Good evening folks, here’s another daily Market Update & Focuslist!
General market Review that includes my Bullish & Bearish scenarios
Market Breadth & Internals
Economic Calendar
Sectors Review
Leaders list
My own Portfolio update
My own daily Focuslist including setups, alert levels & explanation
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MARKET REVIEW
Russel 2K (RTY) Daily:
Russel 2K (RTY) Intraday:
Pretty wild day last Friday as we opened quite strong and tried to breakout from both the DTL from the recent mini-channel and the 1846$ level as well. The selling started right as were above that level and we rolled over very fast and eventually came right down to retest the 1800$ level.
We are still in quite an oversold condition right now, but the market is proving to us that the downtrend is very strong so far as every bounce attempt is being hit with large selling.
Still, a wait & see situation for me here as we’re still below all kma’s.
What are the levels I’m watching on RUSSEL tomorrow?
On the upside (bullish scenario)
IF - We get a reclaim of the 1846$ pivot and a close above the 5dma.
THEN - Increase long exposure by respecting our progressive exposure rules and using entry pivot from the FL.
On the downside (bearish scenario)
IF - We break below the 1800$ level
THEN - Close all long exposure and stay on the sideline as the market is already in oversold conditions. No time to go short either.
MARKET BREADTH & INTERNALS
NYHL (New 52W Highs - Lows) - NNH improved Friday with a close @ -83.
NYAD (Net Adv/Decl) - Net Declines decelerated Friday with a -489 read.
MMFI (Stocks > 50dma) - Tried to bounced from that potential support area only to be rejected at the overhead resistance and 5dma.
MMTW (Stocks > 20dma) - On the shorter-term breadth indicator we are right at the oversold 15% area I talked about for a few days now. This is where reversal/bounce happens. Keep in mind again that we could stay oversold for a few days, but at some point, we’ll see some upside. (sustained or not, idk yet…)
MCOSINYA (McClellan Oscillator) - McClellan is still oversold, but we saw an improved reading for the first time in the last 6 trading days.
VIX - VIX tried to break down but quickly found support at the 24.33$ level and the 50dma. This is quite a failed recent consolidation area breakout. We’ll have to see this week which way we resume that action.
CPCE (PUT/CALL EQUITY RATIO) - We are quite high on P/C ratio, but we are now at capitulation/extreme level either. We normally want to see a spike above 1.0 to consider it to be a real capitulation low.
DXY (US $) - US$ failed to breakout from the recent swing high which was the base breakout itself.
US10Y (US 10Y bond yield) - Still above 3.20% level and the 5dma. ST uptrend still strong.
IEI/HYG (Credit Spread) - Credit Spread gapped down Friday but found good support at the 10dma to finally close green on the day. That’s a big reversal day, just like the VIX.
BTC/USD (Bitcoin) - Bitcoin is making interesting action here with testing back the recent wedge DTL right at the support area that we were not able to breakdown. If we get a breakout of that DTL, we could see some ST upside move.
CL_F (Crude Oil) - Tried to bounced from the lows Friday but was not able to go far and got rejected at the 5dma. Futures show some bounce again, but the week is still early.
NCF_F (Coal futures) - Futures open with a +5.25% move out of the multi-month base area @ 457.80$. Breakout confirmed... watch coal names run tomorrow. (2 in the Focuslist)
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
Leading sectors:
(TAN) Solar - Was not able to reclaim that 83.30$ pivot and got rejected by the 10/21dma as well. We barely closed above the 50dma.
(XBI) Biotech - Biotech tried to bounced Friday from the 50dma, but we rejected the 21/10dma to finally close right below the 50dma.
(XLE) Energy - Probably the best action last Friday as we gapped up and were able to close above the 21dma.
(PBW) Clean Energy - Tried to bounce from the 50dma but was not able to close above it. Not the best action here.
On watch sectors:
(SMH) Semis - Tried to bounced from oversold move, but got rejected at the 5dma. We need to hold that last potential support area from the inversed H&S back in June/July price action.
(IGV) Software - Tried to bounced from oversold move, but got rejected at the 5dma.
(XLF) Financial - Tried to bounced from the stage 1 support area, but got rejected hard by the 50dma & kma’s.
(FDN) Internet - Tried to reclaim the stage 1 base breakout area, but got rejected at it and also by the UTL.
(XME) Metals & Mining - Tried to bounced from the stage 1 support area, but got rejected hard by the 50dma & kma’s.
(XRT) Retail - Tried to reclaim the stage 1 base breakout area, but got rejected at it and also by the UTL.
Alex’s TAKEAWAYS:
As we continue to see oversold conditions for the last few days,the price action on the indices still showing very strong downtrend action. We have to respect the current market and trend and keep ourselves out of a very choppy and high failure rate type of trading environment.
