Good evening folks!
Remember, trade your plan and manage your positions according to your system. We’re all a bit stressed every time the market is down recently because of this bear market playing out, but I want to base my decisions on facts, rules, clues and not opinion, fear or anything else.
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MARKET REVIEW
Today’s was another day of pullback action on the indices to remove the excess from last week. Overall, we are seeing two down days but that have been supported quite well intraday and at key levels.
What I’m seeing right now does not worry me yet. I still think we could see more upside based on tonight routine and the clues I’m seeing here and there. Don’t get me wrong, if the levels I watch and my bullish scenario don’t play out, I will switch on a dime and play defense…but right now that’s just not what I see.
We begin to see a nice little bullish channel forming that started Sunday on the futures market & the 50dma retest.
We also found support at KMA’S today. (10&21dma) which is exactly what we wanted to see hold along key pivots.
Last week, we had a market structure break with the 4094$ pivot breakout making a HIGHER HIGH for the first time since March high. Now, to keep this rally alive, we want to make a HIGHER LOW. Something to keep in mind.
Upside:
On the upside, the ideal scenario would be a retake of the 50dma &/OR 4205$ pivot. I am also watching closely this micro channel forming and a breakout of DTL would be highly bullish for me.
Downside:
If we break 4094$ pivot tomorrow and we can’t hold the 21&10dma, now I’ll be looking at a possible retest of 3891$ pivot which is 2.8% below.
MARKET BREADTH
NET new 1M & 52W high on the NYSE. Still healthy env.
McClellan came down below 200… which is good, we finally removed a lot of excess and are now below overbought levels.
Stocks > 50dma is not giving back much in this PB. Noticed how we stay above the 50dma and just wait for the faster MA to catch up. This is a good sign that we don’t sell-off here. Again, we are removing the excess from last week.
VIX was not able to reclaimed his wedge and failed at kma’s. Yet another divergence on the VIX today. Look how we tried to reclaim the wedge only to be slammed back down. This is good, yep, a good clue that market might have more upside than downside tomorrow.
ECONOMIC CALENDAR
SECTORS PERFORMANCE
Crude Oil (CL_F) Not looking good for Oil… second failed breakout with a lower high. That’s the kiss of death. We are selling off on the futures here, so tomorrow could be a hard day for Oil stocks, be careful. We have Oil inventory news tomorrow @ 11:00 that can important the commodity, be careful.
NG_F (Natural Gas) reversal at the 21dma which is leading to a possible 2nd breakout attempt. Will be important action tomorrow for Nat Gas names especially.
PORTFOLIO UPDATE
Other than HDSN that failed his breakout hard, all my other positions had not any real damages and my P&L was pretty flat today. CELH, LNTH held key levels are are simply PB on low volume waiting for kma’s to catch up. For me, this is another clue that market might resume ST
New positions:
None
Trimmed positions:
None
Closed positions:
HDSN (Classic failed breakout. Got stopped out @ 9.47 for a 1.76% loss)
DAILY FOCUSLIST
5 names in my FocusList tonight.
Not a lot of quality setup again tonight. I see less damages in strong stocks than yesterday, but still those had their good R/R entries already. You’ll see 2 of my positions giving a potential new entries from BORS setups which I might use to increase my position on a particular one.
Tonight’s names are in these sectors:
Transportation
Drinks
Medical devices
SOLAR
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.
Today continued the PB on lower volume than yesterday and still within key levels. I’ll try to play the more aggressive DTL out of mini channel if market’s good tomorrow.
FLNG - Large WB right above LT base breakout level. Notice also the higher lows in the 2 recent swings low. We broke out of the DTL today, but I’ll use 28.34$ for confirmation.
GNK - Still acting very constructively at the breakout level and PEG high. We closed above last night alert, but I didn’t want to open any exposure today due to market weakness. So today’s high 26.0$ would be a good pivot to confirm the BORS setup.
CELH - Very similar than ENPH setup, we are retesting breakout level on lower volume than yesterday. I’ll be looking at the DTL breakout for a more aggressive entry tomorrow, or recent swing high @ 71.29$ for a more conservative entry.
LNTH - Another one of my position that sets up for another entry as a BORS setup. We tested the 10dma this morning before finding very good support and close green, which is showing amazing RS. Friday’s high @ 71.24$ will be a good pivot to use for confirmation & entry.
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:
CVI,NINE,EQT,AR,SD,BORR,CRK,GDYN,KOS,SWN,CVE,SQM,PBF,LPG,CIVI,ESTE,CC,OXY,MRO,EGY,
Relative Strength 1 Month - TOP 20:
BKSY,LPI,BORR,WTI,ESTE,PLAB,SM,SWN,CIVI,CPE,SD,MTDR,EGY,WLL,KOS,CVI,EQT,CPG,AR,NOG,
REFERENCES
Articles on my system:
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