Good evening folks,
Pretty slow summer day. But we were still green and found good movers, so we’ll take it!
Now let’s get ready for tomorrow!
Let’s go!!✌️🛡️
MARKET REVIEW
The market was very choppy today and barely advances while having some pretty large swings intraday. The dips were bought, but the way up was certainly not easy.
We came down to test the resistance area @ 13184$ this morning and it was defended pretty strong. We also close above yesterday’s high, so there are certainly some positives.
What are the levels I’m watching tomorrow?
On the upside, the next level I’m watching is STILL 13555$ which is the next potential important resistance area (area top) and also the DTL from the previous bear market rally top. That’s a 1.5% move.
On the downside, I want to see NQ hold the 13184$ resistance bottom level along ideally the 5dma. If we close below this on volume, I’ll be tempted to try to play the short side on anticipation. (See other indications down)
Remember that we are in a bear market, and we are playing a rally, which means the market can roll over anytime despite the good action we are seeing right now. 🛡️
BULLISH scenario:
We are now in my bullish scenario until further red flags or consolidation.
IF:
THEN:
BEARISH scenario:
I give some leeway to the market to consolidate in a healthy manner before switching to a bearish scenario. Remember, the market & stocks don’t move in straight lines. We have a rally, watch how we react on the pullback and especially on the kma’s retest.
IF:
CLOSE below 12655$
CLOSE below 50dma
THEN:
Threat this reversal as a potential rollover
MARKET BREADTH
Couple of divergences today as the market is up, but some internals are negative. Adv/Decl negative, S>50dma & 200dma negative, flat NNH on NYSE and McClellan going down.
MMFI (Stocks > 50dma) - Closed red on a green market, that’s a divergence. We’re still above 66.60$ & 5dma, but we begin to see signs of fatigue.
VIX - We rejected the 5dma at the open and closed down 2.3% just above last week's low. I want to see this pivot being taken out tomorrow, or it can also be a potential reversal area.
USD/CAD - Still wedging in that support area. Not the kind of action that I really like to see right now. Tomorrow will be important to watch this one as if we break the DTL higher, this could mean problems for the equity market. If we break the UTL, this will be a very positive sign.
US10Y (US 10Y bond yield) - The 10Y has been resting in the last 2 days and following the big reversal. We’ll have to see tomorrow if we find support and form a higher low and bounce here.
HYG/IEI (Credit Spread) - A small up move on the credit spread. Nothing to worry, but still a divergence.
BTC/USD (Bitcoin) - Still wedging and right at the 21dma. Approaching potential support area.
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
(SMH) Semis - Follow through on yesterday’s strength, but we are now getting into that potential resistance area. We could test that level tomorrow along with some semi’s names that are quite ST extended right now. (AMD, PLAB, ON, etc) This could put pressure on the indices.
(TAN) Solar - Still flagging VERY nicely. I like this setup as we found support again at the 5dma and close above yesterday’s high. Could resume higher soon.
(XBI) Biotech - And here is the breakout I was waiting for in Biotech! I am so mad as I missed the entry of the pivot this morning due to the gap. I will have to wait for a PB to get into this very strong sector. We could also see a retest of that 84.63$ pivot, which would really be ideal.
CL_F (Crude Oil) - Continue down.
NG_F (Natural Gas) - Retested the support area this morning but found good support to close in the upper half of the candle. We are now looking at a 2nd DTL breakout attempt tomorrow.
Alex’s TAKEAWAYS:
Leading names still acting strong, but are now ST extended (=)
Almost no good quality setups in the FocusList tonight. Stocks are either very extended or have ER in couples of days (-)
NQ pushing higher but approaching a potential big confluence of resistance (13555$ & DTL) (-)
NQ around 7% extension from 50dma, could be looking at ST top between here and 12% extension. (=)
SMH (Semi’s) almost at resistance (=)
XBI breaking out of multi-week consolidation (+)
Market breadth divergences today. (Adv/Decl, NNH,>50dma, etc) (-)
Crypto consolidating (Bitcoin) (=)
USD up & VIX down (=)
2Y & 10Y bond yield trying to find support in that area (=)
Crude oil (CL_F) continues in a downtrend (+)
LEADERS LIST
Overall leaders (PRIME Score)
STEM,SIGA,TH,ENPH,BFLY,AHCO,PLAB,CELH,AHT,NOVA,HIMS,GRBK,WMS,LSCC,SPWR,CSIQ,CHPT,ON,CPNG,SQM,
Fundamental leaders (FA Score)
AMR,HCC,SQM,EQH,MGM,PLYA,TELL,METC,LBRT,ENLC,JXN,LC,CAN,MPC,DINO,GSL,AHT,HUT,ARCH,DEN,
Technical leaders (TA Score)
SIGA,TH,BFLY,ENPH,AHCO,STEM,PLAB,CELH,HIMS,NOVA,AHT,WMS,GRBK,LSCC,GFF,SPWR,CSIQ,CPNG,ON,CHPT,
Relative Strength 1 Month (1M-RS)
SI,CORZ,COIN,STEM,PLUG,SIGA,ENPH,RIOT,BFLY,HUT,TH,WMS,MELI,CHPT,IS,SLCA,X,SPWR,PLAB,FTCH,
Relative Strength 3 Month (3M-RS)
SIGA,CELH,AHCO,BFLY,TH,BKSY,BEAM,QURE,DVAX,ENPH,CPNG,STEM,PLAB,FGEN,HRB,ELF,HIMS,DQ,STKL,SWAV,
Relative Strength 6 Month (6M-RS)
SIGA,TH,CELH,ENPH,AHCO,VTNR,LNTH,CEIX,STKL,HRB,DQ,QURE,BFLY,NFE,PLAB,HDSN,HIMS,BKSY,SWAV,GFF,
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