Good evening folks!
I hope you had a good weekend and are ready for the week ahead!
Ready?… Let’s go!
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Alex ✌️
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GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Friday, we gapped down more than 1.5% on the Job data economic news pre-market. Right at the opening, the market bounced from the 4016$ level and 10dma and rallied all day to close above the 4050$ level. That’s exactly the levels I was watching & shared here for a potential pullback and WBPB, but I was not expecting that we would retest those levels in 1 minute… :)
To see the “dip” being bought that aggressively on a piece of “bad” news gives us a good indication that the risk appetite of investors/institutions is coming back and that rally could have more legs than most thought.
As usual, we’ll follow price action, but this adds conviction to the uptrend.
On the upside, I want to see a follow-through tomorrow after such a big bounce on Friday. If we don’t, this would be a bit concerning. I am still watching the 4137$ level as a potential next target above.
On the downside, we have to hold the 4050$ level + 10dma, period.
NASDAQ (NQ_F) Daily
RUSSELL 2K (RTY_F) Daily
Alex’s TAKEAWAYS
The dip HAS BEEN bought Friday, confirming the WBPB setup on ES_F. This reaction to a 1.5% gap down on bad news is a clear change of character, and it adds conviction to the constructive action we saw in the past few days.
Some observations:
Some leaders confirmed their move to new ATH (ENPH, CELH, TH, etc.)
Very good traction on recent buys
VIX selloff continues and is now in the support area
Stage 1 base breakout on stocks > 200dma
Still, room to run on the ST breadth (stocks> 20dma)
DXY LT base breakdown and below 105$ (even short BORS on the retest)
10Y breaking down, too, and now sitting at the important 3.50% area.
Leading sectors SMH, TAN, XLV, and IGV are showing constructive action
Overall, so many stage 1 base breakouts in the sector’s charts.
No important news this week with a FED blackout period too. (time to swing!)
Like always, I’m always staying alert if the conditions were to change. One step at a time using progressive exposure!
Gameplan:
Conditions are improving, and the positions are getting traction, so if tomorrow we get a good reaction at the open, I want to add more exposure and be around 80% exposure EOD or even more if my progressive exposure allows me.
I think that a great window of opportunity just opened, and I want to go for the jugular and press the gas until we get into the resistance area on ES_F, or I get a red flag on my PF.
In short, I’m going to play more aggressively this week as long the action continues to be positive and the market confirms the rally. If we get a red flag, I will scale back down my exposure.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
LONG PRIME LIST
CPRX 17.71, ZETA 8.86, NBIX 127.61, HLIT 15.29, MP 34.33, INSW 44.07, DHT 10.25, PRTA 66.47, ELF 55.9,
CPRX🎖️
A potential leading name I traded last week had a nice bounce at the 10dma today. This could be a nice entry on the base & 10dma retest following the false breakout.
UPDATE: I entered the stock Friday, but the stock still offers a great entry for a potential breakout.
ALERT:17.71$
ZETA🎖️
A name that I had in my Focuslist earlier this week and that I removed yesterday because of yesterday’s lagging action… never again, Alex ;) We were still above the 21dma and volume lower than average. We just broke out of the lower cheat area, but I will still be looking at the base breakout as this name has been a powerhouse in the last weeks, and I like the RS it showed.
UPDATE: I entered on anticipation Friday, but the 8.86$ pivot is still in play, and I might add to my position on that pivot.
ALERT: 8.86$
NBIX🎖️
Building a base-over-base larger setup, which we tried to breakout last Thursday but couldn’t follow through and got supported at the 10dma and reclaimed the support area by EOD. This is my classic BORS setup.
ALERT: 127.61$
HLIT
Still building a nice tight area just above the recent base area and 10dma. We retested the 10dma & base Friday, forming a BORS setup. We tried to reclaim the 15.29$ pivot but got rejected.
ALERT: 15.29$
MP🎖️
I have an interest in the XME leading sector, and MP is probably the most interesting good R/R setup right now IMO. We broke the larger channel on the last earnings and worked a nice channel back to retest the base/DTL area. Now we broke that channel DTL, and volume seems to come in as well.
ALERT: 34.33$
INSW
Marine shippers seem to be setting up well at the 21dma as a group. I see many names with great charts right now. INSW been consolidating for a few days/weeks now and sitting right at the 21dma & DTL.
ALERT: 44.07$
DHT
Another shipper, like INSW setting up, and we just retested not only the 21dma but also the recent base area. Higher lows right at the 21dma with declining volume within that channel.
ALERT: 10.25$
PRTA🎖️
One of the most powerful gap up with a 88% move on the last ER/news. We then consolidated in a tight base to let the kma’s catch up. I like the recent higher lows near the 50dma and how we tried to reject the breakout last Thursday, only to reclaim it completely on Friday. This is a BORS setup.
ALERT: 66.47$
ELF
One of the strongest names in the past month or so. 37% run following 15% PEG. We are setting up a potential BO10PB setup right now. I would not go too heavy on that play, but the continuation could be a nice trade.
