Alex's daily Market update & Focuslist - 06/19
The market remains in an uptrend, but failed to make a new high on Friday.
Good evening guys,
Enjoy tonight’s letter!
Alex ✌️
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GENERAL MARKET ANALYSIS
NASDAQ (NQ_F) Daily
Price Action Analysis:
Last Friday, the market & NQ failed to make a new high as we failed to breakout from the 15441$ level.
Knowing we are ST extended, we’ll have to monitor closely if this is the beginning of a pullback going into this week. If that’s the case, we’ll look how it unfolds to determine the healthiness of it.
We are now 10.2% above the 50dma, so still ST extended. (CAREFUL)
We remain in a strong uptrend, above all kma’s.
RUSSELL 2K growth (IWO) Daily
Price Action Analysis:
Failed to make a new high and follow through on Tuesday’s reversal. We were rejected at the 243.25$ level and created a LOWER HIGH, indicating a pullback started. The next few days should give us more information. How do we handle the 10dma, the 238$ range pivot, etc.
S&P500 (ES_F) Daily
Price Action Analysis:
False breakout to new high. Like NQ, we’ll have to monitor for signs of healthiness if we get a deeper pullback in the next few days.
PT_UL BREADTH & INTERNALS
Price closed DOWN (-0.92%) and still ABOVE all kma’s. (Right at 5dma)
Breadth was NEGATIVE, and increasing (-229), with a up U/D volume (divergence again)
MSCI uptrend + ABOVE 10dma. (But flattens out - if we get a reversal, it will be a pullback indication)
0.4x daily momentum. (weak)
NNH at +19 (24nd in a row)
The market model is on a GREEN signal (🟩)
Bottomline: We had our second negative breadth reading on Friday, and we begin to see signs of breadth slowing down. With the market ST extended and breadth slowing, we might get a PULLBACK signal tomorrow if we get below the 5dma and momentum breaks further down.
Internals
10dma rejection and closed near the lows. Will have to see tomorrow if it was OPEX related, but this kind of action is normally bullish.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
New low. (bullish)
Weekly DTL breakout and it looks like Bond Yields want to start to trend higher again.
Flat.
Small reaction rally below all kma’s. Looks like a possible 50dma retest & rejection. The ST trend is down.
BTC/USD (Bitcoin)
BTC continues to show strength from last week shakeout, but we are still below the 50dma and didn’t make a new Higher High yet. The trend remains down, but this weekly channel is building constructively.
SECTORS ANALYSIS
1W & 1M Relative Strength (SPY) sectors performance:
Leading sectors:
SMH Semiconductors: Rejected at 155.74$ previous high. A 151.71$ level & 10dma is very possible this week and would only be healthy.
IGV Software: Failed to make a new high, on volume. This is certainly a red flag and we’ll have to see how we handle a 344.75$ level retest.
CIBR Cybersecurity: Failed to make a new high, but volume was OK. Couple days pullback to the 10dma would be very healthy this week.
FDN Internet: Failed new high too. We might get a range level retest (BORS).
ITB Home Builders: Failed breakout, but on very low volume. Still looking very healthy.
XLY Consumer discretionary: Failed to make a new high, on volume. Due for a pullback.
Sectors potential setups & early rally :
XLF Financials: Failed to follow-through, but still not a red flag as we might retest the weekly base level.
XBI Biotech: Acted very weak and got rejected at the 89.83$ weekly high on the larger weekly DTL breakout. This is not a good look with the UTL breakdown and weekly false breakout. A deeper pullback might be needed.
XRT Retail: Not able to follow through as we were rejected at the 64.23$ weekly base level. Might need to retest the recent base level around the 10dma.
PEJ Leisure & Entertainment: False breakout and new lower high here too, but still looking very constructive.
XLV Health Care: Failed to follow through, but not a big red flag as we almost closed flat. Still looks constructive.
TAN Solars: Failed breakout on Friday, but still looking pretty constructive and another attempt could be made this week.
FOCUS & LEADERS LIST
NET (WBPB) - Alert: 69.44, SL: 66.57
Was not able to push decisively on the weekly DTL breakout retest (WBPB), but we still closed green on the week despite Friday’s weak action.
