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MARKET REVIEW
After the market was not able to reclaim 13575$ level Thursday before the close, NQ continued its slide and closed 2% lower on Friday. We were not able to hold the 13356$ level and also close below the 10 & 5dma.
We are now in the pullback that we were waiting for as we were quite extended. The big question is where we’ll find support and be able to continue our rally…or is it the beginning of the market rolling over? We will have to follow closely the market action in the next few days/weeks to confirm the scenario we’re in.
What are the levels I’m watching on NASDAQ tomorrow?
On the upside, we want to see a reclaim of the 13356$ level and also a close above the 5/10dma would be really ideal.
On the downside, we are within a strike of my bearish scenario with the 13108$ pivot being 0.6% away only. If we break lower than that level, we could see a potential retest of the 50dma.
Right now, I really want to see the 13108$ level & the 21dma act as support and hold that market to keep this pullback short-lived and healthy.
MARKET BREADTH
MMFI (Stocks > 50dma) - Gap down and good move lower to close below the 10dma. We are pulling back and that’s what we wanted to see to remove the recent excess.
MMTW (Stocks > 20dma) - We broke lower of that tight consolidation zone that I was monitoring. We are pulling back and that’s what we wanted to see to remove the recent excess.
VIX - Gap up and spiked into the 21.21 level I am watching for a while. It acted as resistance and the VIX closed got rejected and closed in the lower half, which is a small positive.
DXY (US $) - US$ spiking, this is a red flag.
US10Y (US 10Y bond yield) - 10Y spiked Friday and went straight into overhead resistance. We’ll have to see if we continue that strength this week, as this is a big headwind for the growth stocks.
US2Y (US 2Y bond yield) - 2Y was not able to reclaim that 3.31% level that we tried to breakout. We are still in that consolidation and above the 10/21dma, so we’ll have to be patient to see where we resume the move.
IEI/HYG (Credit Spread) - Credit Spread begins to pick up steam with volume increasing. This is a red flag but still contained.
BTC/USD (Bitcoin) - Big selloff in the crypto space Friday as Bitcoin itself dropped 8%+. We are now well below kma’s and trying to retest previous support that is now resistance. Look for a rejection of that area.
NG_F (Natural Gas) - Still in our resistance area, but rejected 2 times the retest lower. Still looking good for a breakout imo.
CL_F (Crude Oil) - Tried to retraced back lower at that recent pivot but was bought into Friday. I will be looking at that larger wedge formation breakout this week, with the DTL breakout as a confirmation.
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
(SMH) Semis - New lower low and not able to hold the 21dma at the close Friday. I’ll be looking at a potential retest of the 232$ support level.
(TAN) Solar - Was not able to hold the 86$ support Friday and closed below it and the 10dma. I’ll be looking at the 83.3$ pivot and 21dma for potential support tomorrow.
(XBI) Biotech - Weak bounce off the 21dma. We might see more selling pressure and a retest of the 84.63$ level.
Let’s look at our 6 other sectors that just broke out of stage 1 bases
(CIBR) Cybersecurity - Pullback to the stage 1 base support area.
(FDN) Internet - Pullback to the stage 1 base support area.
(IGV) Software - Pullback to the stage 1 base support area.
(XME) Metals & Mining - Pullback to the stage 1 base support area.
(XRT) Retail - Lost 70.88 level and now pullback to the stage 1 base support area.
(XLF) Financial - Lost support level and closed below the 10dma
Alex’s TAKEAWAYS:
We are now in an official pullback on the major indices and we have to respect it at this point. We don’t know if we are seeing the top of the recent rally, or a healthy pullback.
I am still seeing constructive basing action in the recent cycle leading names and as long these as these names don’t lose key levels, I’ll treat this as a normal pullback to remove the recent excess in short-term breadth.
As you’ll see in tonight's FocusList, there are a lot of names that were too extended that are now giving very interesting buying setups. This is a positive sign IMO that strong names don’t sell off with the market.
I will change my view quickly if that scenario doesn’t materialize.
