Alex's daily Market update & Focuslist - 06/29
Another day of rotation with small-cap leading again.
Good evening guys,
Enjoy tonight’s letter!
Alex ✌️
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GENERAL MARKET ANALYSIS
NASDAQ (NQ_F) Daily
Price Action Analysis:
NQ retested both the 10dma and DTL today, and we closed in the upper range of the day but just below the breakout swing high pivot.
I would like to see that pivot being reclaimed tomorrow to confirm a continuation higher. But it’s looking good so far.
We are now 6.7% above the 50dma. We are still extended, but getting there as we digest the recent uptrend.
RUSSELL 2K (RTY_F) Daily
Price Action Analysis:
Big push by the small-caps, led by Energy, Financial, Industrials, etc. We are approaching the 1918$ base top level that we’ll have to watch closely for potential resistance.
S&P500 (ES_F) Daily
Price Action Analysis:
Nice action on the ES today, with a 10dma retest and reclaim of the breakout high pivot.
PT MARKET MODEL (PTMM) & INTERNALS
Price closed UP (+0.37%) and still above ALL KMA's.
Breadth was POSITIVE but decreasing. (+138)
U/D volume at 1.16 (decreasing)
MSCI UPTREND + BELOW 10dma.
MOMENTUM continues higher, except for the 10-day ratio that went back negative.
NNH at +17 (constructive to see it follow through)
Bottomline:
PT MODEL = GREEN market signal (🟩) on PULLBACK (🟥)
Today we saw the breadth & momentum losing strength as we closed around +100 and struggled all day. It was not enough to keep the ST-momentum positive, so the PTMM is back on a PULLBACK reading. We are very close to being on a full GREEN market signal, but we need to push more than that tomorrow.
Internals
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
Breakout in volatility above the DTL & 10dma.
There you go. We broke out of that multi-month Yields consolidation today. This is normally a headwind for growth & tech stocks, which we saw today. So let’s see if this will be a problem in the future.
No risk is being priced in.
BTC/USD (Bitcoin)
Building nicely in that flag above the 10dma. Looking for a continuation higher.
SECTORS ANALYSIS
Small caps & Growth stocks outperformed again today, and it’s good news for our style!
Rotation again today, as Financials, Materials, Energy, and Industrial took the lead.
Technology lagged again today.
Themes & Subsectors
Blockchain BLOK was the strongest theme again today and is now the top Monthly performer as well.
Then it was all about Oil, Energy, Metals, & banks. Not the sectors I usually trade. They printed bullish outside the week, so these themes might be worth watching for opportunities.
LEADERS (top10)
Leading sectors:
SMH Semiconductors: Inside day as we held the 10dma just below the DTL and 151.71$.
We either have an H&S pattern (bearish) or a 21dma PB & continuation that would be confirmed with a DTL & 151.71$ level breakout tomorrow.
IGV Software: We came to retest the 10dma and reclaimed the breakout high pivot. Seems like a digestion day.
ITB Home Builders: The sector did not follow through on yesterday’s reversal and closed strong & flat. I would look at the 85.05$ high pivot for a continuation confirmation.
We are ST extended.
XLY Consumer discretionary: Resting at the high base level and no red flag today. Seems like a digestion candle.
FOCUS & LEADERS LIST
TPR - TAPESTRY, INC. (WBPB) - Alert: 44.07, SL: 41.89
Tapestry, Inc. provides luxury accessories and branded lifestyle products in the United States, Japan, Greater China, and internationally. The company operates in three segments: Coach, Kate Spade, and Stuart Weitzman.
Leading sector (Consumer Discretionary XLY, but not leading THEME - Luxury LUX )
10/30wma aligned, squeezed & uptrend
It just bounced from 10+30wma, but still not extended.
72% prior uptrend
5 weeks base & consolidation following the weekly DTL breakout
Higher lows and surfing the kma’s before the potential breakout.
1.28 U/D ratio.
LTHM - LIVENT CORPORATION (BORS) - Alert: 27.29, SL: 25.69
Livent Corporation manufactures and sells performance lithium compounds primarily used in lithium-based batteries, specialty polymers, and chemical synthesis applications in North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific.
The company offers lithium compounds for use in applications that have specific performance requirements, including battery-grade lithium hydroxide for use in high-performance lithium-ion batteries; and butyllithium, which is used in the production of polymers and pharmaceutical products, as well as a range of specialty lithium compounds, including high purity lithium metal, which is used in non-rechargeable batteries and the production of lightweight materials for aerospace applications.
