Good evening traders! 👋
What we’ll cover in the Newsletter tonight:
General market analysis ($NQ/$ES levels)
Market Breadth & Internals
Prime Model spreadsheet (PT_database)
Economic Calendar
Sectors Review
Leaders list
Alex’s Portfolio update
Focuslist including setups, alert levels & explanation
GENERAL MARKET ANALYSIS ($NQ/$ES levels)
NASDAQ ($NQ) Daily
We didn’t have to wait too long for that first pullback. We lost the 11534$ level before the open and continued down until the market reversed around 11:00 and never looked back with a very powerful and sustained bounce with a near green close. That’s the kind of reaction that I wanted to see from that first stress test on the indices. For me, that’s very positive to see the market woosh back up like that. First stress test - ✅
Tomorrow, we have job data before the market open (8:30). This is a piece of economic news that can have a high impact on the market direction as the last release showed.
Tomorrow, I want to see the 11534$ level hold once again, and ideally challenge that 11689/11794$ area with a close above it and the 21dma. That would be very constructive.
Tomorrow, we’ll also start tracking for a potential IBD FTD (Follow Through Day)
What Is A Follow-Through Day? | Investor's Business Daily (investors.com)
$NQ levels on the upside
11689/11794$ resistance area
12017$ Sept. structure
the 21dma
$NQ levels on the downside
11534$ level (June structure)
11229$ previous swing low pivot
11285/11068$ area (June low level)
S&P500 ($ES) Daily
$ES levels on the upside
3855/3903$ area from Sept. & June/July structure
the 21dma
$ES levels on the downside
3735/3780$ area that we just breakout
3639$ last week swing low pivot
3596$ level (2020 structure)
MARKET BREADTH & INTERNALS
NYHL (New 52W Highs - Lows) - Small increase in NNL today, now @ -90. Wrong direction…
NYAD (Net Adv/Decl) - Back in the negative with a -1268 reading.
20dma @ -385 (⬇️)
MMTH (Stocks > 200dma - LT breadth) - Retest of the 21dma and closed pretty much unchanged.
MMFI (Stocks > 50dma - MT breadth) - Retest of the 5&10dma and closed pretty much unchanged.
MMTW (Stocks > 20dma - ST breadth) - Big intraday move for the ST breadth as we came to retest the support area and almost the 50dma. I like that we closed above that area and are pretty much unchanged again here.
MCOSINYA (McClellan Oscillator) - McClellan oscillator is still positive but came down a bit today @ 25.18.
VIX - very interesting action here…We tried to reclaim 30 and also the 5&10dma, but we rejected them all to finally close red and at the 21dma. If we continue lower tomorrow, I think a retest of 27.67$ level is possible.
PCCE (PUT/CALL EQUITY RATIO) - 0.889
DXY (US $) - The correlation between the market $NQ and $DXY is very high for the past month or so. The correlation coefficient (r) is oscillating between -0.85 & -0.93. We found support in that 109.97$ area this morning and rallied hard to finally find some resistance at the channel DTL. We’ll have to see if we breakout of that DTL tomorrow, or we break lower, which would be good for the market.
US10Y (US 10Y bond yield) - 10Y is bouncing hard at the 21dma and broke out of the channel DTL today. I’ll be looking at 3.829 for potential resistance.
IEI/HYG (Credit Spread) - Credit Spread continues to act like the market will continue higher. This is the kind of breakdown and trend that we want to see. We still have that support area to break tho, but so far so good!
BTC/USD (Bitcoin) - BTC retested the 10/21dma this morning before finding support and reclaiming the base area. We are sitting at the 50dma again.
PRIME Model spreadsheet (PT_database)
In the last few years, I've developed a model based largely on #CANSLIM fundamentals characteristics to focus on the best stocks. Not having the money to afford a #MarketSmith sub at the time, I built my own fundamental & technical scoring system into an Excel spreadsheet
PRIME Model explained
Starting from today, that's something that I will share daily here as added content to the paid part of the newsletter. So make sure to subscribe if you want to get that access on a daily basis!
