Alex's daily Market update & Focuslist - 11/24
Happy Thanksgiving!
Good evening folks!
I want to take this opportunity to wish every one of you a very happy Thanksgiving. I hope you enjoyed some good food and an amazing time with your family. π¦π
Now, 10% of the year is left, time to make it count and, have our best trading of the year & finish it strong. LG!
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Alex βοΈ
GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Wednesday, we followed through on the channel breakout & 10dma bounce by reclaiming the 4016$ base area level. This rally was the level I wanted to see to confirm the rally continuation higher.
That being said, we are currently in a very low volume week due to Thanksgiving, so we always have to take this price action with a grain of salt, as we often see these kinds of weekβs trends reversed when the volume comes back.
Note that tomorrow the market will close early, at 13:00 (EST)
On the upside, we ideally want to see follow-through action on the 4016$ breakout and see a continuation higher. I doubt weβll reach my next target of 4137$ tomorrow, which is a 2.40% move higher, but another close higher would be positive.
On the downside, we want to ideally see the 4016$ level hold if we retest it tomorrow; otherwise, I want to see the 3964/4016$ now support area hold as we advance. If not, Iβll consider the rollover.
NASDAQ (NQ_F) Daily
RUSSELL 2K (RTY_F) Daily
In the following sections of tonightβs letter, Iβll cover important parts of my daily routine & preparation for tomorrowβs trading session.
β My takeaways, including my trading gameplan for tomorrow
β My Portfolio update
β My daily Focuslist including setups, alert levels & explanation
β Sectors Review
β Market Breadth & Internals
β Economic Calendar
β Prime Model spreadsheet (PT_database)
β Leaders list (technicals, fundamentals & potential TMLs)
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Alexβs TAKEAWAYS
We just had the channel breakout and follow-through we were waiting for on ES_F, and many things under the hood also look very bullish, in my opinion.
Wednesday, following the FOMC minutes release, I saw a divergence that troubled me a bit. The indices reacted positively and rallied on the news, but the leading names did not and pulled back to close the day very weak. Thatβs a red flag to me, and I reduced my exposure more than I thought before the close for that reason. Always think of risk first when in doubt.
That being said, I still see a lot of positives under the hood.
The VIX just made a new cycle low, and Aug. 19/20$ low is within reaching distance.
DXY & the 10Y followed through on their 10dma rejection & still below all kmaβs.
XLE, SMH, and TAN are the leading sectors and shaping up for breakouts
Many other sectors just bounced and are showing constructive action. XBI, IGV, XLV, etc.
Breadth: Stocks > 200 just broke the recent range pivot high and are now above Aug. highs.
NNH & A/D is also showing constructive action
Although I see all these positive things, I always keep ready for both scenarios, especially with a Holiday & a small week on low volume.
Gameplan:
Tomorrow is a short day as the market closes at 13:00, and I also expect the price action to be pretty slowβ¦so I wonβt push too much intraday or keep more than 30% exposure into the weekend.
There is STEM that I have followed for a while and is setting up with a perfect WBPB setup that I would like to position into, so that will probably be my main focus tomorrow.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
LONG FOCUSLIST
HLIT 14.91, STEM 13.62, PCG 15.43,
HLIT
A stock that was very strong before the earningsβ bad reaction is not setting up for a potential entry following the 50dma retest & higher lows. We broke that DTL and made an excellent thrust and now pulling back to retest the kmaβs. Iβm looking at the mini-channel breakout, and recent swing high reclaim for an entry.
UPDATE: It showed very constructive action Wed. but had a weak close, too, and finished the day below the entry pivot. I would use the same pivot for an entry tomorrow.
ALERT: 14.91$
STEMποΈ
One of my favorite names is setting up a perfect WBPB setup right at the base area & kma's. Mini-channel worked to retest the DTL on low volume and three higher lows in the base. Itβs my focus tomorrow if the market is good.
ALERT: 13.62$ or DTL if we open lower
PCGποΈ
Still basing after the initial 25% leg. We are contracting in both price & volume and we just reclaimed the 15.03$ level after retesting the area & the 10dma on Wed. I like how this setup could also be seen as a WBPB following the recent wedge breakout and the CLEAR VCP (Volatility contraction pattern) characteristics.
