Good evening folks!
I hope you had a fantastic Thanksgiving long weekend, but now it’s time to get back to work and get ready for a packed & important trading week!
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Alex ✌️
GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Friday, as expected, was a very, very low-volume & directionless short day. We retested to the tick the 4050$ Nov. 15th high pivot and closed pretty much unchanged.
Now that the volume will come back into the market this week, we’ll need to pay attention if we follow through on the past week's up trend or if this rally is faded.
We also have a packed week filled with important economic news every day, so that you can expect a volatile week.
On the upside, I want to see the 4050$ being reclaimed as a first step, then 4137$ is still my target if we do continue higher.
On the downside, I want to see 4016$ hold, but if we don’t, I would like to see the 10dma act as support again. We also have the recent lows UTL working higher that would get in the 10dma area tomorrow. Again, that 3964$ level HAS to hold if we want to keep the ST uptrend alive. Otherwise, I would consider a rollover or at least a more important PB.
NASDAQ (NQ_F) Daily
RUSSELL 2K (RTY_F) Daily
In the following sections of tonight’s letter, I’ll cover important parts of my daily routine & preparation for tomorrow’s trading session.
✅ My takeaways, including my trading gameplan for tomorrow
✅ My Portfolio update
✅ My daily Focuslist, including setups, alert levels & explanation
✅ Sectors Review
✅ Market Breadth & Internals
✅ Economic Calendar
✅ Prime Model spreadsheet (PT_database)
✅ Leaders list (technicals, fundamentals & potential TMLs)
Make sure to subscribe!
Alex’s TAKEAWAYS
We just had a low-volume week, so I want to see how we open the week before making up my mind about this market. I still see very positive signs underneath, but the trend can be reversed pretty quickly especially considering the multitude of economic news this week.
We also have Jerome Powell speaking on Wednesday, so we MIGHT have volatile & choppy action Monday & Tuesday as the market wait for the important head of the FED speech to pick a direction. Be careful not to get caught in overtrading & being chopped with repeated fake moves. When you get stopped from your first two/three attempts, it’s best to take a step back, consider that the market will be chopped, and stop fighting the bad tape.
Some observations:
The VIX just made a new cycle low, and Aug. 19/20$ low is within reaching distance.
DXY & the 10Y are still below all kma’s.
XLE, SMH, and TAN are the leading sectors and shaping up for breakouts
Many other sectors just bounced and are showing constructive action. XBI, IGV, XLV, etc.
Breadth: Stocks > 200 just broke the recent range pivot high and are now above Aug. highs.
NNH & A/D is also showing constructive action
My current open positions are working, and we are seeing more & more base breakouts holding up and following through.
Although I see all these positive things, I always keep ready for both scenarios, especially with Jerome Powell's speech on Wednesday.
Gameplan:
My game plan this week will still be the same as the past two weeks. I want to push & be more aggressive intraday (40-80% exposure) but reduce exposure overnight to limit my risk of getting caught in a pre-market rollover induced by economic news.
I will probably keep my overnight exposure at no more than 20-30%.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
LONG FOCUSLIST
PCG 15.43, STNG 53.25, WFRD 43.72, ENPH 324.84, VCYT DTL+26.97, LABU 7.15,
PCG🎖️
Still basing after the initial 25% leg. We are contracting in both price & volume and we just reclaimed the 15.03$ level after retesting the area & the 10dma on Wed. I like how this setup could also be seen as a WBPB following the recent wedge breakout and the CLEAR VCP (Volatility contraction pattern) characteristics.
UPDATE: We had a nice follow-through last Friday, but We did not trig the entry pivot.
ALERT: 15.43$
STOP LOSS: 14.84$ / LOD
STNG
Shipping name with a very positive staircase price action in the past few months. This was one of the leaders in Oct./Nov. and went sideways since then. We just had a very nice base & 21dma retest last Friday, and that bounce showed that area being defended. Range high pivot as the entry.
ALERT: 53.25$
STOP LOSS: 49.61$ / LOD
WFRD
Still basing after t
ALERT: 43.72$
STOP LOSS: 41.27$ / LOD
ENPH
Still basing
ALERT: 324.84$
STOP LOSS: 297.05$ / LOD
VCYT🎖️
Still basing
ALERT: DTL + 26.97$
STOP LOSS: 25.47$ / LOD
LABU
Still basing aft
ALERT: 7.15$
STOP LOSS: 6.31$ / LOD
🎖️ = Alex’s highest conviction setups
IMPORTANT NOTE:
I have the discipline to build a detailed FocusList each night, but I want to emphasize that I DON’T take all the trades that would trigger their entry. Some reasons to take a specific position over another or not take any trade, even if the alert is activated, are:
The general market price action
My Market-Based exposure model
My Portfolio-based exposure model (progressive exposure)
A high-conviction setup
Price action around the entry pivot
STOP LOSS:
Recent swing low pivot
For less active trading, you can use the recent swing low pivot as a good structure level to place your SL, but consider that the distance with the entry is larger, and you need to adjust your position size to keep the trade risk as a % of your portfolio ideally below 0.5%
LOD (Low Of Day)
I like to use the LOD of the day I enter the trade. This way, I can use a larger position for the same trade risk as a % of my portfolio. BUT requires more active trade management and expects to be taken out more often (lower hit rate).
