Alex's daily Market update & Focuslist - 01/18
Bounce attempt! Can we follow through?
Good evening!
After six red days for the broad market, we finally saw buyers attempting to regain control today.
We have our bounce attempt, with the 5 & 10-day momentum ratio hooking up, while ST_breadth (stocks > 5&20) also shows the same hook-up from the oversold area.
This is the first step and what I was trying to position for, but now we’ll have to see a good follow-through and positive momentum pick up along some breadth thrust characteristics to confirm the potential rally attempt.
While the broad market is trying to bounce, the Nasdaq broke out from its base, and the semiconductors & software groups made a new 52w high, showing clear leadership in the tech space (mainly mega/large cap).
It’s hard to be bearish with that look & pieces of evidence, but we’ll take it day by day.
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 + Takeaways
PTMM is on a RED market signal (🟥)
Key Takeaways:
5-day & 10-day hooked up,
bounce in NNH (that never went negative but close)
MT_momo getting oversold
price pullback looks like a measured move. Still below 21dma.
MCSI is still not hooked up, so we need more confirmation tomorrow.
Tomorrow, we need to follow through and confirm that bounce ATTEMPT. I want to see GDB > 500 with momentum being high.
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GENERAL MARKET ANALYSIS
S&P500 (ES_F)
Still inside our 4830/4767$ range, but I like how we build pressure and tight action below the highs. With NQ breakout today, is ES the next to follow tomorrow?
Daily, we still have our two very key pivots to work with:
4830$ for a new high and continuation of the uptrend
4767$ breakdown for a rollover and potential 2nd leg down of that pullback.
These two levels will be my barometer for the ST direction of the market.
NASDAQ (NQ_F)
Breakout above 17073$ on NQ today. We wanted to see this…but now we need to follow through and see buyers come in tomorrow.
It's hard to be bearish with that daily/weekly NQ chart.
RUSSELL 2K (RTY_F)
We made a higher low and potential bounce attempts today. We are still below the 21dma, so I’m watching closely how we react to those levels if we continue higher tomorrow. We need to push and reclaim those kma’s.
Lagging group, but might be a good catch-up move if we do rally.
Market Internals
Market Breadth & Extension (Stocks > 5, 20,50 & 200dma - short to long term view)
ST breadth hooked up from oversold, both the 5 & 20. That's confirming the bounce ATTEMPT.
MT/LT breadth still elevated & extended
Rejected at the 14.49$ pivot with a lower high today. That’s what we wanted to see.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
Downtrend.
10Y Bond Yields (daily)
US dollar index (DXY)
LL & LH from yesterday.
Still below all kma’s and potential tight channel breakdown today - no red flag…and a pretty good risk-on signal.
BTC/USD (Bitcoin)
Breakdown from the UTL structure. 38k retest is possible.
SECTORS & THEMES ANALYSIS
Mega/Large again today, but strong bounce in Mid/Small to close green
Micro & ARKK still lagging
Strong day again for tech, leading.
Gaming, Airlines (turnaround?), and Semis were top themes today
Leading themes charts (rank sorted):
1 Uranium URA
higher low at the 8dma
2 Semiconductors SMH
Boom, powerful breakout to new high
3 Software IGV
It's the next best sector to watch behind semis with that base breakout today.
4 Cybersecurity CIBR
Base level bounce.
5 Cloud Computing SKYY
Sitting just below the base level, can we breakout?
6 Homebuilders XHB
Bounce off the 21dma today and looking great for a potential breakout tomorrow.
7 Internet PNQI
8 Artificial Intelligence & Technology AIQ
9 Insurance KIE
10 Property & Casualty Insurance KBWP
Sectors & Themes ideas (weekly):
From the weekly charts, we might see a big week for Tech. Cyber, Software, Cloud, Semis, Internet, and potential continuation in Uranium, Gaming/Sports & insurance.
CNCR/Biotech seems tired & extended.
That's the charts we want to see with key & strong 10wma bounce in tech last week.
FOCUSLIST
MNDY daily/W/65m - MONDAY.COM LTD - Alert: 195.14, SL: 186.1
Still valid setup from last night FL. Another higher low above all kma's today and tried to breakout from channel DTL EOD. That's a big base.
BLDR daily/W/65m - BUILDERS FIRSTSOURCE, INC. - Alert: 166.01, SL: 162.13
Still valid setup from last night FL as well. Still in that tight daily wedge, but we broke out of the 65m intraday DTL and we retested it before closing strong.
FSLY daily/W/65m - FASTLY, INC. - Alert: 17.95, SL: 16.93
Still valid setup from last night FL. We are still inside that daily DTL and trading around tight kma's, but today was a higher low and breakout attempt with a strong close
.
RPD daily/W/65m - RAPID7, INC. - Alert: 55.17, SL: 54.01
Security name retesting and made higher low right at the stage 1 base level. Love that name for potentially a big base breakout & retest setup.
FIVN daily/W/65m - FIVE9, INC. - Alert: 76.51, SL: 72.96
Still digesting the last EP below that daily DTL and just made higher low structure right at the 50dma. We're getting tight on the right side, and could give a good momentum breakout above that DTL & 76.51 pivot.
SCANS
21dma pullback scan
SNAP CBAY DBRG CCL CUK BBWI CLDX CLS JWN SIRI TDW TRIP TMDX
50dma pullback scan
EAT HIMS SPR XPO LYFT FIVN
Pullback-tight scan
CTLT TEAM BBWI SIRI TRIP SWTX
Continuation breakout scan
None
Bigger the base, higher in space scan
DBRG NXT FSLY
PORTFOLIO UPDATE
Stopped on INSM
FSLY held & a good close
New position in BLDR
Overall, almost everything held again today, with hammer near SL for PGNY & LLY. Now that we see sign of hook up & potential bounce attempt, I'll be way more patient with my trading and will let my PF work until we get into ST overbought condition.
Trying to position in the last 2-3 days was a mess, but now the sit-out part starts for me if we can confirm the follow-through.
INTRADAY/CLOSED TRADES:
Important economic news/events (weekly)
REFERENCES
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