Alex's daily Market update & Focuslist report - 11/02
GDB closed at +634, as we confirm a real BREADTH THRUST. short-term extended, but PRICE-MOMENTUM-BREADTH are aligned.
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GENERAL MARKET ANALYSIS
S&P500 (ES_F)
An impressive FOMC follow-through day, as we pushed +1.87% higher and reclaimed the 21dma & 4308$. Two important levels, we discussed last night.
We closed right at the 4337$ level by EOD.
We are now four up days and +5.25% higher from the lows. We are ST extended after this impressive thrust from the lows, and we’ll have to be careful for the high probability of a pullback or stress test…which would be healthy & welcomed.
I’ll watch these levels as potential resistance for retest & rejection. If we reclaim those, it would be seen as constructive.
4355$
50dma
4390$
I’ll watch these levels as potential support if we follow through lower (or retest & go):
21dma
4308$
4337$
4264$
NASDAQ (NQ_F)
RUSSELL 2K (RTY_F)
PrimeTrading Market Model #PTMM
PTMM is now on an ORANGE market signal (🟧) (First switch since Sept. 7th)
GDB closed at +634, as we confirm a real BREADTH THRUST. Short-term PRICE-MOMENTUM-BREADTH are aligned.
Price +3.30%
NNL improved a lot (-1.5% only)
Strong daily momentum @ 12.94
MCSI sitting right at 10dma
5 & 10-day ratio flipping positive
ALL ST indicators are now green - flipping from RED to ORANGE market signal
Early signs of a potential bottom seem to be confirmed here, with a STRONG breadth thrust today as we saw strong momentum from the lows. That's the breadth expansion we want to see from a bottom attempt.
That said, we are ST extended after four straight-up days from the lows, with today possibly being an ST exhaustion move. We could see some backfilling or some stress test in the coming days, and we'll watch closely how selling pressure is, along with how buyers are stepping in to defend support.
We want < -400 GDB reading on the pullback and > +400 on the reversal as buyers are stepping back in.
Action/Rules:
New LONG exposure allowed
1/4 positions (5%)
Trimming 1/3 at 1R & 2R
Keeping 1/3 as a runner position
PF exposure max = 20%
New open risk > -0.25%
Internals
MMTW (Stocks > 20dma - market extension)
Big push today, and we are getting into a structure area where the last 2 reversal happened—a spot to watch for a PB.
MMFI (Stocks > 50dma - market extension)
Same thing here, good push today, but getting right into recent structure which could be a clue of a possible pullback. Again, we can go right through, but that’s a spot to watch tomorrow.
Breaking below the 50dma. Very constructive action.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
Broke below the 50dma. CONSTRUCTIVE.
10Y Bond Yields (daily)
Follow-through on the 21dma break. CONSTRUCTIVE.
US dollar index (DXY)
Still in the range, but good follow-through on yesterday’s false breakout. We need to see that range break side for more information.
That’s the big risk-on chart for me. Credit Spreads are breaking down from that recent structure, down more than 1% below the 50dma.
That is VERY constructive and a clear signal that this push from the low might not only be another counter-trend rally…but probably something more developing. Remain to be seen, but that’s great to see.
BTC/USD (Bitcoin)
Potential false breakout, but still supported at UTL. Still very ST extended…a PB would be healthy.
SECTORS & THEMES ANALYSIS
WHAT A DAY for ARKK (let's be honest... short covering)
Mega-cap did well, but really small & micro stuff shined today
FFTY negative...
Strong day for Energy & RE
BLOK strong RS today
Lot of beaten down themes leading today, reinforcing the short covering thesis
LEADERS (TOP10 - Overall/Weekly/Monthly/52w low/52w high)
10 leading themes charts (w/ pivots):
1 Uranium URA
2 Nuclear NLR
3 Semiconductors SMH
4 Blockchain Technology BLOK
5 Internet PNQI
6 Oil & Gas Equip. & Services PXJ
7 Software IGV
8 Oil & Gas Exploration & Production PXE
9 Natural Gas Producers FCG
10 Artificial Intelligence & Technology AIQ
FOCUSLIST
Only GDX in long FL. Everything is ST extended and past proper tight buy points. The stalk list is updated, and those will be the names I'll keep a close watch for an entry around the 21dma on a PB/stress test.
