Alex's daily Market update & Focuslist - 01/24
Major indices struggle to make new highs, as the broad market breadth breaks down once again. Caution.
Good evening!
Today, I got concerned by the negative breadth divergence (MCSI hooked back down, made LH LL and RTY strong rejection of the 2004$ I was using as a guide). Plus, My positions got rejected hard at key levels & TL, making a potential pullback possible.
With January's current window of opportunity overall on contracting breadth, I don't particularly appreciate seeing the leaders putting these significant reversals or spinning tops while the broad breadth is cracking down. Usually, how a pullback starts.
I might overreact, but as a swing trader, I think the R R and upside potential are not here for me right now. So I prefer cashing out on that great YTD start and waiting for another high probability oversold buying opportunity.
Overall, both bounce attempts from oversold conditions are not convincing, and selling quickly returns after each attempt. I think caution is needed here with that negative divergence and breadth that keeps contracting despite bounce attempts.
Alex ✌️
Tonight’s daily report content
PrimeTrading Market Model #PTMM + Takeaways
General Market Analysis: NASDAQ - S&P 500 - RUSSEL 2K - OTHERS, including my daily levels & my bullish and bearish scenarios
Market Internals
Sectors & Themes Analysis
Daily Focuslist including setups, alert levels & explanation (long & short)
Leaders list + Scans (technicals, fundamentals & potential TMLs)
My Portfolio Update
Economic Calendar
PrimeTrading Market Model #PTMM + Takeaways
Key Takeaways:
Selling back in the broad market, with GDB at -330
Price was not able to make a new high, as we've been rejected and made reversal with a lower high again. Still above the 21dma
MCSI hooked back down and was never able to really turn around, which is a big concern for me. Breadth still contracting since the start of the year.
5-day flat
10-day ratio back to downtrend and < 1.
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GENERAL MARKET ANALYSIS
S&P500 (ES_F)
Well, the strong uptrend stopped today, as we failed to make a new high and reversed at the recent swing pivot.
We’ll still need to see tomorrow if we follow through, but this is a potential caution sign if we follow through from here.
We remain above all kma’s, so the trend remains firmly up despite that structure price action caution flag.
NASDAQ (NQ_F)
Same sharp reversal & failed new high on NQ as well.
RUSSELL 2K (RTY_F)
The most concerning indices action for me today is RTY. As we discussed last night, the 2004$ was a big focus for me today, and as feared, we failed to reclaim it and instead rejected it with strength. We also undercut yesterday’s low pivot, which confirms the rejection of that key level.
Let’s see how we react to KMA’s retest, but the breadth following through is lower (MCSI); I am concerned about that rejection being a potential lower high.
Market Internals
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