It also provides lithium phosphate, pharmaceutical-grade lithium carbonate, high-purity lithium chloride, specialty organics, and lithium carbonate and lithium chloride for use as feedstock in producing performance lithium compounds.
The company was incorporated in 2018 and is headquartered in Philadelphia, Pennsylvania.
Recent leading sector & theme (Basic Materials XLB + Metals & Mining XME + Lithium & Battery LIT)
Solid fundamentals & growth
We retested the recent base area last week and could make a bullish outside this week to confirm continuation.
10wma is trending up and above 30wma, but 30w is still down.
45% prior uptrend
In a GIANT base, for now, two years or so. LIT ETF also shows a multi-year consolidation and breakout potential to add conviction.
Higher lows before setup.
0.83 U/D ratio. (weak)
IOT - SAMSARA INC. (BO21PB) - Alert: 27.79, SL: 25.64
Samsara Inc. provides solutions that connect physical operations data to its Connected Operations Cloud in the United States and internationally.
The company's Connected Operations Cloud includes a Data Platform, which ingests, aggregates, and enriches data from its IoT devices and has embedded capabilities for AI, workflows and analytics, alerts, API connections, and data security and privacy; and applications for video-based safety, vehicle telematics, apps and driver workflows, equipment monitoring, and site visibility.
It serves customers across a range of industries, including transportation and logistics, construction, field services, utilities and energy, government, healthcare and education, manufacturing, wholesale and retail trade, and food and beverage.
The company was incorporated in 2015 and is based in San Francisco, California.
Leading sector (Technology XLK + Software PSJ + Transport IYT)
Solid fundamentals & growth + great reaction to last ER.
Potential TML characteristics.
10/30wma aligned and UP.
Still, a bit extended from the 10wma, but as a TML, a pullback to the 21dma is a good opportunity as we might not retest the 10w soon.
270% prior uptrend.
Two weeks consolidation only.
21dma undercut before the breakout
1.4 U/D ratio.
INDICES/SECTORS:
IHI - iShares:US Med Dev ETF (BREAKOUT) - Alert: 56.35, SL: 54.71
(TMO ABT MDT ISRG EW SYK BSX DXCM BDX IDXX)
Stage 1 base breakout.
LEADERS LIST
Overall leaders (PRIME Score)
SDGR,IMGN,MARA,RDFN,MDB,SMCI,VRT,NVTS,SOFI,XP,APP,EXAS,CELH,IOT,EXPI,ELF,NVDA,PLTR,ACLS,PANW,
Fundamental leaders (FA Score)
RCL,ELF,NCLH,CCL,CELH,TMDX,DT,WNC,HTGC,SDGR,WYNN,EXAS,FUTU,CRSP,ALGM,ARRY,CSIQ,ALB,MGM,PANW,
Technical leaders (TA Score)
IMGN,MARA,SDGR,RDFN,CCL,MDB,SMCI,XP,RCL,APP,VRT,EXPI,IOT,NVTS,NCLH,DKNG,RILY,SOFI,SGH,NVDA,
Relative Strength 1 Month (1M-RS)
MARA,CCL,COIN,PLAY,GTLS,NCLH,RDFN,SDGR,IMGN,JBLU,MDB,DAL,BBIO,RILY,AMKR,RCL,AAL,TEX,TWST,VRT,
Relative Strength 3 Month (3M-RS)
IMGN,SMCI,XP,SDGR,PLTR,MDB,CCL,VRT,RILY,APP,EXPI,TGTX,CELH,MARA,RCL,NCLH,GH,SGH,NVDA,FROG,
Relative Strength 6 Month (6M-RS)
IMGN,MARA,SMCI,RDFN,SDGR,RIOT,PLTR,NVDA,NVTS,APP,CCL,MDB,TGTX,XP,RCL,DKNG,IOT,META,VRT,EXPI,
Alex’s TAKEAWAYS & GAMEPLAN
The market continues to digest the recent move, and the 50dma is catching up slowly to NQ & ES price, while RTY and the small-cap are playing catch-up as expected.
Major indices, individual stocks, and sectors are looking good as that digestion continues.
We’ll have to track those bond yields closely, but other than that, I don’t see any red flags right now.
GAME PLAN:
Exposure model = GREEN market signal (🟩) on PULLBACK.
I am being aggressive right now as I see the action I want to see out of this first pullback after the recent general market breakout. That first pullback out of a bear market could be a huge opportunity.
If I see a red flag, I’ll quickly reduce exposure to protect my equity. If things work out tomorrow, I plan to add another 10-20% exposure.
Economic news/events:
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
PRIME MODEL SPREADSHEET (PT_database)
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REFERENCES
Articles on the system:
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