Alex's daily Market update & Focuslist - 01/25
The market puts a huge expectation breaker bar today!
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Alex ✌️🙏
GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Price Action Analysis:
The market puts a huge expectation breaker bar today!
ES_F got spooked by MSFT earnings and opened very weakly. We sold off hard at the open, undercut the 4016$ level, and went exactly at the 3964$ + 50/21dma area I highlighted last night. We found support there, and buyers started to step in past 10:00 and closed GREEN.
Knowing that we are now at such an important inflection point and it’s a make-or-break situation, the buyers stepping in aggressively to defend this market is a clear bullish signal to me and adds a lot of conviction to the past 2w’s action.
Always keep an open mind on both possible scenarios (bull/bear). It's a big part of my success.
I always keep both scenarios in the back of my head. This will not be a great-looking chart if we close the week down from here on ES_F. 4016$ rejection, bear market DTL rejection from a 30w/10w/5w ema's launchpad and a lower high structure. I still like the action of the individual stocks and breadth power...but we have to push here IMO and not rollover.
On the upside,
Monday’s high pivot at 4056$ will be the first important level to watch tomorrow, then 4082$ on ES_F will be a pretty big potential resistance level.
On the downside,
The bear market DTL and the 4016$ level will be important levels to find support, and the market will come under pressure again.
NASDAQ (NQ_F) Daily
RUSSELL 2K (RTY_F) Daily
In the following sections of tonight’s letter, I’ll cover essential parts of my daily routine & preparation for tomorrow’s trading session.
✅ My overall current market Takeaways & GAMEPLAN for tomorrow
✅ PRIME_LIST (top 5 potential TML’s)
✅ My daily Focuslist, including setups, alert levels & explanation (LONG/SHORT)
✅ My Portfolio update
✅ Sectors Review
✅ Market Breadth & Internals
✅ Economic Calendar
✅ Prime Model spreadsheet (PT_database)
✅ Leaders list (technicals, fundamentals & potential TMLs)
Alex’s TAKEAWAYS
The buyers defended this market VERY AGGRESSIVELY today, and for me, it’s a clear bullish signal and adds conviction to the action we are seeing in the last two weeks. If we are to follow through tomorrow and breakout above 1905$ on RTY_F (which is a very important base resistance area), break that bear market support area on the VIX, and see the US$ breaking lower from the support area it sits in…then I will push forward and look for a better trading environment in the short/intermediate term.
That said, we also have important news tomorrow morning, like GDP and Job data, so I keep the bearish scenario at the back of my head:
But, I also keep in mind that we are at a CRITICAL level, and if we were to reject this area on ES_F (4016$+bear market DTL+10/30wma) along with closing the week negative…this would put us in a really bad spot IMO. So, I’m playing it, but I’m ready to jump ship if things turn sour.
It makes or breaks
Some observations:
ES_F puts a huge expectation breaker day (hammer bar)
Breadth opened weak, but closed positive.
Leading names held where they add to at key levels, and we are seeing again tonight more & more setups developing.
VIX rejected at the 21dma after this morning’s spike, now < 20 and penetrating the big bear market support area. (very bullish if we break lower)
DXY (US$) - rejected at the 10dma and pushing lower
My MT_SIGNAL (McClellan sum. index & 10dma) is in CONFIRMED UPTREND.
My LT_SIGNAL (Cumulative new 52W H/L & 50dma) CROSSED the 50dma and confirmed a BULL market signal.
Market health & Trend indicators:
LT_SIGNAL: uptrend (black) + ABOVE 50dma = BULL market developing (🟩)
MT_SIGNAL: uptrend (black) + ABOVE 10dma = UPTREND (🟩)
Tomorrow's economic news/events:
GAME PLAN:
If we get a good reaction to economic data tomorrow and we follow through, I think this could spark an important move in the market. At least until FOMC next week.
I will be looking to be a bit more aggressive by using full positions and pushing the exposure if my progressive exposure allows me.
This might be the time to press the pedal to move the EC while we can.
EXPOSURE MODEL:
PRIME_LIST (NEW)
AEHR FOUR ARRY MELI LSCC
AEHR: New high with a 34.98$ pivot breakout today. AEHR is acting like the current market leader. It never gave much on the market selloff this morning and was the first green. I have a 39.50$ target for this move from the Measured Move at the pre-ER low.
FOUR: We held the 21dma and the UTL today. This is a great first step, but let it build and tighten on the right side.
ARRY: It took me out of my 22.38$ SL this morning, but it still looks very good, sitting just below this base level. I plan to re-enter if we reclaim that base level.
MELI: Acting very strong today, with a 1108$ base breakout to a new high. I hesitated and didn’t pull the trigger as I wanted at least a 10dma pullback that we didn’t get. I’ll continue monitoring this potential TML.
LSCC: The most interesting semi’s name IMO. Building the right side above the 10dma and retested the base area today to form a BORS setup. It will be in the FL.
FOCUSLIST (LONG)
LSCC 76.47, ARRY 23.5, CPRI 64.38, MPWR 429.6, FLYW 26.52, BAND 23.18
LSCC - Alert: 76.47, SL: 72.68
See PRIME_LIST
ARRY - Alert: 23.5, SL: 22.2
See PRIME_LIST
CPRI - Alert: 64.38, SL: 61.2
Luxury retail name that is still building its base after a 21dma pullback. Slower mover but trend well.
