Alex's daily Market update & Focuslist - 05/29
Debt celling deal....how will the market react?!
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GENERAL MARKET ANALYSIS
NASDAQ (NQ_F) Daily
Price Action Analysis:
NQ continued its power uptrend and pushed to a new 52w high last Friday. We are now 8.5% above the 50dma, so definitely ST extended.
On rare occasions out of bear markets, we could see a 10-15% extension, so it’s not a sell signal but rather a sign to be cautious with Tech exposure.
We remain in an uptrend, above all kma’s.
RUSSELL 2K growth (IWO) Daily
Price Action Analysis:
As highlighted last week, IWO was in a critical area. We did bounce from the 10/21c + 72/89c and reclaimed all kma’s with a nice bounce above the range area.
We are still in the larger range area as we did not reclaim the 228.49$ pivot. To confirm a continuation of this bounce, we’ll want to see a follow-through push and reclaim of that range level.
I like the setup going into this week, and I think there is a reasonable probability we could see a breakout this week. TBC!
S&P500 (ES_F) Daily
Price Action Analysis:
Also, decisive action on ES last Friday as we reclaimed the 4200$ critical level and would confirm the stage 1 base breakout if we can follow through on that breakout this week.
That is a very constructive action.
PT_UL BREADTH & INTERNALS
Price closed ABOVE all kma’s.
Breadth was positive with a very high UP volume, but participation was pretty narrow at 34% UP day only.
MSCI was unable to flip UP. We’ll need broader participation.
4.4x daily momentum. (good)
NNH at +8 (9th in a row)
The market model is now on an ORANGE signal (🟧)
Bottomline: The market continues to be strong, mainly due to AI & tech stocks. Ideally, we would see a larger participation next week.
Internals
Bearish outside reversal and closed below the 10/21c. This is constructive and what we wanted to see on Friday.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
Volatility in the Bond market continue to grind higher.
The uptrend is still strong and above all kma’s.
UTL & 72/89c breakdown on Friday. This is precisely what we want to see.
The uptrend remains strong.
BTC/USD (Bitcoin)
BTC with a nice push from the consolidation & 72/89c this weekend on the debt ceiling news. We are now getting some resistance at the H-AVWAP; it seems like a normal reaction so far.
SECTORS ANALYSIS
1M & 5D Relative Strength (SPY) sectors performance:
Leading sectors:
SMH Semiconductors: ST extended - will look for PB & kma’s to catch up
XLK Technology: ST extended - will look for PB & kma’s to catch up
IGV Software: ST extended - look for a retest of the previous swing high pivot.
CIBR Cybersecurity: Big base breakout on Friday - we could see a follow-through, but a retest of the base area would be healthy too.
FDN Internet: Just broke out of previous swing high pivot, but right into 52w high level. It could see resistance here.
Sectors potential playable setups :
ITB Home Builders: Recent leader that pulled back right at the recent base area. We are building a higher low that could lead to a bounce and trend resumption.
TAN Solar: On watch for me this week as we're building that tight wedge at the 10/21c and Low & gap AVWAP pinch just below the ST DTL
XBI Biotech: Recent leader that consolidates the recent move and now retesting the breakout AVWAP & 72/89c. On watch but need to tighten more in the next few days.
XLY Consumer discretionary: Base retest and bounced on Friday. (BORS). One sector to watch going forward.
ROBO Robotics & Automation: 15 weeks breakout. If we follow through, one sector to watch.
Lagging sectors :
GDX Gold miners: Solid downtrend below all kma’s.
XLE Energy: Still downtrend, but showing some RS recently at the LT DTL.
XME Metals & Mining: Solid downtrend below all kma’s.
XLV Healthcare: Solid downtrend below all kma’s.
XRT Retail: Possible U&R setup
FOCUS & LEADERS LIST
SWAV (BO21PB) - Alert: 284.62, SL: 270.07 / LOD
66% init leg and now consolidating at the squeezed 10/21c. Volume very low and building higher lows.
SEDG (WB) - Alert: 297.57, SL: 284.03 / LOD
The TAN sector is on the watch for me this week as we're building that tight wedge at the 10/21c and Low & gap AVWAP pinch just below the ST DTL. Two names are on my radar to play that potential breakout in TAN.
SEDG is still in the larger Wedge, so it's an anticipation entry off the AVWAP pinch and DTL breakout.
LTH (BO21PB) - Alert: 20.6, SL: 19.57 / LOD
Probably my top idea for tomorrow as we formed a four weeks tight consolidation at the 10/21c and base area after a 50% initial move. We also reclaimed both High & PEG AVWAP on Friday.
DUOL (BORL) - Alert: 149.98, SL: 142.38 / LOD
Software name (leading sector) that is still consolidating following the recent earnings gap. We are forming higher lows at the 10/21c and reclaimed High & PEG AVWAP on Friday’s bounce.
