Alex's daily Market update & Focuslist - 03/19
This will be a major week, with the interest rate decision & FOMC meeting on Wednesday, along probably a lot of global Macro news along the way.
GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Price Action Analysis:
ES_F was not able to follow through on Thursday’s bounce and was rejected at the current correction channel DTL and the 21dma.
We’re still in a downtrend for the last 2 months or so and we didn’t get a confirmation that it changed based on price action yet.
Despite the fact that we’re back below the 21dma, we’re still in that bear flag and did not break the UTL to the downside. As futures open higher on many Banking, Central banks, FED/Tresury news about a liquidity injection in the coming weeks, we gapped up back above the 5/10dma and above the 3964$ level.
This will be a major week, with the interest rate decision & FOMC meeting on Wednesday, along probably a lot of global Macro news along the way. We can expect high volatility and it will be hard to forecast which side the market will take in this type of market.
It’s best to define our bullish/bearish scenario and follow the price action. The market will tell us which side we’ll go.
On the upside (bullish scenario),
First, I want to see a reclaim of the 21dma, and then a breakout of the correction channel DTL, along a push above 4016$ would really be bullish.
On the downside (bearish scenario),
If we break that current bear flag UTL, along breaking down from the 3898$ level, we would have good chances to follow-through down on a meaningful move.
NASDAQ (NQ_F) Daily
RUSSELL 2K (RTY_F) Daily
Alex’s TAKEAWAYS
The market was not able to follow through on Friday and we now have to respect the fact that we are still below the 21dma and important resistance area.
We also had OPEX on Friday, so this could have impacted the price action going into it, and we are still living this banking crisis with major developments on a daily basis. We still remain in a ST-downtrend, with a weak breadth (ST & IT trend now flipped both downtrend) and some red flags in the internals (VIX, Credit Spreads, Yields, Crude Oil, etc.).
So despite seeing constructive action in the technology sector, and seeing clean accumulation & bases in these individual names, it still remains in a very narrow area of the market. For that reason, I remain very cautious putting exposure despite seeing these sectors showing great setups and trades.
We did have some news from the FED tonight about providing liquidity to the market via the standing US dollar liquidity swap lines, and it seemed to have help with this gap-up and small initial rally on the futures open. We’ll have to see how this news and liquidity injection operation affects the market going forward.
One step at a time!
Market health & Trend indicators:
IT_SIGNAL: downtrend (red) + BELOW 50dma = INTERMEDIATE-TERM DOWNTREND (🟥)
ST_SIGNAL: downtrend (red) + BELOW 10dma = SHORT-TERM DOWNTREND (🟥)
Tomorrow's economic news/events:
GAME PLAN:
Tomorrow, it will all depend if we confirm my bullish scenario or not (DTL+21dma+4016$ reclaim). If we do, then I might add 5-10% exposure maximum if my current position gain traction and allows me that new exposure.
If we don’t then I will only manage my current GLBE position and stay put until we gain more clarifity on this market. We remain in a heavy choppy market along having the FED/FOMC event on Wednesday.
This market is still news-driven, so we must build exposure cautiously.
FOCUSLIST (LONG)
MPWR 506.16, ON 80.85, MELI 1223, OKTA 85.43, IOT 19.82, INDI 10.73, GFS 67.27, ABNB 121.4,
MPWR (BORL) - Alert: 506.16, SL: 471.31 / LOD
A semiconductor name that showed a lot of RS in early Feb before consolidating very well around the 21dma and above the earnings gap. I like how we made three higher lows before reclaiming all kma’s. I would look at my prior entry pivot at 506.16$ for an entry.
Update: Still holding the 21dma and a small reversal on Friday. Still within striking distance if the market rally.
ON (BORL) - Alert: 80.85, SL: 77 / LOD
A semiconductor name (you have many choices ;)) that held the multi-month base area on this current pullback and bounced back above all kma’s today. I am watching the DTL as an early entry or the recent swing high pivot.
Update: Still above base area and UTL.
MELI (BREAKOUT) - Alert: 1223, SL: 1180 / LOD
A recent leading stock is setting up for a classic base breakout. Solid fundamentals and RS in the last few weeks.
Update: Still above all kma’s and held closed flat on Friday, nice relative strength.
OKTA (BORL) - Alert: 85.43, SL: 82.98 / LOD
Retest the base area and PEG high. I will look at the DTL for an anticipation entry or the 86.24$ pivot.
Update: Still above all kma’s showing high RS on Friday.
IOT (BO21PB) - Alert: 19.82, SL: 18.54 / LOD
Recent earnings winner working on a 10/21dma pullback on low volume. I like how we build above the PEG low pivot and above the 21dma.
Update: Lost the 5/10dma on Friday, but still inside day just below the entry pivot.
INDI (BO21PB) - Alert: 10.73, SL: 10.13 / LOD
Another semis name that showed impressive action following the last earnings. We pulled back to the 21dma on a higher low and are now above all kma’s. I will watch the DTL for an early entry, or the 10.7$ pivot for more confirmation.
Update: Still inside day with a 21dma touch on Friday.