Free access to my PT_database 👇
Use wisely, and enjoy!
This was a FREE preview of my daily Market update & Focuslist letter. In the following sections, I’ll cover important parts of my daily routine & preparation for tomorrow’s trading day that you don’t want to miss!
Economic Calendar
Sectors Review
Leaders list
Alex’s Portfolio update
Focuslist including setups, alert levels & explanation
If you’d love to read about 5 such posts every week, then subscribe below to join the PrimeTrading community!
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
Sectors Relative Strength - Weekly (RS vs SPY)
Top 3: XLE - XME - SMH (new)
(XBI) Biotech - XBI retested the 10/21dma and got bought to finally close back above the 50dma. I like that retest of the kma’s after that channel breakout.
(XLE) Energy - Energy is following through once again today with a DTL breakout. We begin to be pretty stretched now, but I think the trend is shifting for a sustained uptrend here.
(XME) Metals & Mining - XME still sitting at the same place as yesterday after a quick gap fill. At the DTL.
(XLV) Health Care - XLV with a follow-through day despite the gap down. We closed above the 50dma
(IGV) Software - We got the reclaim of the stage 1 base area and also a close above the 21dma. Good action.
(TAN) Solar - Solar really got a bad day… Despite that, we are still in that support area, but below all kma’s.
(SMH) Semiconductor - Semi’s had a good day and is now top 5 RS in the last 5D. We also broke that multi-week channel yesterday and follow through today with a close above the 21dma.
Alex’s TAKEAWAYS:
I think that what we are seeing is positive, especially after that kind of bounce from the 11534$ $NQ breakdown today. That being said, we have to see what job data will be tomorrow morning and how the market will react to it. If we can follow through on the upside tomorrow and close above the 21dma and the 11689/11794$, I’ll be more aggressive and increase exposure.
I like what I see but remain cautious until we get back above the 50dma.
We are still in a bear market, but we’ll follow price action as usual and the tape will tell us if this rally has more legs or not! One day & one level at a time!
LEADERS LIST
Overall leaders (PRIME Score)
WTI,YPF,CEIX,XMTR,HLIT,CCRN,CRK,PBF,VLD,RVNC,PAYO,INSW,ON,DEN,MPC,TALO,RXDX,ERF,WOLF,CHK,
Fundamental leaders (FA Score)
AMR,HCC,DK,MRO,ERF,DVAX,MGM,DRH,TELL,LBRT,BHF,ENLC,SWAV,TRGP,WTI,HLIT,MPC,FANG,KOS,ARCH,
Technical leaders (TA Score)
WTI,YPF,RVNC,XMTR,CEIX,CCRN,PAYO,HLIT,PBF,RXDX,PCG,CRK,WOLF,ON,MRSN,WFRD,DCPH,BTU,AMR,VLD,
Relative Strength 1 Month (1M-RS)
RVNC,STNE,PBF,BTU,CCRN,WFRD,CPNG,RCUS,BVN,BECN,PCG,BHC,AZUL,PAAS,YPF,OI,WTI,MTSI,SKIN,BOX,
Relative Strength 3 Month (3M-RS)
VLD,TH,YPF,MARA,AEHR,RXDX,RVNC,WTI,WFRD,XMTR,STEM,INSW,WOLF,IEA,CRK,CPRX,CEIX,ZETA,ARRY,RIOT,
Relative Strength 6 Month (6M-RS)
TH,CEIX,DCPH,STNG,MRSN,WTI,STKL,SWIR,INSW,RXRX,SMCI,XMTR,CELH,RXDX,ARLP,CCRN,ARRY,AEHR,CPRX,YPF,
PT PORTFOLIO UPDATE
Position management GAMEPLAN:
Position size: 1/2 positions max (10% of equity)
Position management
First trim: sell 25% initial position
Trim @ first day EOD
SL moved @ breakeven
2nd trim: sell 25% initial position - 10dma EOD break
3rd trim: sell 50% initial position - 21dma EOD break
Scale-out approach
Alex’s FOCUSLIST
ON 70.89, RXDX 61.83, SWAV 291.35, VLD 4.59+DTL, CHPT 16.6, STEM 14.16, INDI 8.03, TH 13.03
ON 🎖️
Recent leading Semi’s name consolidated in a really controlled way just under the 50dma in a very nice tight area on low volume. I’ll be looking at this LT base area reclaim and the recent swing high for a potential entry.