ALERT: 55.90$
🎖️ = Alex’s highest conviction setups
IMPORTANT NOTE:
I have the discipline to build a detailed FocusList each night, but I want to emphasize that I DON’T take all the trades that would trigger their entry. Some reasons to take a specific position over another or not take any trade, even if the alert is activated, are:
The general market price action
My Market-Based exposure model
My Portfolio-based exposure model (progressive exposure)
A high-conviction setup
Price action around the entry pivot
STOP LOSS:
Recent swing low pivot
For less active trading, you can use the recent swing low pivot as a good structure level to place your SL, but consider that the distance with the entry is larger, and you need to adjust your position size to keep the trade risk as a % of your portfolio ideally below 0.5%
LOD (Low Of Day) / HOD (High Of Day)
I like to use the LOD of the day I enter the trade. This way, I can use a larger position for the same trade risk as a % of my portfolio. BUT requires more active trade management and expects to be taken out more often (lower hit rate).
Then even if I take a trade at the entry pivot, I will very often sell it right away if the market roll over or the stock is backing out of the gate. I prefer to re-enter on the entry pivot reclaim than to be stuck with a larger loss. Please study all my education articles closely to learn how I handle trades around these entry pivots.
SECTORS PERFORMANCE
Tonight, I’ll try to go through more charts & sectors than usual, as I want to see the whole picture. One way to assess the general market health is by doing sector analysis…so let’s go!
Leading sectors:
(XLE) Energy - A pivotal day for XLE again tomorrow.
DTL breakout = upside
UTL breakdown = downside
(SMH) Semiconductors - Found support at the 10dma & DTL. WBPB in progress.
(TAN) Solar - We just confirmed the BORS setup on TAN, and it’s looking good with that 83.30$ pivot reclaim on Friday.
(XME) Metals & Mining - One of the new leaders IMO. We just broke out of the stage 1 base and even retested & rejected it Friday. (BORS) I’ll keep a close eye on this sector going forward.
(ITA) Aerospace & Defense - This is a small sector, so I don’t use it too much…but we are breakout into a new post-covid high…! This is THE leading sector right now. I’ll have to dig more & see if we can find potential setups in the next few days.
On watch:
(XBI) Biotech - I think we just broke out of the base, and this is looking good for a potential new uptrend into potentially the 95$ area. This is an excellent low-risk entry, and I initiated LABU Friday.
(IGV) Software - We gapped down below the base level Friday, but closed above it. Need to see a follow-through.
(XLV) Healthcare - Still above 10dma and pushing for new highs…
(XRT) Retail - Potential stage 1 base breakout. This is constructive.
(XLF) Financial - Stage 1 base breakout…
(ITB) Home Construction - Stage 1 base breakout…
MARKET BREADTH & INTERNALS (RISK MODEL)
NYHL (New 52W Highs - Lows) - A bit weakest Friday, but still positive. 20ma is almost positive…
Trend @ -2 (⬆️)
NYAD (Net Adv/Decl) - Lower, but still positive.
20dma @ +395 (⬆️)
MMTH (Stocks > 200dma - LT breadth) - We have a confirmed stage 1 base breakout on the STOCKS > 200dma. Breadth out of stage 1... let that sink in.
MMFI (Stocks > 50dma - MT breadth) - Still uptrend and above all kma’s. 74%
MMTW (Stocks > 20dma - ST breadth) - Still in that 50/80% area, which is very healthy if we don’t break that area. We also have room to run short-term, being only at 70% right now. If we continue this rally, I will watch this one closely to take some profit into strength.
VIX (Volatility S&P 500) - If the VIX breakdown from that 18.50/19.50$ base... things might get funky for the bears.
DXY (US $) - Confirmed short BORS setup on the 105$ resistance area on the US$ (DXY) US$ is in downtrend
US10Y/TNX (US 10Y bond yield) - We tried to bounce from the 3.5% area Friday on the news and were unable to push and got back to the level by EOD. Now, the big question is can we breakdown that area and continue the current downtrend?
ECONOMIC & EARNINGS CALENDAR
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
LEADERS LIST
Overall leaders (PRIME Score)
AEHR,CHGG,VCYT,IGT,BAND,RCUS,GPS,LSCC,YMM,SMCI,BTU,RLX,TGTX,CCRN,GMAB,ALGM,HZNP,CHWY,PDD,ELF,
Fundamental leaders (FA Score)
NOG,PSX,FRO,PR,ESTE,CALM,PDCE,RUN,MUR,HGV,HP,ERF,GFS,STNG,JXN,LBRT,DVAX,SPWR,PDD,CEIX,
Technical leaders (TA Score)
AEHR,RLX,VCYT,RCUS,GPS,BAND,HZNP,TGTX,CHWY,LSCC,IGT,YMM,CHGG,ALGM,CCRN,PRTA,GMAB,ADT,NTNX,BTU,
Relative Strength 1 Month (1M-RS)
XPEV,YMM,IQ,BZ,RLX,VIPS,TGTX,PRM,PDD,JD,RCUS,BAND,APPS,CENX,LI,CLF,BIDU,ZTO,BL,SABR,
Relative Strength 3 Month (3M-RS)
PRTA,AEHR,RLX,HZNP,BAND,GPS,BIIB,VCYT,CCRN,RCL,WFRD,IGT,ELF,RCUS,CHGG,CHX,ALGM,INSW,YPF,AER,
Relative Strength 6 Month (6M-RS)
AEHR,PRTA,CPRX,ELF,CCRN,TGTX,YPF,NTNX,ARRY,INSW,VCYT,DHT,CELH,ENPH,PDD,RCUS,RLX,SMCI,CHWY,GMAB,
REFERENCES
Articles on the system:
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