction, you want to keep track of these names as they will be the one to watch when conditions improves.
Relative Strength 40/60 - TOP 20:
VTNR,AR,CVI,SD,EQT,CRK,PTEN,KOS,TALO,GOGL,CVE,WTI,HDSN,OXY,DK,ESTE,CTRA,SWN,CPG,VAL
Relative Strength 1 Month - TOP 20:
VTNR,RELY,DLO,DVAX,CVET,AFRM,SQM,SD,NOVA,PRPL,FRO,ESTE,WTI,AR,CPG,AVDX,PAYO,LTHM,CVI,ZIM
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