Alex's daily Market update & Focuslist report - 11/01
GDB closed at +7 after turning up from a -400 intraday reading. The FOMC reaction was good, but we missed time to push into positive territory.
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GENERAL MARKET ANALYSIS
S&P500 (ES_F)
FOMC is done, and we have a good initial reaction today.
We pushed above 4235$ and found some resistance at 4264$ EOD. Futures now show positive action as we are reclaiming that level. Let’s see if it sticks tomorrow.
If we do, I’ll be watching closely at the 21dma & 4308$ level that could prove to be ST resistance where our first stress test & PB get triggered.
From here, after three up days, I’ll look for the initial PB and see if we can get support on a higher low (4235/4211 retest?) and how strong buyers will step in to support the market.
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.
21dma
4308$
4337$
I’ll watch these levels as potential support if we follow through lower (or retest & go):
4264$
4235$ (Oct. low)
4211$
4161$
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 +7 after turning up from a -400 intraday reading. The FOMC reaction was good, but we missed time to push into positive territory.
Price mostly flat
NNL deteriorated, mainly due to morning weakness
daily momentum was barely positive
MCSI hook follow-through
Today was FOMC, and after a weak open, we saw a positive reaction late in the afternoon to close, barely positive. I'll want to say way more strength & momentum than this to get aggressive, but this is a step in the right direction as we didn't roll over on the news.
Despite what we hear about an FTD today, I think we're FAR from that type of action. The move today was made by MEGA-CAPS only, proved by GDB being flat. I want to see GDB > +400 to confirm a strong breadth thrust/FTD confirmed by BROAD participation.
We remain below all kma's, but I see enough clues to test this market long on ANTICIPATION of expanding breadth in the next few days.
MCSI hook confirmed with today's follow-through, and with a strong day tomorrow, we could reclaim 10dma.
MMFI bounce from a higher low area was established with today's follow-through
VIX breaking down from structure
10Y yields breaking down from range, and DXY with a potential false breakout
If these early signals fail to materialize, I will go back to cash, but the probabilities are good enough to at least test the market with small risk & exposure.
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
MMTW (Stocks > 20dma - market extension)
Good follow-through on the breakout. Things are looking excellent & constructive here.
MMFI (Stocks > 50dma - market extension)
Good follow-through on the breakout. Things are looking excellent & constructive here.
A scenario like in June & Oct. 2022 is possible here, where we make a slightly higher low. I’m watching that potential scenario closely.
We followed through on the structure break and undercut the $ 17.08$ level & kma’s.
MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility)
Wedge breakdown follow through. CONSTRUCTIVE.
10Y Bond Yields (daily)
It's a big move on 10Y today, as we broke down from structure and the 21dma as well. CONSTRUCTIVE.
US dollar index (DXY)
Failed breakout?
Inside day, but still outside structure. CONSTRUCTIVE
BTC/USD (Bitcoin)
Breakout to new high, that’s a very constructive continuation move.
SECTORS & THEMES ANALYSIS
Mega-cap led the indices today
Micro-caps & small caps lagging a lot...again
It's good to see XLK XLC & XLY leading again. Those were the ones leading the last strong rally.
Homebuilders leading
Semiconductors to be watched with that breakout
AI good RS
LEADERS (TOP10 - Overall/Weekly/Monthly/52w low/52w high)
10 leading themes charts (w/ pivots):
1 Uranium URA
2 Nuclear NLR
3 Semiconductors SMH
4 Property & Casualty Insurance KBWP
5 Software IGV
6 Internet PNQI
7 Artificial Intelligence & Technology AIQ
8 Blockchain Technology BLOK
9 Oil & Gas Exploration & Production PXE
10 Insurance KIE
FOCUSLIST
LONG FOCUSLIST
LULU daily/130m - LULULEMON ATHLETICA INC. - Alert: 395.7, SL: 385.26
2 leg pullback to retest the 21/50dma and base level. Now building tight action at base level and I will look at recent swingH pivot for an entry.
COUR daily/130m - COURSERA, INC. - Alert: 18.01, SL: 17.33
I see it as the channel breakout, then a retest of DTL & base level on a higher low (just at lightning speed on that large range day). We had every chance to break back below, but we built very tight action in the three days. We could also see that as a shakeout that can fuel the base breakout attempt.
PANW daily/130m - PALO ALTO NETWORKS, INC. - Alert: 246.94, SL: 240.06
50dma pullback. Still within the larger base, but it could be a good anticipation entry following the recent pullback. It showed a lot of RS and failed base breakout before the current PB.
SHORT FOCUSLIST (simplified)
LEADERS LIST
Overall leaders (PRIME Score)
ANF,VRT,VST,RELY,NU,FTAI,DELL,PDD,X,AEO,TDS,XPO,ANET,CRWD,DLR,PINS,NRG,HRB,COUR,OLLI,
Fundamental leaders (FA Score)
NVDA,INDI,NU,TMDX,META,SDRL,LVS,RBA,PODD,DLO,DUOL,CCJ,NCLH,CCL,PANW,MLCO,TDW,DLR,FSLR,EXTR,
Technical leaders (TA Score)
ANF,FRO,VRT,RELY,ESTE,FTI,LPG,X,LBRT,CCJ,PR,DELL,FTAI,AEO,RRC,PDD,TDS,VST,CEIX,SM,
Relative Strength 1 Month (1M-RS)
BTTR,MSTR,SPR,APLS,EGO,NEP,MARA,VSCO,FRO,CUBI,PI,AR,RIOT,KSS,NFLX,CHWY,LPG,NU,HLIT,RRC,
Relative Strength 3 Month (3M-RS)
TDS,APLS,ANF,VRT,CPRI,FRO,RELY,ESTE,X,DELL,CEIX,PR,HRB,FTI,AEO,LBRT,STNG,CCJ,VST,INSW,
Relative Strength 6 Month (6M-RS)
CVNA,IMGN,VRT,ANF,SMCI,APP,TDS,CUBI,PLTR,ETRN,BBIO,ZS,AFRM,XPO,LPG,FTI,FRO,ESTE,RELY,CEIX,
SCANS
Stocks > 50dma & +/- 3% from 21dma #scan (potential 21dma PB LONG setups) 🐂
DELL PDD AEO CRWD PANW META LULU
Stocks < 50dma & +/- 3% from 21dma #scan (potential 21dma PB SHORT setups) 🐻
COUR GES PSTG SPB RHI NTAP WMG ACI WDAY BXMT CIEN MDB JNPR GPK CRI UHS LEA SIG CCK RCL OZK MANU CPB AGCO
Alex’s TAKEAWAYS & GAMEPLAN
The market reacted positively to FOMC today, but in recent history, we saw a reversal of the FOMC move on the following day…so I’ll remain cautious to see if we can hold that move, especially as we get into potential overhead resistance.
One day at a time.
That's how the buyers will SUPPORT the market on pullbacks that will tell us A LOT more in the following days/weeks if we continue higher. That's where they can't hide their actions & intentions.
The big clue will come on the first rejection. Do we make a higher low, and if yes, can we confirm the buyer’s support with a breadth thrust on that reversal day? (GDB >+400) That’s what I want to see to get back long!
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:
With market not rolling over, and MCSI confirming the hook, I’ll be looking to de-risk my AEO & CRWD position first, and increase exposure if it happens.
One day at a time, I want to keep risk (NOR & TOR) very controlled especially before seeing how the market is supported on the first PB.
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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Good morning Alex. How come PTMM is still red whilst IBD signal changed to confirmed uptrend? I am sticking with PTMM signal and will wait for confirmation. Have a great day.