Alex's daily Market update & Focuslist - 01/11
The market is at INFLECTION POINT, and everything will depend on the CPI reaction tomorrow!
GENERAL MARKET ANALYSIS
S&P500 (ES_F) Daily
Price Action Analysis:
Today we follow through on yesterday’s bounce, and we showed very powerful action pushing through the 50dma, 3964$ level, AND Friday’s high. That’s very impressive.
We see many positives in the indices and the internal breadth of this market (see takeaways)…BUT, everything will have to be validated and depends on tomorrow morning's CPI report. So remember that everything I say & see tonight in the newsletter will depend on the CPI reaction tomorrow. It’s that important…
On the upside,
4016$ & 4050$ are the two levels I’ll be looking closely at on the upside. We also have the very important 200dma that will be around 4025$ tomorrow, so one to watch as well.
On the downside,
I want to see the 3964$ level to hold now on a retest. The 50dma is also a significant level to watch on the downside.
NASDAQ (NQ_F) Daily
RUSSELL 2K (RTY_F) Daily
In the following sections of tonight’s letter, I’ll cover essential parts of my daily routine & preparation for tomorrow’s trading session.
✅ My overall current market Takeaways & GAMEPLAN for tomorrow
✅ My daily Focuslist, including setups, alert levels & explanation (LONG/SHORT)
✅ My Portfolio update
✅ Sectors Review
✅ Market Breadth & Internals
✅ Economic Calendar
✅ Prime Model spreadsheet (PT_database)
✅ Leaders list (technicals, fundamentals & potential TMLs)
Alex’s TAKEAWAYS
I think we are at a crossroads right now. We are seeing one of the most significant & more sustained breadth pushes of this bear market while the indices are sitting just below the 200dma.
This could all be the first significant divergence we see, and the market continues with a leg lower following the CPI catalyst tomorrow. Still, the selling exhaustion we saw on this last leg lower is very intriguing.
Additionally, we already had our MT_SIGNAL turning bullish last week and our MT_SIGNAL at the closest 50dma cross of this entire bear market. This cross has been pretty reliable in the past 20 years to signal a market turn.
AGAIN!! We have a CPI report tomorrow morning that will have a significant impact on this market, so I remain cautious before calling anything, as this past week’s strength could only have been a beaten-down stock rally, while we did not see a lot of quality setups emerging…and they’ll roll over this market on CPI tomorrow.
What I DO know is we’re such a vital INFLECTION POINT. If we react positively tomorrow, I’ll turn VERY BULLISH. I’ll bend with the market price action if we roll over and play this next leg down.
Some observations:
MAKE OR BREAK tomorrow
Market health & Trend indicators:
LT_SIGNAL: uptrend (black) + BELOW 50dma = BEAR market under pressure (🟨)
MT_SIGNAL: uptrend (black) + ABOVE 10dma = UPTREND (🟩)
Tomorrow's economic news:
GAME PLAN:
All will depend on CPI for me tomorrow.
If we get a good reaction and get a big gap up, I will probably wait for things to stabilize and enter intraday consolidation.
If we gap down on a bad reaction, I will run for the door, reduce my exposure aggressively, and watch for playing the indices rollover with an inverse ETF ( SQQQ/SPXS, etc.)
EXPOSURE MODEL:
FOCUSLIST (LONG)
BAND 23.18, LABU 7.33, CPRX 20.51, YY 37.52, SHLS 25.87,
BAND - Alert: 23.18, SL: 20.69
One of the best performers of the last six months is still in a clear channel on low volume for the past couple of weeks. We got rejected at the 10/21dma today, but I want to keep an eye on this one if the market was to rally higher. Reclaiming that swing high would also coincide with a channel DTL breakout. Not a high conviction setup for tomorrow, but if it works, it could be a great entry off a potential lower high at the 50d.
UPDATE: It tried to breakout from that channel today but could not push as expected. It might be tomorrow.
LABU - Alert: 7.33, SL: 6.59
Once again, we get a reversal in the consolidation area. I am still watching the 7.33$ level for an entry into the Biotech sector.
UPDATE: I did take the entry today, but keeping it there as if we gap a bit lower and take back this 7.33$ pivot, it’s a buy or adds opportunity.
CPRX - Alert: 20.51, SL: 18.92
This has been one of the strongest stocks of the last few months. We are climbing in staircase fashion, level after level. We are digesting the gains from the BO21PB setup and building above the 10dma. I will be looking at the recent swing high for a breakout.
