Alex's daily Market update & Focuslist report - 10/29
GDB closed at -456... as we closed last week on continued distribution while being extended & oversold - Now we have a big FOMC week!
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GENERAL MARKET ANALYSIS
S&P500 (ES_F)
ES failed to bounce off the 4161$ level on Friday, as we faded the open and closed to a new low.
The downtrend remains strong & well in place, so overhead levels continue to be considered overhead resistance for potential retest & rejection until we reclaim one of those key level/area AND hold it on a retest.
So I’ll look for that action around the $ 4161$ & and $ 4211$ levels for clues of the downtrend being still strong or if buying pressure is coming in.
We are still below all kma’s and continue to sell off on heavy distribution, so defense is fundamental right here & now. We never know how fast & hard we can continue lower…even if the market is oversold & extended.
I’ll watch these levels as potential resistance for retest & rejection. If we reclaim those, it would be seen as constructive.
4161$
4211$
4235$ (Oct. low)
4264$
4308$
4337$
I’ll watch these levels as potential support if we follow through lower (or retest & go):
4076$ (The same area as the measured move from Aug. top.)
4030$
NASDAQ (NQ_F)
RUSSELL 2K (RTY_F)
PrimeTrading Market Model #PTMM
GDB closed at -456... as we closed last week on continued distribution
Price new low & below all kma's
Downside momentum was strong
NNL back to lows
The market closed the week very weak, and extreme bearish action & weakness continued.
Just everything is down, extended, and extreme…
This market will eventually snap back…only when we see a big & impressive breadth thrust on a reversal will we have something to discuss.
Until then, the trend is down, and there is not much to do right here & now if you are a long-only trader than waiting on the sidelines.
No need to play hero in this type of high-velocity downtrend. Trying to pick a bottom is a sure way to get killed...confirmation is worth a lot of $$$.
PTMM is still at a RED market signal (🟥)
Action/Rules:
SHORT trades allowed
1/2 positions only (10%)
Trimming 1/3 at 1R & 2R
Keeping 1/3 as a runner position
New open risk > 0% (meaning all new exposure is financed and paid for with trims)
Internals
MMFD (Stocks > 5dma - market extension)
Still low/mid-range… there is still room ST
MMTW (Stocks > 20dma - market extension)
We’re still at that Aug./Sept structure level, which is still holding. A break here would probably mean a melt-down, while support & bounce could spark a tradable rally.
MMFI (Stocks > 50dma - market extension)
We are still in that higher-low area. So I'm still on watch for a reversal if confirmed by price.
A scenario like in June & Oct. 2022 is possible here, where we make a slightly higher low. I’m watching that potential scenario closely.
REclaimed and closed above 20.48$ on Friday. We remain elevated, above all kma’s…but still below last Monday’s high.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
Still above all kma’s and wedging.
10Y Bond Yields (daily)
The uptrend continues above all kma’s.
US dollar index (DXY)
Wedge structure breakout from the base area retest…this is not good. RED FLAG
We reclaimed the range level on Friday, which is not what I wanted to see. If we spike from here, it’s a big red flag.
BTC/USD (Bitcoin)
Still holding that breakout, this is constructive while kma’s are catching up and we digest the recent move.
SECTORS & THEMES ANALYSIS
Only mega-cap closed green and "held" indices on Friday
Rough day for Energy & Utilities
Miners, Shippers, strong day
AIQ & SMH did well and stood out
LEADERS (TOP10 - Overall/Weekly/Monthly/52w low/52w high)
Big jump for GDX
SMH & IGV are holding well, with Energy taking a beat
10 leading themes charts (w/ pivots):
1 Gold Miners GDX
2 Semiconductors SMH
3 Software IGV
4 Junior Gold Miners GDXJ
5 Blockchain Technology BLOK
6 Oil & Gas Equip. & Services PXJ
7 Natural Gas Producers FCG
8 Artificial Intelligence & Technology AIQ
9 Internet PNQI
10 Oil & Gas Exploration & Production PXE
FOCUSLIST
LONG FOCUSLIST
PTMM = RED = NO long FL
SHORT FOCUSLIST (simplified)
Market ST extended and is not a good R: R spot to initiate new shorts, but the trend remains down, and we don’t know how far we can go. If we get a gap & fade, or 1-2 days bounce into FOMC, that’s the names I will watch so far. I might not even open any, but I want to be ready if selling continues. If I do sell, it will be one name at a time, and I will want to de-risk the trade very quickly at 1 & 2R to carry that risk overnight. (day trades with small runner)
DRI daily/130m - DARDEN RESTAURANTS, INC.