LEADERS LIST
Overall leaders (PRIME Score)
SIGA,SWAV,AEHR,STEM,AHT,CEIX,CPRX,NFE,ENPH,MRSN,NOVA,TH,SPWR,LNTH,AIV,STKL,HRB,SMCI,INSW,BFLY,
Fundamental leaders (FA Score)
RES,AMR,HCC,DK,MRO,ERF,DVAX,MGM,DRH,TELL,LBRT,BHF,ENLC,SWAV,LC,TRGP,SLDP,WTI,MPC,FANG,
Technical leaders (TA Score)
MRSN,SIGA,CPRX,CCXI,SWAV,AEHR,STEM,SPWR,STKL,ENPH,NFE,CEIX,HRB,PLUG,SMCI,BFLY,NOVA,CSIQ,YELL,AIV,
Relative Strength 1 Month (1M-RS)
MRSN,SIGA,AMRS,CPRX,LAZR,SWAV,CLAR,BFLY,WTI,STEM,HIVE,AZUL,FUBO,SRRK,AEHR,CCXI,PLUG,RXRX,OSCR,RKLB,
Relative Strength 3 Month (3M-RS)
TH,CCXI,AEHR,MRSN,CPRX,YELL,STEM,AHT,SWAV,SIGA,BFLY,RXRX,SRRK,ELF,AGEN,HIMS,ENPH,CELH,FGEN,PLUG,
Relative Strength 6 Month (6M-RS)
TH,SIGA,LNTH,NFE,CEIX,STNG,CRK,STKL,ENPH,HDSN,MRSN,SWIR,EQT,CPRX,SWAV,CCXI,HRB,AR,ARLP,PBF,
PT PORTFOLIO UPDATE
Tomorrow’s game plan:
As the market seems to open with a gap down, for now, I will be patient at the market open and see if my position is holding and if the leading names find support before thinking about putting more exposure.
Alex’s FOCUSLIST
CELH 🎖️
No presentation needed ;) CELH is shaping up with a perfect BO21PB setup which also creates the handle of the larger multi months C&H pattern. I already have a pretty big position in this name, but looking to add even more on that DTL breakout.
UPDATE: Another down day that got supported and still above the 21dma & UTL.
Alert - DTL + 105.52$
RES
Oil name setting up for a handle breakout at the 50dma after a bigger wedge breakout. This is the #1 fundamental score of my entire UniverseList.
Alert - 7.82$
AEHR
Very powerful name that just made a 60% run in less than a month. I am looking at a potential HTF at the 10dma (BO10PB setup). We are building tight action above the 10dma with higher lows within this consolidation.
Alert - DTL + 18.29$
STKL
Recent PEG with a low volume pullback to the 10dma. That’s where I like to start looking for an entry on this kind of setup. The DTL breakout would offer a potential early entry on that retest.
Alert - DTL
GFF
Recent leading name that got alerted in PT on the BORS setup in early august. Now setting up for its first BO10PB setup after that run. A break of 33.60$ would confirm the continuation
Alert - 33.60$
PRVA 🎖️
The healthcare group is really strong and did not move Friday on market selling off. I am looking at a BORL setup with a higher low on the retest. A break of the 37.40$ pivot would confirm the setup.
Alert - 37.40$
CF
Chemical name that has just broken from recent resistance area and now consolidation above it at the 10dma. Just made 2 higher lows an I’m looking at the 104.82$ recent swing high pivot for an entry.
Alert - 104.82$
SIGA
One of the top recent performers of the recent months setting up for a potential BORS setup on the restest of that first swing high end of July. This resistance flipped to support and I’m now looking at a reclaim of 24.40$ pivot for an entry.
Alert - 24.40$
ON
While SMH was down Friday, ON was bucking the sector & market trend with a very impressive flat day & inside day above the recent 72$ support level. If we can reclaim the recent swing high, it would confirm continuation for me.
Alert - 75.26$
MRSN 🎖️
A biotech name setting up for a powerful BO10PB setup after its post ER breakout and 55% run-up in 2 days. The setup is almost IDENTICAL to AEHR’s chart on July 29th. That’s the kind of setup that I’m ready to test with a smaller-than-usual position as the sector risk is high.
Also, notice how it is bucking the $XBI recent weakness. That’s a big positive for this name and setup quality.
Alert - DTL + 7.54$
🎖️ = Alex’s highest conviction setups
REFERENCES
Articles on my system:
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