Alex's daily Market update & Focuslist report - 08/06
Indices reject kma's & base area, while breadth still holding.
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GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily/Weekly
ES bounced and attempted to reclaim the 4551$ base level but got rejected right in that area & 10/21dma. We closed the day at the lows, to a new low right at the 4493$ June base area.
This base & kma’s rejection was the action I didn’t want to see and confirm the potential of a prolonged pullback, IMO. At least the odds increased with Friday’s action.
I am watching very close how this 4493$ area will hold in the next few days. This could act as ST support and provide some bounce to open the week, but if we lose it, I think the market can pullback further down.
Levels I’m watching for potential support if we pullback further:
50dma: -4.20% from the top (1.3% from here)
4303$ (would be around 200d/30wma) : -7.13% (4.2%)
4190$ recent base: -9.77% (7.0%)
RUSSELL 2K (RTY_F) Daily/Weekly
We are still holding the range area & 21dma, but if we can’t hold here, a retest of the 10wma or 1930$ area is likely.
NASDAQ (NQ_F) Daily/Weekly
15475$ retest & rejection (sBORS) on Friday. 50dma retest is likely.
PT MARKET MODEL (PTMM) & INTERNALS
PTMM is on a GREEN market (🟩), on PULLBACK (🟥) signal.
Despite the ugly reversal on the indices, mainly dragged down by AAPL, and mega-caps, the overall market (breadth) was relatively strong on Friday.
That being said, the PULLBACK signal confirms itself here with some critical signals following through:
MCSI is in a downtrend and flipped below the 10dma signal.
ST_momentum was already negative, not MT_momentum flipped negative on Friday.
The price is below 10/21dma.
The pullback continues to play out, and until we see MSCI & momentum curve back up, along with price reclaiming kma’s…we’ll remain in a low probability market that I won’t want to engage.
I want to focus on trade opportunities when MCSI is flipping back up and crossing the 10dma as a signal. That’s when horses get out of the gate and stay out.
We could try to anticipate a bit when it rounds up following a prolonged downtrend, but the real confirmation comes on the signal line cross-up.
Now, we cross down the 10dma after a prolonged uptrend, adding to the probability of a more prolonged pullback.
Internals
MMTW (Stocks > 20dma - ST market extension)
Pullback continues and we are now below the 50% level.
MMFI (Stocks > 50dma - MT market extension)
Below the 10wma as we continue to move lower & away from the overbought area.
That’s the action I didn’t want to see on Friday, as we retested the 10 & 50dma after a good move down in the morning to reclaim all structures and close to a new high above the 17.08$ recent swing high pivot.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
DTL rejection and still back around kma’s. Good to see volatility in bond market dampening.
10Y Bond Yields (daily)
Big 4.09% rejection on Friday. We’ll need to see if we follow through lower after that bearish outside day & false breakout.
That 1.52 area is still holding since 2022, and we bounced hard right there again last week. We remain below all kma’s, but we’ll have to monitor that closely this week.
BTC/USD (Bitcoin)
Still holding well the 28478$ level & 10wma, but not much direction for the past 2 weeks. Almost too tight for too long now. We’ll see this week if we push or break.
In the following sections of tonight’s letter, I’ll cover essential parts of my daily routine & preparation for tomorrow’s trading session.
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✅ My overall current market Takeaways & GAMEPLAN for tomorrow
✅ My daily & weekly Focuslist (POSITION+SWING), including setups, alert levels & explanation
✅ My Portfolio update
✅ Sectors Review
✅ Economic Calendar
✅ Prime Model spreadsheet (PT_database)
✅ Leaders list (technicals, fundamentals & potential TMLs)
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