UPDATE: showed a lot of RS today. Closed green and above the base area. Same entry pivot for tomorrow.
Entry: recent swing high pivot @ 70.89$
RXDX
Biotech sector is one of the leaders right now and RXDX just had a nice base breakout that we came to retest the b/o area in the last 2 days. I like how we are holding that level and the 5dma on a name that was held amazingly in the last few weeks.
UPDATE: Been under pressure today, but we found good buying at that base area and 10dma. I like what I see and the setup is still developing. Lowered my entry pivot a bit to use the most recent swing high pivot instead.
Entry: recent swing high pivot @ 63.13$
SWAV
One of those recent potential leaders’ names has recovered pretty nicely after that report/news created that undercut the 50dma. But we then reacted very well and now back above all kma’s. I see a retest of the area yesterday and a BORS confirmation today.
UPDATE: Retested the DTL, base area, and the 5/10/21dma today and bounce to finally closed unchanged from the open. Still entry pivot active.
Entry: reclaim swing high pivot @ 291.35$
VLD 🎖️
One of the most interesting setups right now. Huge 370% first leg from the lows and recently a nice consolidation above the 50dma. This is still a pretty volatile and low float stock, but I really like the fundamentals and the way we contracted in the last few weeks. Could be a big winner.
UPDATE: I took that trade, but that daily DTL & entry pivot are still active. I might add to my position on the alert.
Entry: recent swing high pivot @ 4.59$ + DTL
CHPT
PBW sector has been super strong today and CHPT was a name that was outperforming the market in the last few weeks before getting hit by the market PB. We just breakout of a tight area just below the 50dma and closed above all kma’s. I’ll be looking at a breakout of today’s high to confirm the stage 1 base reclaim.
UPDATE: Was under pressure today and filled the gap from yesterday on that retest. We closed red, but I like to see that kind of support in key areas. Still same entry pivot.
Entry: stage 1 base reclaim candle high @ 16.60$
STEM 🎖️
STEM has been in the FL back in Aug. but got dragged down with the market at the 50dma. I like the 100%+ run from the lows, before that consolidation. We retested that stage 1 base area last week and built a nice “tight” area below the 50dma that we reclaimed yesterday. Now today we again retested it and closed above the recent structure low and the 50dma, which is what I wanted to see.
Entry: recent swing high pivot @ 14.16$
INDI
Another Semi’s that is setting up at the 50dma with a nice tight consolidation. We breakout of that area and above all kma’s yesterday, and retested it today. I’ll be looking at yesterday’s high pivot for an entry.
Entry: recent swing high pivot @ 8.03$
TH
A name that I tried to position a couple of times before the market sold off. I like the 200% move from the lows, and how we held the recent consolidation structure along the 50dma while the market was losing his S**. I am seeing a DTL breakout for a possible lower entry in the base.
UPDATE: We are still building some type of consolidation out of that channel at the kma’s. We are still at the 50dma and I’ll be looking at the same entry pivot.
Entry: recent swing high pivot @ 13.03$
🎖️ = Alex’s highest conviction setups
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
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 closely all my education articles to learn how I handle trades around these entry pivots.
Want to know how to execute these setups & trade side by side with me?
The PrimeTrading community is getting bigger & bigger on DISCORD! 🗨️
We are now over 100 traders in the DISCORD channel, for:
Getting my own trades & market commentary live
Education & mentoring
Discuss trade ideas with a like-minded community
Macro Economy, Crypto & more!
Staying on the right side of the market with a risk management approach first.
REFERENCES
Articles on the system:
I really hope that you enjoyed it. If you did, please share it & hit the LIKE button so that more folks can be reached and this Newsletter can grow. :)