Alex's daily Market update & Focuslist report - 10/31
GDB closed at +292... as we followed through on yesterday’s reversal - Now place to Jerome Powell & FOMC tomorrow!
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GENERAL MARKET ANALYSIS
S&P500 (ES_F)
ES followed through on yesterday’s reversal, and we closed strong, just above the 4211$ level.
That’s a good first step, but tomorrow, this price action means little, with always volatile & impactful FOMC. (14:00 & 14:30)
We are still below all kma’s and continue to sell off on heavy distribution, so defense is fundamental right here & now. We never know how fast & hard we can continue lower…even if the market is oversold & extended.
I’ll watch these levels as potential resistance for retest & rejection. If we reclaim those, it would be seen as constructive.
10dma
4235$ (Oct. low)
4264$
21dma
4308$
4337$
I’ll watch these levels as potential support if we follow through lower (or retest & go):
4211$
4161$
4076$ (The same area as the measured move from Aug. top.)
4030$
NASDAQ (NQ_F)
RUSSELL 2K (RTY_F)
PrimeTrading Market Model #PTMM
GDB closed at +292... as we followed through on yesterday’s reversal.
Price follow-through (+1.00%)
NNL improved, and PTHL decelerated
daily momentum improving (2.12 vs 1.13 yesterday)
MCSI hook! But still below 10dma (flipped uptrend)
We continue in the right direction, as we followed through on yesterday’s bounce attempt. Breadth is improving slowly, but at least improving.
We must keep in mind that we must consider that bounce attempt a COUNTER-TREND rally first, which means that any levels & kma’s we retest are potential resistance.
That's how the buyers will SUPPORT the market on pullbacks that will tell us A LOT more in the following days/weeks if we continue higher. That's where they can't hide their actions & intentions.
The big clue will come on the first rejection. Do we make a higher low, and if yes, can we confirm the buyer’s support with a breadth thrust on that reversal day? (GDB >+400) That’s what I want to see to get back long!
No need to play hero in this type of high-velocity downtrend. Trying to pick a bottom is a sure way to get killed...confirmation is worth a lot of $$$.
PTMM is still at a RED market signal (🟥)
Action/Rules:
SHORT trades allowed
1/2 positions only (10%)
Trimming 1/3 at 1R & 2R
Keeping 1/3 as a runner position
New open risk > 0% (meaning all new exposure is financed and paid for with trims)
Internals
MMTW (Stocks > 20dma - market extension)
We broke out of the recent highs DTL from that Aug./Sept structure level. This is constructive action and I will want to see that move continue tomorrow following FOMC.
MMFI (Stocks > 50dma - market extension)
Now, that is very constructive and positive here. We followed through on that higher low support area and broke above recent highs DTL. If we can follow through again on FOMC tomorrow, I will like this breadth reversal from oversold levels a lot for a tradable rally.
A scenario like in June & Oct. 2022 is possible here, where we make a slightly higher low. I’m watching that potential scenario closely.
Broke down from channel structure and closed below 18.88$. We’re going in the right direction.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
Broke down from recent tight wedge. CONSTRUCTIVE.
10Y Bond Yields (daily)
Still wedging above all kma’s.
US dollar index (DXY)
It was a hard reversal today, and now sitting just below base level. That’s a red flag for sure.
We broke down from the recent structure DTL, and almost the 21dma as well. For me, today’s action on CS is very constructive.
BTC/USD (Bitcoin)
Still holding that breakout, this is constructive while kma’s are catching up and we digest the recent move.
SECTORS & THEMES ANALYSIS
URA & NLR 🔥
Medical equipment & devices strong
Cybersecurity to watch
Defense great support
Cloud comp stands out, too
It's a big day for ARKK
Large/Mega lagging
LEADERS (TOP10 - Overall/Weekly/Monthly/52w low/52w high)
10 leading themes charts (w/ pivots):
1 Uranium URA
2 Nuclear NLR
3 Software IGV
4 Property & Casualty Insurance KBWP
5 Semiconductors SMH
6 Blockchain Technology BLOK
7 Internet PNQI
8 Oil & Gas Exploration & Production PXE
9 Artificial Intelligence & Technology AIQ
10 Social Media SOCL
FOCUSLIST
LONG FOCUSLIST
ANF daily/130m - ABERCROMBIE & FITCH CO. - Alert: 61.39, SL: 58.545
CRWD daily/130m - CROWDSTRIKE HOLDINGS, INC. - Alert: 178.45, SL: 172.58
AEO daily/130m - AMERICAN EAGLE OUTFITTERS, INC. - Alert: 17.64, SL: 17.26
DELL daily/130m - DELL TECHNOLOGIES INC. - Alert: 67.04, SL: 65.73
SHORT FOCUSLIST (simplified)
MDB daily/130m - MONGODB, INC.