BILL (BO10PB) - Alert: 99.89, SL: 94.26 / LOD
PEG setup as we are building just below the PEG high pivot and higher lows at the 10dma.
SHOP (BO21PB) - Alert: 59.84, SL: 57.43 / LOD
Also top idea for tomorrow, as we are still consolidating after the initial 41% earnings run. We found support at the 21dma and need to reclaim the recent swing high pivot and both high & peg AVWAP before momentum could pick up.
PGTI (WB) - Alert: 26.18, SL: 25.46 / LOD
WB right at the squeezed 10/21c. It has been holding very well during ITB PB, which is exactly retesting the recent base area, so there is a potential bounce in the sector. PGTI is then a leading name that could work nicely as the ITB sector resumes the uptrend. It was a leading sector not too long ago
EXAS (BO10PB) - Alert: 82.81, SL: 80.31 / LOD
PEG setup building nicely with higher lows at the 10dma.
ARRY (WBPB) - Alert: 23.78, SL: 22.54 / LOD
It already broke out of that wedge (compared to SEDG) and was rejected on the initial reaction of the base area. We are now retesting the 10/21c on higher lows. I would look for the initial swing high pivot reclaims for an entry. It's leading SEDG so it could move fast with 6.37% ADR.
CRSP (BO10PB) - Alert: 65.5, SL: 62.16 / LOD
One of my top biotech idea that I’ve lost my position last week on that pullback. I will look to re-enter as we are building higher lows at 10/21c and with a good volume profile.
LEADERS LIST
Overall leaders (PRIME Score)
IMGN,AMAM,APP,DUOL,SDGR,ACVA,MAXN,MDB,EXAS,SHOP,ELF,ASAN,SWAV,CELH,NVDA,TGTX,PRG,HUBS,RMBS,APLS,
Fundamental leaders (FA Score)
RCL,ELF,NCLH,CELH,TMDX,DT,WNC,HTGC,SDGR,EXAS,CRSP,ALGM,ARRY,CSIQ,ALB,MGM,CALM,PANW,EQC,SEDG,
Technical leaders (TA Score)
IMGN,SMCI,AMAM,PLTR,APP,NVDA,SDGR,RMBS,DUOL,ASAN,ACVA,ELF,MDB,TGTX,EXAS,ACLS,MAXN,S,ENTG,HUBS,
Relative Strength 1 Month (1M-RS)
SMCI,PLTR,IMGN,RMBS,NVDA,ACLS,VRT,ENTG,SDGR,MCB,RNG,AMAM,NET,COHR,APP,ASAN,ZS,LMND,MPWR,AEHR,
Relative Strength 3 Month (3M-RS)
IMGN,SMCI,AMAM,APP,PLTR,TGTX,NVDA,SDGR,DUOL,MAXN,RMBS,SWAV,STNE,SHOP,ASAN,CELH,ACVA,ELF,MDB,PRG,
Relative Strength 6 Month (6M-RS)
AMAM,IMGN,SMCI,TGTX,NVDA,APP,PLTR,DUOL,SDGR,MAXN,RMBS,ACVA,SHOP,MDB,ELF,EXAS,PRG,ASAN,APLS,ACLS,
Alex’s TAKEAWAYS & GAMEPLAN
There is a lot to like in that market right now. We are mainly seeing a strong uptrend in Tech related stocks right now, but we are beginning to see signs of potential widening strength, along with a possible rotation into smaller caps and growth.
If this happens, we could have a strong window of opportunity. But first, we need to see how the market reacts to this debt ceiling deal!
Here are couples of things I’ll watch tomorrow:
The debt ceiling deal is done. How is the market react to the news?
Sell the news?
The market reacts positively, and we see a widening leadership to strengthen the uptrend.
NQ continues to fire up higher, lifted by AI & mega-caps.
ES reclaimed the 4200$ important level, but we need to follow through this time!
IWO bounces at kma’s, but still inside the range area. We need to breakout to confirm a potential uptrend in small-cap growth stocks.
Breadth remains strong but lacks follow-through in sectors outside Tech, mega-caps & AI. We need to see more consistent up-days & broader participation.
Internals (VIX/DXY/10Y/Credit Spreads) are throwing mixed signals, but VIX & Credit Spreads are showing very constructive action here.
Economic news/events:
GAME PLAN:
Exposure model = ORANGE signal (🟧)
Still only playing pilot positions until the market improves to a YELLOW or GREEN signal.
I’ll continue to follow my open heat & progressive exposure to dictate new positions.
Friday’s new position needs to work tomorrow to allow me new exposure. Otherwise, I might either re-allocate to new setups or only manage my current positions.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
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REFERENCES
Articles on the system:
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Love all your charts and tables. This is a great summary of things to be on the lookout for.
Great, user-friendly and relevant NL improvement!