GFS (WB) - Alert: 67.27, SL: 64.12 / LOD
Another semiconductor name that is working on a larger wedge and still trading in a very tight range for the last couple weeks. I like how we tried to break that DTL and pivot on Friday but closed almost unchanged. Big RS.
ABNB (BO50PB) - Alert: 121.4, SL: 116.55 / LOD
We are working on a 2 leg down PB to the 50dma along the pre-PEG base area. I’ll be looking at the DTL breakout for an anticipation entry, or the base area level for more confirmation.
INDICES TRADES (SPXL/SPXS)
No trades are planned.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
SECTORS PERFORMANCE
Leading sectors:
SMH Semiconductors
We were not able to follow through and got rejected at recent highs structure. Despite that rejection, it still held very well and we remain above all kma’s. Still the leading sector.
XLF Financial
3117$ level undercut on Friday. Let’s see how all those weekend news will affect the sector this week.
TAN Solar
We broke down from the 71.75$ support area and closed just below the 69.68$ level on higher than avrg volume. Not good.
XBI Biotech
Was rejected at the 78.09$ level and 5dma Friday, but still above recent low, so let’s see if we can create a higher low or not.
XLE Energy
We are still holding the support area.
XME Metals & Mining
48.75$ level held on Friday, let’s see if we can bounce or we break down.
XRT Retail
Rejected at the 5dma, but still above the recent lows.
IGV Software
Was not able to follow-through from the DTL breakout, but we held very well on the DTL retest and still above all kma’s.
MARKET BREADTH & INTERNALS
$NYHL (Cumulative new 52W Highs/Lows & 50dma)
We crossed below the 50dma, and switch to an IT-DOWNTREND signal. We’ll have to see how we react to this week’s action with FOMC & FED, but this is another sign to remain careful as the breadth remains very weak.
IT_SIGNAL: downtrend (red) + BELOW 50dma = INTERMEDIATE-TERM DOWNTREND (🟥)
$NYSI (McClellan summation index & 10dma)
ST_SIGNAL: downtrend (red) + BELOW 10dma = SHORT-TERM DOWNTREND (🟥)
$NYMO (McClellan Oscillator - Breadth extensions)
Rejection, but still building HH & HL.
Small NNL increase Friday.
NYAD (NYSE Net Advances/Declines)
Another good -2000 negative thrust on Friday. We really swing back & forth in the last few days. CHOPPY MARKET.
NYUD (NYSE Advances/Declines volume)
That’s a new one I want to keep an eye on. I already track the Advances/Declines volume ratio in the Market Snapshot, but I like to see it as a cumulative chart to spot the bigger trend. We’ve seen that in the last month, especially starting with this bank crisis, we’ve seen selling volume far outpacing the advancing volume. Not implying anything, but we need to see this kind of quick flush in volume for a market bottom to take place. Let’s track it in the next weeks to see how we act.
$NYA200R (Stocks > 200dma - LT breadth)
New low.
$NYA50R (Stocks > 50dma - MT breadth)
HL so far.
$NYA20R (Stocks > 20dma - ST breadth)
We now have a HH & still a HL = uptrend.
VIX bounced from the support area and 10dma Friday as we reclaimed the 25$ level and now back above all kma’s. Last week was OPEX, so we’ll need to see how we react this week with FOMC/FED.
Back below the 5/10/21 dma and approaching the 103.58 level.
We gapped up Friday, and reclaimed the base area and now back above all kma’s. This need to cool down if we want to see upside in this market.
Still holding the 3.40/3.50% base area.
ECONOMIC & EARNINGS CALENDAR
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
LEADERS LIST
Overall leaders (PRIME Score)
ALGM,IOT,LSCC,FOUR,MELI,INDI,FSLY,OKTA,FLYW,RBLX,ELF,ASAN,COIN,ONON,PANW,AEHR,CARG,PATH,MPWR,DKNG,
Fundamental leaders (FA Score)
FRO,EURN,ALB,INSW,CALM,ASC,ELF,DHT,CPRX,MUR,H,PANW,HIMS,ALGM,LTHM,FTAI,AEHR,ARRY,AGNC,STNG,
Technical leaders (TA Score)
IOT,ALGM,RBLX,COIN,CRM,LSCC,ASAN,FSLY,FOUR,MELI,INDI,OKTA,BBIO,MBLY,FLYW,PARR,ONON,PATH,HIMS,BLDR,
Relative Strength 1 Month (1M-RS)
ASAN,FOUR,IOT,OKTA,SRPT,CRM,RBLX,CRWD,FLYW,MELI,MBLY,DOCN,BLDR,LSCC,CUBE,PBF,ALGM,PARR,INDI,ENPH,
Relative Strength 3 Month (3M-RS)
COIN,FSLY,RBLX,BBIO,INDI,ASAN,IOT,DKNG,ALGM,LNTH,HIMS,CRM,GLBE,AEHR,APP,FTAI,ABNB,ELF,PATH,MPWR,
Relative Strength 6 Month (6M-RS)
AEHR,ALGM,RXDX,ELF,FSLY,OII,HIMS,LSCC,NINE,SMCI,IOT,AIMC,PARR,FTAI,PRTA,MBLY,ACLX,OKTA,FOUR,PBF,
REFERENCES
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