Good evening folks!
Hope you had a good last day of the month! Could have been a better month for me, but today decided otherwise loll. I’m looking forward and ready to crush it in June :)
MARKET REVIEW
Today’s action pretty much played out exactly how I saw it last night. We pulled back and retested 4104$ level and close around 4140$ level. Overall, this market could have flushed like the last 3 times we found support at kma’s, but we did not and instead buyers showed up multiple times during the day to support this market.
For me, right now, there is nothing to worry about as I explained last night. We just had an 8% move in 4 days, breadth was overbought, we were seeing less & less quality setups, so it’s just normal that we pullback like that today.
Upside:
On the upside, the ideal scenario would be a retake of the 50dma &/OR 4205$ pivot.
Downside:
We still want to see 4104$ level hold tomorrow and ideally close above 4140$ would be a big positive.
MARKET BREADTH
NET new 1M & 52W high on both the NYSE and NDX (ok it’s split on NDX you will say, but that’s in the good direction ;))
McClellan came down a bit at 260… but that’s still overbought over 250. We might need another quick pullback tomorrow to bring it down in the 100’s.
VIX was not able to reclaimed his wedge and failed at kma’s. Look at what VIX did last 2 times we found resistance at the SPX 21dma. So the fact that we were not able to close more than 1% higher is VERY POSITIVE.
ECONOMIC CALENDAR
SECTORS PERFORMANCE
Well, mild down day across the board. What is catching my eye…yep Solar is showing Relative Strength AGAIN. This sector could be the next market cycle winner.
Crude Oil (CL_F) failed his 116.5$ breakout today and was confirmed by many individual names having reversal day. This is concerning, and for me it’s a wait & see situation in this sector. Considering many names were already extended, you really want to see what will happen here.
NG_F (Natural Gas) also had a rough day being down 6%. We failed the breakout reclaim and came down right at the 21dma & previous breakout level. natgas held surprisingly well, so I think see this could find support pretty quickly like we saw in early May. I still reduced my exposure to this sector, just to play it safe.
PORTFOLIO UPDATE
Rough day, but traded it according to me plan.
Still a bit over my ideal market exposure, but the cushion is there on my open positions. SL are in place, so I’m letting the trades work and see if this rally can have some more leg.
Tried GNK through 25.64$ pivot but failed so got out at my SL @ LOD.
New positions:
HDSN (Took this one on the 10dma retest & recent DTL. I was aggressive on the entry, but SL was less than 1% below so very good RR and limited risk. HDSN was holding despite the market being down more than 1% this morning and when market reversed at 4104$ level, I tried this entry which worked right away.) Then it just never gave back his gains until close.
Trimmed positions:
Should have trimmed CELH & TELL Friday. Well always space to improve right! :)
Closed positions:
TELL (Wanted to reduce my Natgas exposure because of the commodity sell-off today. So cut my TELL position which I had not a lot of cushion, and kept $EQT & $SWN runners)
DAILY FOCUSLIST
4 names in my FocusList tonight.
I am seeing less good R/R setups again tonight, but a lot of reversals in recent performers. Remember to use progressive exposure to finance the risk of your next position. One step at a time, don’t load the boat. Managing Risk is your JOB #1
Tonight’s names are in these sectors:
Transportation
Chemicals
Steel
SOLAR (finally a setup in a potential market leading sector!)
GNK - Failed breakout today, but was able to hold key levels (5dma & 24.93$ level. I am still interested in the 25.64$ pivot for a BORS confirmation and potential trend resumption.
DOW - I’m seeing the WB & BORL setup here in this chemical name. Some could say it’s a beautiful cup n’handle. It’s still a riskier trade tbh, as I don’t really like the large swing within this consolidation…but this reminds me MOS & CF (Those 2 showed RS today, keep note) back in March power rally. Everyone were scared of this wide swings within their wedge, but still rallied really hard. Just keep in mind that probability might be lower in this one. (STILL VALID SETUP EVEN AFTER TOMORROW. DID NOT BREAK BELOW BREAKOUT LEVEL)
ATI - We just had a nice WB last Thursday and we are not consolidating a bit right below recent swing high. This 27.88$ level will be my pivot to confirm the WB and continuation.
ENPH - You know by now that I’m looking a lot into Solar sector for almost 2 weeks now as they showed incredible RS off the market bottom and even before. ENPH is the clear leader in this sector for me, and I finally have a level to play against with the early May swing high (192.9$) and also today’s breakout retest, which I consider a pretty clean BORS setup. So, alert set at 192.9$ for me.
I also see a larger stage 1 base breakout along a recent WB last week. THere’s a confluence of positives here.
RELATIVE STRENGTH
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:
HDSN,NINE,SQM,SWN,CVE,MRO,PBF,WTI,OXY,ESTE,CIVI,CPG,NOG,SM,LTHM,PTEN,LNTH,GDYN,VTNR,MTDR,
Ho, surprised, look who’s at the top ;)
Relative Strength 1 Month - TOP 20:
BKSY,YMM,AFRM,PLAB,DLO,LTHM,SM,AMRS,BZ,RUN,LPI,SQM,CD,WTI,DOCN,VNET,ESTE,MTDR,CELH,NOG,
REFERENCES
Articles on my system:
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