We’ll need more confirmation of a trend change before getting really engaged in this market. Now is not the time, but let’s stay engaged and ready to pull the trigger when our BULLISH scenario materialize.
DEFENSE, BUT STAY POSITIVE & OPEN🛡️
LEADERS LIST
Overall leaders (PRIME Score)
SWAV,CEIX,CPRX,MRSN,INSW,XMTR,PAYO,PDD,YPF,EURN,PRTY,PRVA,CSIQ,STNG,CALM,LTHM,DHT,ARLP,HRB,STEM,
Fundamental leaders (FA Score)
RES,AMR,HCC,DK,MRO,ERF,DVAX,MGM,DRH,TELL,LBRT,BHF,ENLC,SWAV,LC,TRGP,SLDP,WTI,MPC,FANG,
Technical leaders (TA Score)
MRSN,CPRX,SWAV,PDD,CEIX,XMTR,PAYO,INSW,YPF,CSIQ,PRTY,PRVA,EURN,STNG,DHT,HRB,ARRY,NLSN,DCPH,RXRX,
Relative Strength 1 Month (1M-RS)
MRSN,YPF,PRTY,TELL,SWAV,WTI,CPRX,XMTR,WFRD,PAYO,LAZR,TGTX,INSW,RXRX,BFLY,LTHM,PDD,KPTI,PDCE,JXN,
Relative Strength 3 Month (3M-RS)
MRSN,APDN,TH,CPRX,SWAV,ARRY,BFLY,PRVA,STEM,AHT,XMTR,TGTX,AGEN,PRTY,HIMS,DCPH,WOLF,ELF,PLUG,AEHR,
Relative Strength 6 Month (6M-RS)
TH,DCPH,ARRY,MRSN,SIGA,STNG,CPRX,CEIX,STKL,SWAV,STEM,CVI,CRK,ENPH,CELH,PDD,PRVA,HRB,ARLP,PAYO,
PT PORTFOLIO UPDATE
Recent operations:
Opened XMTR right at the entry pivot, and trimmed 50% EOD as we were heading into a long weekend and the market is not showing healthy conditions right now.
Position management GAMEPLAN:
Maximum new exposure: 0% (except if bullish scenario trigger - then max 20% total)
Position size: 1/2 positions max (10% of equity)
Position management
First trim: sell 50% initial position
Trim @ first day EOD
SL moved @ breakeven
2nd trim: sell 25% initial position - 10dma EOD break
3rd trim: sell 25% initial position - 21dma EOD break
Scale-out approach
Alex’s FOCUSLIST
INDI 0.00%↑ 🎖️
A semi-name with a stage 1 base breakout following earnings. Considering the sector weakness it’s a clear RS sign IMO. There is also a big accumulation that took place in that base recently. (high buying volume) I would play today’s high pivot as an entry to play the breakout itself.
UPDATE: One of the strongest name on my FL last Friday as we stayed above the stage 1 base breakout area and even above the 5dma.
Alert - 8.53$
Biotech name that is setting up for a continuation base breakout after an initial 50% push in 2 days following the last ER. Never really got below the 10dma
UPDATE: Failed breakout Friday as we came back in, but we are still above the 10dma and that failed b/o was on low relative volume.
Alert - 8.02$
Just found good support at the 21dma and most recent swing low as well. I like how that pullback was very tight in price and also the volume declined all the way. Might need a couple more days to consolidate below the pivot, but could also rip straight higher as this has been a recent leading name.
UPDATE: Gapped up right out of the wedge Friday morning only to came right back in like the whole Biotech sector. We are still above the 21dma and we were on lower volume than average too.
Alert - 14.24$
20% PEG play that consolidated the right way at the 21dma making higher lows before kinda breaking out of the DTL today, but now very clean. I’ll use the most recent swing high (yesterday) as a pivot entry.
UPDATE: Also tried to breakout but failed due to the general market, still very strong above the 5/10dma and we saw good volume coming on the breakout as well.
Alert - 6.84$
CEIX 0.00%↑ 🎖️
As I highlighted the Coal futures multi-month base breakout higher in the letter, I will have my eyes on these coal names tomorrow as they might run hard on that underlying commodity move.
CEIX already was setting up well with a BO21PB setup with higher lows in the most recent action off the 21dma and above recent base breakout area.
Alert - 73.00$
Another high potential coal play setting up a bit lower at the 50dma, but the overall larger channel break on that last rally that we just retested with this pullback. I really like the reversal of Friday as we clearly rejected both the last swing inside the channel, but also the 50dma.
Alert - 24.95$
AHT 0.00%↑ 🎖️
Big 120% run from the lows in the last rally, and we just built a nice BORL setup with the retest of the previous base breakout area and the 2 higher lows right at the 50dma. I like this recent action and volume profile on that pullback.
Alert - 9.93$
🎖️ = Alex’s highest conviction setups
REFERENCES
Articles on the system:
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