LONG FOCUSLIST
GDX daily/130m - VanEck:Gold Miners - Alert: 28.39, SL: 27.9
After breaking out of that long-term wedge, we are now retesting the 21/50dma and DTL in a tight channel. We seem to stabilize with volume drying up before making a channel breakout that would confirm the potential continuation higher.
SHORT FOCUSLIST (simplified)
LEADERS LIST
Overall leaders (PRIME Score)
ANF,VST,PDD,ANET,DELL,VRT,NU,TDS,XPO,FTAI,X,RELY,AEO,CRWD,NRG,COUR,HCC,PINS,RBA,SPOT,
Fundamental leaders (FA Score)
NVDA,INDI,NU,TMDX,META,SDRL,LVS,NCLH,RBA,PODD,DLO,DUOL,CCJ,TGTX,CCL,PANW,MLCO,TDW,FSLR,DLR,
Technical leaders (TA Score)
ANF,TDS,LPG,FRO,RELY,FTI,X,ESTE,CCJ,PDD,DELL,ANET,VRT,LBRT,XPO,FTAI,INSW,VST,RRC,PR,
Relative Strength 1 Month (1M-RS)
TGTX,SPR,MSTR,BTTR,NEP,CUBI,APLS,LPG,PI,EGO,FRO,CYTK,FTAI,AR,RRC,NRG,INSW,MARA,CRK,DG,
Relative Strength 3 Month (3M-RS)
TDS,APLS,ANF,RELY,FRO,CPRI,X,ESTE,CEIX,LPG,DELL,PR,HRB,CCJ,LBRT,DHT,AEO,PDD,INSW,VST,
Relative Strength 6 Month (6M-RS)
CVNA,IMGN,ANF,VRT,SMCI,APP,CUBI,TDS,AFRM,PLTR,BBIO,ETRN,LPG,ZS,XPO,TDW,FTI,LBRT,ESTE,FRO,
SCANS
Stocks > 50dma & +/- 3% from 21dma #scan - Sorted by RS (21dma PB LONG setups) 🐂
ZS
ST extended & stalking for a pullback to 21/50dma - Sorted by RS 👀
DELL VRT CRWD COUR HCC PANW ZS META CNM
Stocks < 50dma & +/- 3% from 21dma #scan (21dma PB SHORT setups) 🐻
NVDA SPB PSTG RMBS ACI WDAY WDC BXMT NTAP URI CIEN LRCX UHS CF CCK FHI DPZ AGCO FRSH SCCO ZION SLG CAKE SKX
Alex’s TAKEAWAYS & GAMEPLAN
There’s the breadth expansion I wanted to see today, with PTMM showing a >+600 reading and switching to an ORANGE signal... after being RED since Sept. 7th.
It feels like the first recent time that we have VIX, DXY, Bond Yields, Credit Spreads, and breadth from oversold levels all aligning up without divergence. It remains to be seen if we’ll develop into a more significant tradable rally, but I like what I see right now.
That said, we are ST extended after the last four days’ push. Pretty much all recent setups are extended, and we are getting into the recent resistance structure on MMTW/MMFI.
I expect a pullback/stress test in the short term that will only be healthy and welcomed to assess the real strength of the market. I would not go crazy about ramping up exposure right here & now knowing that.
That’s what we’ll need to look for once the pullback is happening:
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!
Important economic news/events (weekly)
GAME PLAN:
Not seeing actionnable setups for tomorrow, and I won’t look to increase my exposure if I can’t de-risk my new COUR & PANW trades.
For PANW, FTNT earnings seems to have affected the position, so I might wait a bit for the open to see how PANW react, and if we can’t bounce I’ll cut the position very quickly.
GDX interests me as we could see decoupling from equities during a pullback.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
REFERENCES
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Thanks Alex. Have a great day and weekend.
Thank you for sharing your work, lots of great information in there. I will need to go through it again as I am sure I missed a lot.