Alex's daily Market update & Focuslist - 12/27
Last week of 2022...at last!!
Good evening folks!
I hope you are still enjoying good time in family. Trading is not a priority right now, but we must still make our homework and stay up to date ;)
Alex ✌️
GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Price Action Analysis:
/ES got rejected at the 10dma and 3898$ level pre-market and really sold off at the open before finding some support at the 3855$ level, where we closed.
We got rejected where I expected (10dma/3898). Still, on the other side, we failed to follow through on the downside as well… So I think we really have to be careful tomorrow if we see the market losing this 3855$ level and last Friday’s low pivot, as this would confirm the rejection of this morning.
I also begin to see a DTL forming from the recent consolidation highs, so if we breakout from that DTL and the 10dma, that would confirm the upside scenario IMO.
We are still below ALL KMA’S and in a downtrend, so be careful on the long side until we confirm an actual trend change, with AT LEAST a higher low on /ES.
On the upside,
The 3900$ level is now acting as resistance, along the DTL & 10dma.
On the downside,
I see the current consolidation UTL being an important level to watch tomorrow, along the Friday’s low that could confirm the downtrend continuation.
NASDAQ (NQ_F) Daily
RUSSELL 2K (RTY_F) Daily
Alex’s TAKEAWAYS
We are still below all kma’s and in price and breadth downtrend, no doubt about that. Despite that, I continue to see some interesting EARLY underneath action. But, for all the good action, we also see red flags and concerning things. Mixed bag & market without direction right now.
Energy, Metals, and Miners are setting up potential reversals backed by an increase in individual names setups.
McClellan summation index begins to round up, meaning the selling pressure is not sustained. A good thurst in breadth tomorrow could flip it up.
The VIX with a significant reversal at the 21dma, and rejected the recent consolidation area. This could be an excellent early clue.
This has been a while since I’ve had that many names in my long focuslist.
I also see some concerning action…
The 10Y yield is spiking.
SMH, TAN & XBI - 3 significant sectors are very weak and slicing through support like butter
ES_F got rejected at the 10dma & 3900$ today.
Breadth was not able to follow through today.
I got a lot of alerts from names in the FL today, but we saw a lot of fading action and weak action.
That said, we are still in a downtrend, and we have to respect the fact that this interesting action occurred on a low liquidity week, and things can change and get rejected very quickly. This is not a time to get aggressive, but it could be an early area to test potential leading stocks and see if things hold.
Market health & Trend indicators:
LT SIGNAL: downtrend (red) + BELOW 50dma = BEAR market (🟥)
MT SIGNAL: downtrend (red) + BELOW 10dma = Downtrend (🟥)
Tomorrow's economic news:
Gameplan:
I don’t plan to be really aggressive this week in general, but I do see early constructive signals to get me to test some long setups tomorrow.
I opened three positions today and don’t plan to make new buys tomorrow unless we really take decisive action and breakout that DTL/10dma on ES_F.
Progressive exposure and keeping position small are essential while anticipating a reversal in a downtrend.
If you can’t react quickly enough in case of a rollover, then it’s probably better to sit this one out until we get more confirmation.
In the following sections of tonight’s letter, I’ll cover essential parts of my daily routine & preparation for tomorrow’s trading session.
✅ 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)
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