Alex's daily Market update & Focuslist - 02/20
Time for NVDA earnings!
Good evening!
The update from last night could not be more accurate for tonight, as we saw the market following through on Friday’s reversal and the technology extended sector showing even more selling.
I would add that the VIX seems to be throwing an additional caution signal today as it bounced from the recent structure & and today.
We also have FOMC minutes & NVDA earnings after the market close…so there are even more reasons to be cautious and wait for clarity.
Let’s be patient and wait for our pitch.
After 15 weeks of a strong uptrend in the market, we see some weakness in some market areas. Especially in the leading technology sectors, Friday's reversal confirmed a potential lower high structure in many charts. Semis, Software, Cloud, Cyber, etc. We’ll have to monitor this possible structure shift as it might be the start of some digestion or pullback in these sectors.
As for the broad market, despite some LT breadth overbought conditions, we still don’t see these red flags, and the uptrend remains strong and breadth strong. We’ll have to see if the tech pullback confirms this week and if the selling spreads into other market areas.
Traction is also harder on new buys for me in the last 2 weeks, as I can’t get any actual multi-day/week moves for more significant swings. That’s also some great feedback that I follow in my own trading, and that’s why I remain very light in exposure following last week’s CPI distribution day.
Progressive exposure is a crucial tactic for me, and if I can’t get profits to finance my overnight risk, then the market is sending me the message it’s not easy money, and caution is needed.
In final words, stay cautious as the market is sending us some hints in the last few days following CPI despite the trend being up & (still) strong. Listen to your trades feedback, and manage your downside first. After such a great start to the year, you want to stay as close to your equity high as possible for the next big window of opportunity.
Cheers & have a good trading week!
Alex ✌️
Tonight’s daily report content
PrimeTrading Market Model #PTMM + Takeaways
General Market Analysis: NASDAQ - S&P 500 - RUSSEL 2K - OTHERS, including my daily levels & my bullish and bearish scenarios
Market Internals
Sectors & Themes Analysis
Daily Focuslist including setups, alert levels & explanation (long & short)
Leaders list + Scans (technicals, fundamentals & potential TMLs)
My Portfolio Update
Economic Calendar
PrimeTrading Market Model #PTMM
The market followed through on Friday's weakness today, with an acceleration in selling pressure.
We get in a tough spot, where we still have the MT + LT being green, but the ST begins to crack while the MT/LT momo is still extended. We have NVDA earnings tomorrow, which should give us more clarity later this week.
So far, I think we must remain cautious and wait to see if this market break will carry on and pick up momentum or not. Is this a dip to be bought in a strong MT/LT uptrend, or the start of a pullback...I don't know but we'll make sure to follow the clues the market leaves us this week.
I tend to remain active when the MT/LT market is still in a confirmed uptrend on PTMM, with tight risk, and reduce or cut exposure if the setups don't materialize and I can't get good momentum as I buy. That allows me to follow where the strength is and also allows me to be early on the market turn, like earlier this year. If I can't get traction, then no exposure...so it's a self-regulation process.
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