MPWR - Alert: 429.6, SL: 415.52
Stage 1 base breakout play, so further from 52w high. I like the breakout we had yesterday, and I’m looking for the retest of the area that would lead to my BORS setup.
FLYW - Alert: 26.52, SL: 25.14
A regular of the FL, but I could not positioned in it yet. We now have 3/4 failed attempts and building higher lows. Now is not the time to remove it from the FL, as this might be the good one.
BAND - Alert: 23.18, SL: 21.47
I have been stopped on it today at the open. I will be looking to re-position if we reclaim that 23.18$ pivot I used for my previous entry. We held that support area and closed above the 50dma today.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
SECTORS PERFORMANCE
Leading sectors:
(SMH) Semiconductors - We gapped down but found support quickly and did not even retest the 10dma. We closed above the 234.59$ base level, so we could see today as a BORS setup.
(TAN) Solar - The sector got downgraded this morning and created that wide weakness in solar names. We gapped below the 50dma but quickly found support at the 77.73$ base area and closed green again.
(XBI) Biotech - Best looking sector for a low-risk entry right now, IMO. We broke from that multi-month channel, formed a long stage 1 base (A bit wild), and broke out last week only to retest the 85$ base level Friday. I initiated my position last week and added more aggressively today on the pullback.
(GDX) Gold miners - 32.75$ pivot breakout, confirmation the trend continuation.
(XLE) Energy - XLE is setting up for a big multi-month base breakout. We retested the 21dma again today, broke the last three days’ channel, and ran after-hour in the resistance area. This will be interesting to follow tomorrow.
(XME) Metals & Mining - 10dma bounce and higher low. Pushing to a new high.
(XRT) Retail - 10dma bounce and sitting at stage 1 base top level. It could be a breakout tomorrow.
(IGV) Software - Stage 1 base BORS today.
MARKET BREADTH & INTERNALS
$NYHL (Cumulative new 52W Highs/Lows & 50dma)
CROSSED the 50dma and confirmed a BULL market developing signal
LT_SIGNAL: uptrend (black) + ABOVE 50dma = BULL market developing (🟩)
!MCSUMNYA (McClellan summation index & 10dma)
MT_SIGNAL: uptrend (black) + ABOVE 10dma = UPTREND (🟩)
$NYMOT (McClellan Oscillator - Breadth extensions)
We made a lower high with yesterday’s breadth reversal. Will we make a higher low and wedge or confirm a breadth downtrend with a lower low?
NYHL (New 52W Highs/Lows) - Small decline, but holding.
NYAD (Net Adv/Decl) - Back slightly positive.
MMTH (Stocks > 200dma - LT breadth) - 10dma bounce, higher low just below 55.31$ base pivot.
MMFI (Stocks > 50dma - MT breadth) - Looking coiled and building higher lows just below that DTL. A breakout here would be a big breadth thrust & structure change.
MMTW (Stocks > 20dma - ST breadth) - Higher low and holding the overbought area.
VIX (Volatility S&P 500) - The VIX tried to spike today but quickly got rejected at the 21d and closed red right below all kma’s and inside that bear market base area. If we break that area tomorrow, you’ll see me get aggressive.
DXY/TNX (US$) - Very weak action and wedging down. It looks like the US$ could continue further down soon. It’s really good for the equity market.
ECONOMIC & EARNINGS CALENDAR
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
LEADERS LIST
Overall leaders (PRIME Score)
AEHR,NINE,FOUR,RCL,JXN,VAL,H,LSCC,MELI,PR,PARR,ARRY,TGTX,ALGM,CSIQ,CCL,BAND,OII,SHLS,IGT,
Fundamental leaders (FA Score)
NOG,FRO,CALM,PR,ESTE,LTHM,CPE,RUN,AEHR,HGV,TRIP,GFS,JXN,LBRT,DVAX,CEIX,DK,LNTH,ABNB,PBF,
Technical leaders (TA Score)
TGTX,AEHR,RMBS,OII,LSCC,MELI,NINE,ALGM,CLF,RCL,CSIQ,ARRY,FOUR,VAL,CCL,BAND,H,PARR,SHLS,IGT,
Relative Strength 1 Month (1M-RS)
AEHR,TGTX,MELI,CNK,LTHM,BTTR,CCL,CLVT,CHPT,EXPE,DKNG,PR,TSLA,UAL,RMBS,BLNK,CPE,TRIP,RCL,ONON,
Relative Strength 3 Month (3M-RS)
NINE,TGTX,BAND,OII,AEHR,RMBS,LSCC,ALGM,CLF,ARRY,CSIQ,CPRI,KLAC,FOUR,IGT,SPR,WMG,NLY,MELI,TOL,
Relative Strength 6 Month (6M-RS)
NINE,TGTX,AEHR,OII,RMBS,BAND,ARRY,FOUR,RCL,ALGM,PARR,VAL,LSCC,JXN,SHLS,CPRX,IGT,MELI,PR,CLF,
REFERENCES
Articles on the system:
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Alex: Do you use Stop limit or Stop mkt? I am seeing lot of slippage on Mkt stops.