SPB daily/130m - SPECTRUM BRANDS HOLDINGS, INC.
ASAN daily/130m - ASANA, INC.
LVS daily/130m - LAS VEGAS SANDS CORP.
AI daily/130m - C3.AI, INC.
LEADERS LIST
Overall leaders (PRIME Score)
ANF,PDD,RELY,VST,VRT,NU,X,FTAI,DELL,AEO,CRWD,TDS,ESTC,SFM,DLR,COUR,APP,NRG,HCC,STX,
Fundamental leaders (FA Score)
NVDA,INDI,NU,TMDX,META,SDRL,LVS,RBA,PODD,DLO,DUOL,NCLH,CCL,PANW,MLCO,TDW,DLR,FSLR,EXTR,EURN,
Technical leaders (TA Score)
ANF,FRO,RELY,TDS,VRT,PDD,ESTE,CEIX,X,LPG,FTI,PR,LBRT,AEO,INSW,DELL,CPRI,APP,FTAI,VST,
Relative Strength 1 Month (1M-RS)
BTTR,SPR,MSTR,CUBI,EGO,FRO,APLS,PI,DG,NFLX,LPG,VSCO,KSS,NEP,AR,SWN,NU,PLNT,WWW,SBH,
Relative Strength 3 Month (3M-RS)
TDS,APLS,ANF,FRO,CEIX,VRT,RELY,CPRI,X,ESTE,PR,STNG,DELL,AEO,LBRT,INSW,HRB,PDD,DHT,EURN,
Relative Strength 6 Month (6M-RS)
CVNA,IMGN,ANF,VRT,SMCI,APP,TDS,PLTR,CUBI,CEIX,ETRN,AFRM,ZS,CELH,BBIO,FRO,PDD,LPG,ESTE,FTI,
SCANS
Stocks > 50dma & +/- 3% from 21dma #scan (potential 21dma PB LONG setups) 🐂
ANF DELL AEO OLLI URBN LULU INTC BJ FIVE
Stocks < 50dma & +/- 3% from 21dma #scan (potential 21dma PB SHORT setups) 🐻
DLR FUTU CNM SPB RHI CALM JNPR TXRH PHM DRI UHS SWK SCCO OZK CPB ASAN PVH ADC ASB KBH LVS ULTA BOX AI TGT UGI FHN
Alex’s TAKEAWAYS & GAMEPLAN
I want to throw a little beacon of hope before the week begins...
The last few weeks have not been easy for sure, and I know that a down-trending market can be hard on the psyche & motivation.
The good is, we're ON THE RIGHT SIDE, and while some see their EC going down by 5-10-20% off their highs, we are holding and even rising. That's a BIG positive for when the market turns.
A correction does not go on forever, and each day that passes is getting us closer & closer to either a big rally or the start of a bull market. That is FREAKING EXCITING.
Keep in mind that we have the tools to give us the go, and I don't know when exactly, but we'll see PTMM go all green, and we're all going to enjoy trading long & making money together.
Stay focused, stay positive... bright days are coming, my friends.
The market is still in a solid downtrend, below all kma’s. We certainly are oversold & extended, so I think we’re back in no man’s land, as this is getting late for shorting (lack of setups & ST market extension). We don’t have the high-probability environment I’m looking for to engage on the long side.
Until we see another bounced attempt and internals improving A LOT…this market remains bearish and rallies as short opportunities.
Make no mistake, when the market will turn, AND IT WILL TURN... we have the tools with #PTMM to give us the GO to engage back long in the market.
Important economic news/events (weekly)
GAME PLAN:
PTMM = RED = SHORT OR CASH
I only trade 1/2 positions (10%)
I trim quickly 1/3 at 1R & 2R into strength
I want to be either close to zero (>-0.25%) or positive on my new exposure risk (NOR) by EOD.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
REFERENCES
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