ALERT: 15.43$
ποΈ = Alexβs highest conviction setups
SHORT FOCUSLIST
SECTORS PERFORMANCE
Leading sectors:
(XLE) Energy - Still building tight action in the base area above the 21dma. We just had an inside day Wed. We begin to see some individual names breaking down in that sector, so weβll have to look closely at that 21dma or UTL breakdown if it happens.
(SMH) Semiconductors - Leading sector. Followed through on the DTL breakout but found resistance at the resistance area top level. Can we breakout, or weβll be rejected and formed an LH?
(TAN) Solar - Leading sector. Solid follow-through action after Tuesday's 10dma bounce. Looking really ready for continuation with a 83.10$ level breakout.
On watch:
(XBI) Biotech - Tried to break that 81.75$ pivot, but got rejected and back into the kmaβs. Still look constructive and could attempt another breakout of that pivot.
(IGV) Software - Very positive action on volume last Wed. If we can reclaim the 271.80$ level, weβll really have something to work with here.
MARKET BREADTH & INTERNALS (RISK MODEL)
NYHL (New 52W Highs - Lows) - oscillating around with a positive reading today.
Trend @ -27 (β¬οΈ)
NYAD (Net Adv/Decl) - Staying positive and trend back up.
20dma @ +2727 (β¬οΈ)
MMTH (Stocks > 200dma - LT breadth) - just broke the recent range pivot high and made a new HH
MMFI (Stocks > 50dma - MT breadth) - Channel breakout follow-through, but still within range.
MMTW (Stocks > 20dma - ST breadth) - Bounce at the 21dma, but still in the larger wedge.
VIX (Volatility S&P 500) - VIX continues to trend lower and now getting a bit stretched with Wednesday's move. I am watching the 18.70/19.70$ area as being a potential big support area that COULD coincide with a reversal in the general market. We could also see some basing action like in Aug. before a reversal. Weβll follow that closely in the next few days.
DXY (US $) - Followed-through on the 10dma rejection and back in the support area. Weβll follow that closely in the next few days.
US10Y/TNX (US 10Y bond yield) - Followed-through on the 10dma rejection
ECONOMIC & EARNINGS CALENDAR
PRIME MODEL SPREADSHEET (PT_database)
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LEADERS LIST
Overall leaders (PRIME Score)
AEHR,ASC,CHGG,SMCI,RCL,GPS,VAL,PSX,CHX,ELF,SHLS,CCRN,CPRX,DHT,PR,STNG,ALGM,IGT,GMAB,AER,
Fundamental leaders (FA Score)
RES,SIGA,NOG,PSX,ASC,PR,DRH,TNK,ESTE,LTHM,CPE,CALM,PDCE,SWAV,RUN,MUR,HGV,SM,TRIP,ERF,
Technical leaders (TA Score)
GPS,AEHR,CHGG,AEO,RCL,SMCI,SHLS,ALGM,ASC,CHX,CPRX,ELF,CCRN,AER,LPG,VAL,IGT,BIIB,NAT,GMAB,
Relative Strength 1 Month (1M-RS)
AEO,CERT,SHLS,HIMS,ARRY,GPS,TGTX,RUN,AEHR,SPWR,CNK,LSCC,BAND,ALGM,SMCI,JD,YMM,USFD,CEIX,ZTO,
Relative Strength 3 Month (3M-RS)
WFRD,GPS,ASC,BIIB,AEHR,INSW,ELF,CHGG,YPF,RCL,TASK,LPG,XPRO,CHX,VAL,TNK,NAT,CCRN,DNUT,DHT,
Relative Strength 6 Month (6M-RS)
AEHR,ELF,ASC,WFRD,GPS,BIIB,INSW,CHGG,YPF,CCRN,CHX,DHT,NAT,TNK,LPG,CPRX,RCL,XPRO,HLIT,SHLS,
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REFERENCES
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Hi Alex, new subscriber here.
We all know and you stress as well how important risk management is, and that one shouldn't enter a trade without a clear and defined stop loss protection.
It would be great if you can add stops to the alerts, so we can better understand when the setup is invalidated and it's time to get out.