YY - Alert: 37.52, SL: 36.22
Stage 1 base breakout last week, then we are pulling back on very low volume to the 10dma. This is the first pullback of stage 2 and potentially a great area to position on a lower-risk entry.
SHLS - Alert: 25.87, SL: 23.91
A bit riskier play, but I like how we digested the offering and some resignation that caused the gap in November. We wedged down to retest the stage 1 base area on low volume. Today, we broke from the DTL for a nice WB setup. I would look at today’s high pivot to confirm the continuation.
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
SECTORS PERFORMANCE
Leading sectors:
(XBI) Biotech - The chop fest continues… but today, we broke the recent range area we’ve been in for the last couple of days. If we breakout 85$ level, it’s go time here. I’m long LABU.
(GDX) Gold miners - The trend continues
(XLE) Energy - Rejected again at the 50dma but held the top of the range, too… need confirmation on either side.
(XME) Metals & Mining - Retest of the 53.84$ pivot today. That’s a BORS setup for me.
(XLV) Healthcare - Another up day as come back to retest the 50dma and recent consolidation DTL. Inflection point tomorrow…we roll over, or do we breakout higher on that DTL b/o?
Sectors on watch:
(SMH) Semiconductors - Super strong and breakout of Friday’s high pivot.
(TAN) Solar - Very powerful move AGAIN today… we gapped above the 50dma and pushed 4%.
MARKET BREADTH & INTERNALS
$NYHL (Cumulative new 52W Highs/Lows & 50dma)
Still on bear market signal…BUT still UP. We are at the closest 50dma cross of this entire bear market. This cross has been pretty reliable in the past 20 years to signal a market turn. Keeping a close watch on this one in the next few days!
LT_SIGNAL: uptrend (black) + BELOW 50dma = BEAR market under pressure (🟨)
!MCSUMNYA (McClellan summation index & 10dma)
MT_SIGNAL: uptrend (black) + ABOVE 10dma = UPTREND (🟩)
NYHL (New 52W Highs/Lows) - Back up at 76 NNH today.
NYAD (Net Adv/Decl) - back above +1000 again today.
MMFI (Stocks > 50dma - MT breadth) - new high, but approaching overbought area.
MMTW (Stocks > 20dma - ST breadth) - We are pushing into ST overbought area.
VIX (Volatility S&P 500) - Inside day, we need to see the CPI reaction tomorrow, but the trend is down.
DXY/TNX (US$) - Very weak and can’t bounce. It seems to me like we want to resume lower.
US10Y/TNX (US 10Y bond yield) - Reversal today and still below all kma’s.
ECONOMIC & EARNINGS CALENDAR
PRIME MODEL SPREADSHEET (PT_database)
Access to the PT_database 👇
LEADERS LIST
Overall leaders (PRIME Score)
AEHR,CPRX,OII,RIG,YY,FOUR,ARRY,TGTX,WMG,FTAI,VAL,CPRI,ALGM,CSIQ,COTY,SHLS,RCL,IGT,KBH,LBRT,
Fundamental leaders (FA Score)
NOG,FRO,CALM,PR,RUN,AEHR,HGV,TRIP,GFS,JXN,LBRT,DVAX,CEIX,DK,PBF,ALB,LYV,EURN,NEX,SMCI,
Technical leaders (TA Score)
TGTX,AEHR,OII,RIG,CPRX,YY,ARRY,CSIQ,CPRI,WMG,FTAI,FOUR,ALGM,BAND,KLAC,HAL,COTY,VAL,RCL,SHLS,
Relative Strength 1 Month (1M-RS)
AUPH,TGTX,RIG,OII,AEHR,CSIQ,CLF,FTAI,CARG,DLO,ARRY,FOUR,VAL,FLYW,BTTR,CCJ,YY,LBRT,KBH,MNDY,
Relative Strength 3 Month (3M-RS)
TGTX,BAND,OII,AEHR,RIG,WMG,CPRX,ALGM,KLAC,YY,CPRI,SMCI,COTY,SPR,IGT,FTAI,CSIQ,PLNT,ARRY,NLY,
Relative Strength 6 Month (6M-RS)
AEHR,TGTX,CPRX,OII,RIG,ARRY,SMCI,BAND,FOUR,ALGM,RCL,WMG,VAL,CPRI,YY,PRTA,GPS,CSIQ,FRO,KLAC,
REFERENCES
Articles on the system:
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