Then even if I take a trade at the entry pivot, I will very often sell it right away if the market roll over or the stock is backing out of the gate. I prefer to re-enter on the entry pivot reclaim than to be stuck with a larger loss. Please study all my education articles closely to learn how I handle trades around these entry pivots.
SHORT FOCUSLIST
SECTORS PERFORMANCE
Leading sectors:
(XLE) Energy - continue to build & consolidate right at the base top area and above all kma’s. Nice action, and no sign of breaking down yet.
(SMH) Semiconductors - Leading sector. It was not able to follow through Friday, but still basing nicely and working that wedge above all kma’s.
(TAN) Solar - Leading sector. It tried to push Friday, but the volume was not there. Still above all kma’s.
On watch:
(XBI) Biotech - Showing more & more constructive action again with almost an inside day Friday right at the kma’s and below the 81.75$ pivot. I will watch LABU in the Focuslist tomorrow in case this breakout.
(IGV) Software - Was not able to push Friday, but considering the small day & low volume in the general market, we’ll have to see this week if we can follow through on that base area reclaim.
MARKET BREADTH & INTERNALS (RISK MODEL)
NYHL (New 52W Highs - Lows) - oscillating around with a positive reading today.
Trend @ -23 (⬆️)
The market is still improving under the surface, but we don't have are far from having a "strong" market, and that's why we are not overwhelmed by long setups and are fully invested. We have NNH right now, but it's nothing compared to a good market, as you can see in 2020/21
NYAD (Net Adv/Decl) - Staying positive and trend back up.
20dma @ +304 (⬆️)
MMTH (Stocks > 200dma - LT breadth) - Following-through
MMFI (Stocks > 50dma - MT breadth) - Following-through, but still below recent swing high.
MMTW (Stocks > 20dma - ST breadth) - Bounce at the 21dma, but still in the larger wedge.
VIX (Volatility S&P 500) - VIX continues to trend lower and now getting a bit stretched with Wednesday's move & Friday’s inside day. I am watching the 18.70/19.70$ area as a potential big support area that COULD coincide with a reversal in the general market. We could also see some basing action, like in Aug., before a reversal. We’ll follow that closely in the next few days.
DXY (US $) - Bounced from the support area but could not close strong.
US10Y/TNX (US 10Y bond yield) - Bounced from the recent swing low but could not close strong.
ECONOMIC & EARNINGS CALENDAR
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
LEADERS LIST
Overall leaders (PRIME Score)
AEHR,ASC,SMCI,CHGG,ELF,TNK,RCL,GPS,CCRN,STNG,YPF,SHLS,INSW,CPRX,HLIT,GMAB,IGT,PSX,DHT,ALGM,
Fundamental leaders (FA Score)
RES,SIGA,NOG,PSX,ASC,PR,DRH,TNK,ESTE,LTHM,CPE,CALM,PDCE,SWAV,RUN,MUR,HGV,SM,TRIP,ERF,
Technical leaders (TA Score)
AEHR,GPS,SMCI,CHGG,ELF,ASC,AEO,SHLS,CCRN,RCL,CPRX,ALGM,YPF,AER,HLIT,VCYT,GMAB,TGTX,TNK,IGT,
Relative Strength 1 Month (1M-RS)
AEO,SHLS,ARRY,CERT,GPS,HIMS,BAND,AEHR,SMCI,RUN,SPWR,TGTX,CELH,CNK,LSCC,PRM,ALGM,CPRX,JD,ACMR,
Relative Strength 3 Month (3M-RS)
AEHR,ASC,WFRD,GPS,BIIB,INSW,ELF,YPF,CHGG,RCL,CCRN,CHX,TNK,SMCI,DNUT,AEO,XPRO,BHC,NAT,HLIT,
Relative Strength 6 Month (6M-RS)
AEHR,ELF,ASC,INSW,CPRX,CCRN,YPF,SMCI,SHLS,BIIB,CHGG,GPS,WFRD,ARRY,DHT,TNK,NAT,TH,STNG,HLIT,
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REFERENCES
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