I will look for a re-entry in this name.
CFLT (BO21PB) - Alert: 34.99, SL: 33.03
Recent leader with a 88% run post-earnings. We are now digesting the recent move and building a nice HTF with a higher low and strong action on Friday. We are still extended weekly, so adjust position accordingly.
MDB (WBPB) - Alert: 389.31, SL: 370.36
Following the recent PEG, we are still holding VERY well right below the 2022 rally high with now 2 tight weeks. I will be looking at a reclaim of that weekly level to get involved in this PEG play.
PATH (BORL) - Alert: 18.62, SL: 17.56
PATH is working on a stage 1 base area retest right now. We acted very strong last week and made an inside day Friday.
ACVA (BO21PB) - Alert: 17.97, SL: 17.16
Still digesting and building tightly above the 21dma and ER_AVWAP. It’s now looking ready for another leg higher with now 4 weeks tight.
LEADERS LIST
Overall leaders (PRIME Score)
IMGN,PLTR,SMCI,SDGR,CCL,IOT,MDB,NVDA,SOFI,APP,NVTS,XP,EXPI,SGH,META,AFRM,VRT,COHR,RCL,RDFN,
Fundamental leaders (FA Score)
RCL,ELF,NCLH,CELH,TMDX,DT,WNC,HTGC,SDGR,WYNN,EXAS,FUTU,CRSP,ALGM,ARRY,CSIQ,ALB,MGM,CALM,PANW,
Technical leaders (TA Score)
IMGN,PLTR,SMCI,SDGR,CCL,IOT,MDB,NVDA,SOFI,APP,NVTS,XP,EXPI,SGH,META,AFRM,VRT,COHR,RCL,RDFN,
Relative Strength 1 Month (1M-RS)
SOFI,COHR,GTLB,PSTG,CCL,IOT,TSLA,BRZE,MCB,EXTR,GH,NCLH,PLUG,IMGN,AYX,TWST,NCNO,SDGR,FIVN,GTLS,
Relative Strength 3 Month (3M-RS)
IMGN,SMCI,PLTR,XP,CCL,SDGR,RXDX,APP,AFRM,TGTX,SGH,MDB,CELH,VRT,EXPI,NVDA,NYCB,COHR,CFLT,SOFI,
Relative Strength 6 Month (6M-RS)
IMGN,SMCI,TGTX,PLTR,NVDA,APP,RIOT,NVTS,SDGR,MARA,META,IOT,CCL,RDFN,RXDX,MDB,ACLS,ACVA,DKNG,SOFI,
Alex’s TAKEAWAYS & GAMEPLAN
Major indices started to show some weakness signs last Friday with false breakout and red closes. This was OPEX & quad-withching, so I want to see tomorrow how this important event affected the price action, but otherwise a pullback might be starting right now.
The market remains incredibly strong, and dips are bought aggressively too, so despite anticipating a pullback, the trend remains strong & up. We don’t know how long & extended this market can stay out of a big bear market, so you still want to remain active in case we are in a lock-out rally.
In short, I’m still playing cautiously (controlling the exposure and trimming into strength) this market, even if it’s overbought until we get the red flags signaling a pullback.
You don’t want to lean too bearish while the market showed that much strength and the trend remains above all kma’s.
Here are couples of things I’ll watch tomorrow:
Will indices follow through on Friday’s reversal and confirm the start of a pullback?
MMTW (% stocks >20dma) are at an overbought level. There might be more room for the upside, but a wide PB is possible soon.
VIX was down and looking very constructive.
Credit Spreads & Bond market volatility (MOVE) confirmed an important move for intermediate market health. We want to see those follow through.
Friday was OPEX, how much of Friday’s action was real and not event-related?
GAME PLAN:
Exposure model = GREEN signal (🟩)
Tomorrow I will only manage my current positions and look to add only if the market show real strength to cancel out Friday’s action. If the market is flat or weak, I will not add new exposure.
Make sure to take some profits into strength as we advance in this rally, especially if you have stocks getting ST extended.
Economic news/events:
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
REFERENCES
Articles on the system:
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