Alex's daily Market update & Focuslist - 12/06
Failed continuation attempt and follow-through of yesterday’s reversal.
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Tonight’s daily report content
PrimeTrading Market Model #PTMM
General Market Analysis: NASDAQ - S&P 500 - RUSSEL 2K - OTHERS, including my daily levels & my bullish and bearish scenarios
Market Internals
Sectors & Themes Analysis
Daily Focuslist including setups, alert levels & explanation (long & short)
Leaders list + Scans (technicals, fundamentals & potential TMLs)
My Portfolio Update
Economic Calendar
Prime Model spreadsheet (PT_database)
PrimeTrading Market Model #PTMM
PTMM remains on a YELLOW market signal (🟨)
Key Takeaways:
GDB closed at -60, as we saw decisive action at the open, only to fade and close negative. We can see today as being a failed continuation attempt and follow-through of yesterday’s reversal.
That recent 10+ 5-day ratio & 100+ MT_momo extreme print might have been a good clue of the current rally exhaustion move. (We’ll see if we can confirm it)
MCSI begins to round down with the weakness of the last two days. This is a red flag, especially after the run we just had.
NNH jumped a bit, but primarily because of the open. Tomorrow, we’ll see the real print if we follow through.
We’ve had a fantastic run from where MCSI crossed the 10dma on November 2nd. MCSI looks stretched, and we just saw extreme ST & MT momentum readings, which could be seen as exhaustion.
Today’s action made me close most of my exposure. Here are the reasons why I called it the end of the swing run for me today:
The market is extended & overbought (MMTW/MMFI).
Indices >8xATR-50dma.
PTMM shows extreme ST/MT_momo readings, which are usually contrarian signals.
MCSI is showing a rounding down action after an extended run.
VIX is in a crucial support area and doesn’t want to break down. 10Y breaking down, and DXY rallying.
BLOK double top & overall miners extension
At the more micro level, we saw classic spin tops in extended stuff like AFRM, nasty reversals with potential lower highs in others, while weak stocks broke down first this morning. When I see this spinning top action in price leaders and being stopped in my weaker holdings, it's usually time to call it a day and wait for setups again.
Maybe I overreacted, but knowing where we are on the extension level, we now see what I didn't want to see. I think the upside is limited here, and it’s important to know when to take our profits as a swing trader.
Alex's gameplan:
I am now mostly in cash and see this window of opportunity behind us unless proven otherwise.
I plan to wait on the sidelines until we get more clarity on the severity of this pullback, consolidation, or everything in between.
There is no need to push here with an extended market and today’s action.
It's time for me to work on some side projects, as I’m not shorting on a YELLOW signal and price above all kma’s.
System Action/Rules:
New LONG exposure allowed
1/2 positions only (10%)
Trimming 1/3 at 2R & 3R
Keeping 1/3 as a runner position
PF exposure max = 50%
New open risk > - 0.50%
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