ASAN daily/130m - ASANA, INC.
GES daily/130m - GUESS ?, INC.
OZK daily/130m - Bank Ozk
LVS daily/130m - LAS VEGAS SANDS CORP.
RCL daily/130m - ROYAL CARIBBEAN CRUISES LTD.
LEADERS LIST
Overall leaders (PRIME Score)
VST,ANF,PDD,VRT,DELL,RELY,X,FTAI,XPO,NU,TDS,CRWD,AEO,COUR,SFM,APP,NRG,HRB,OLLI,ESTC,
Fundamental leaders (FA Score)
NVDA,INDI,NU,TMDX,META,SDRL,LVS,RBA,PODD,DLO,DUOL,NCLH,CCL,PANW,MLCO,TDW,DLR,FSLR,EXTR,EURN,
Technical leaders (TA Score)
FRO,ANF,VRT,X,ESTE,TDS,RELY,FTI,PDD,PR,DELL,LBRT,CEIX,AEO,VST,LPG,FTAI,APP,INSW,XPO,
Relative Strength 1 Month (1M-RS)
BTTR,SPR,MSTR,NEP,APLS,EGO,NFLX,PI,FRO,KSS,CUBI,DG,AR,FYBR,PLNT,RBLX,PPC,LPG,LVS,NRG,
Relative Strength 3 Month (3M-RS)
TDS,APLS,ANF,VRT,CPRI,CEIX,FRO,RELY,X,ESTE,DELL,PR,AEO,HRB,STNG,LBRT,APP,VST,FTI,DHT,
Relative Strength 6 Month (6M-RS)
CVNA,VRT,IMGN,ANF,SMCI,APP,TDS,PLTR,CUBI,CEIX,ETRN,XPO,ZS,BBIO,AFRM,CELH,RELY,FRO,ESTE,FTI,
SCANS
Stocks > 50dma & +/- 3% from 21dma #scan (potential 21dma PB LONG setups) 🐂
ANF VRT DELL CRWD AEO STX PANW LULU TMUS WH FIVE FL
Stocks < 50dma & +/- 3% from 21dma #scan (potential 21dma PB SHORT setups) 🐻
GES ACI CNM SPB CALM TOL LPLA PHM CCK CRI RCL UHS SKX LEA CIEN OZK FHI CPB BERY SCCO ADC TNL KBH AZEK ASB SLM ULTA SYF IPG BOX KRC PLAY USB KEY FITB BA TGT TPH ALLY HBAN DKS FHN CPA MHK SNV ASO UGI CMA JWN BURL AA
Alex’s TAKEAWAYS & GAMEPLAN
The market is trying to carve a bottom here, but with FOMC tomorrow, we need to stay open & ready for all scenarios.
All I know is this:
The market is oversold & extended
We followed through on yesterday’s reversal
The market is STILL in a solid & heavy downtrend below all kma’s.
The reversal’s breadth is still not impressive, but it is going in the right direction
MCSI flipped up today on PTMM. Breadth shift
We have FOMC tomorrow - anything can happen
That's how the buyers will SUPPORT the market on pullbacks that will tell us A LOT more in the following days/weeks if we continue higher. That's where they can't hide their actions & intentions.
The big clue will come on the first rejection. Do we make a higher low, and if yes, can we confirm the buyer’s support with a breadth thrust on that reversal day? (GDB >+400) That’s what I want to see to get back long!
Make no mistake, when the market will turn, AND IT WILL TURN... we have the tools with #PTMM to give us the GO to engage back long in the market.
Important economic news/events (weekly)
GAME PLAN:
With the market trying to carve a bottom from oversold levels, especially with MMFI confirming the breadth higher low bounce, I might try a long trade tomorrow on anticipation….IF the market jumps & holds its gain following the FOMC Q&A session.
If we rollover and follow through lower, I’ll engage back short.
PTMM = RED = SHORT OR CASH
I only trade 1/2 positions (10%)
I trim quickly 1/3 at 1R & 2R into strength
I want to be either close to zero (>-0.25%) or positive on my new exposure risk (NOR) by EOD.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
REFERENCES
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Thanks Alex. Waiting for the green light. I don’t think we will get it for a few more weeks. Good Morning. Enjoy your day.