Alex's daily Update & Focuslist - 07/25
Good evening folks,
Things are not black or white right now in this market, this market is very challenging and we have to be very quick to spot strength within that constant sector’s rotation.
Let’s go!!✌️🛡️
MARKET REVIEW
Another CONSTRUCTIVE red day. Why do I say constructive?
As you know, I am looking at that pullback to gauge the rally strength and if we see a rollover action or normal pullback right now. Both yesterday and today, we came under good selling pressure but managed to find good support above that 50dma & support area. Volume was also very low today.
Not saying that we’ll rip back up as we have big earnings & economic news this week that will have a larger impact on the market direction, but I like to see the market hold these levels like that right now.
I am now looking at that mini channel forming from the last 2 days’ high. If we can find support in that 12262$ support area tomorrow and close above that DTL, this will be a good chart going into FOMC Wed. IMO.
REMINDER: We really have a BIG week, this week. FOMC (Fed interest rate) on Wednesday and major mega-cap companies report earnings. So I’ll make sure to stay light & nimble on my exposure and probably won’t carry a lot of exposure overnight.
Tuesday: MSFT, GOOG + GOOGL
Wednesday: META
Thursday: AAPL, AMZN
These 6 companies weigh more than 40,6% of the Nasdaq composition. So trust me when I say that next week will be DECISIVE for the market direction.
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. 🛡️
📈 scenario:
We are now in my bullish scenario until further red flags or consolidation
IF:
The recent swing high @ 12655$ will really be an important level to monitor in order to confirm a continuation of this rally by making a price structure new Higher High.
Also looking at the mini channel DTL for a very short term potential reversal off these current levels.
THEN:
I will not take action on these scenarios this week due to major daily news
📉 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 12168$
CLOSE below 50dma
THEN:
I will not take action on these scenarios this week due to major daily news
Alex’s digest:
Let’s look high level at the (+) & (-) of where we stand with Friday’s action
Leading names are holding key levels (+)
NQ is under selling pressure, but manage to stay above support & 50dma (+)
XBI (biotech) & SMH (Semi’s) finding support in the support area. Consolidation underway (=)
Market breadth stays strong despite a red general market. (NNH,>50dma, etc) (+)
Speculative money under pressure (Bitcoin) (-)
USD & VIX are drifting down despite a general market reversal (+)
2Y & 10Y bond yield selling continues on both today (+)
Decent amount of setups tonight for a red day (+)
Crude oil (CL_F) about to break from the multi week’s channel DTL today (-)
More (+) than (-) tonight despite two red days on the indices. If there was not that much news this week, I would clearly take that as being bullish and act on it.
MARKET BREADTH
MMFI (Stocks > 50dma) - Green and held the 5dma again on a market red day…
VIX - Gapped up right at the 24.33 & 10dma I’m watching for a while, only to drift lower all day to close around +1%. ANOTHER ish divergence today with a VIX closing almost unchanged while the market was down -0.6%.
USD/CAD - Rejected ALL KMA’s very hard today and closed back in that support area. Been 2 times now, I would expect down pressure after that second failed breakout attempt.
HYG/IEI (Credit Spread) - Credit spread stays in that support area and don’t spike for now.
BTCUSD (Bitcoin) - Broke that lower mini channel DTL & closed below potential support area… not the best action on BTC tbh.
ECONOMIC CALENDAR
SECTORS PERFORMANCE
(SMH) Semis - Finding support in that support area and also the 50dma today. This is the first step to creating a potential reversal or consolidation at least. Just like XBI is building for a week + now.
(TAN) Solar Found support at the DTL & 50dma creating a WBPB setup, not all is lost! We have ER in the next few days, so nothing’s done here, but this is positive ST action.
(XBI) Biotech - Found support at the 21dma today, and still building that tight consolidation above both the 50dma and important support area.
CL_F (Crude Oil) - Oil, Energy & Gas will be a FOCUS for me going forward. I want to see if we can confirm that strength we saw today.
2 things I’m following closely:
The commodities are really strong and potential reversal at key levels (Coal, Crude Oil, Nat Gas, etc)
Many Energy & Oil names are setting up very nicely right now and I begin to see more of these names showing up in my scans & leading list.
I am looking closely at that CL_F chart for a few days now to see if we can find support in that very important support area. We reversed right at that area bottom today and created a HIGHER LOW in that channel which I see as really positive. We closed strong and we just broke out of that DTL on the futures.
As you’ll see, I want to play that breakout with sector exposure using GUSH 0.00%↑ 3X ETF. The individual names are a sign that we could see a breakout on the commodity.
LEADERS LIST
Overall leaders (PRIME Score)
SQM,HDSN,OXY,SIGA,NFE,LPG,AMR,CELH,YMM,CEIX,ENPH,AR,QURE,BEAM,VET,PLAB,SWAV,PAYO,LNTH,FLNG,
Fundamental leaders (FA Score)
MRO,AMR,HDSN,ARCH,SQM,NFE,OXY,LTHM,PLYA,METC,HCC,CPG,PXD,CAN,MXL,GSL,HST,HUT,CALM,HP,
Technical leaders (TA Score)
TH,SIGA,CEIX,ENPH,SQM,LPG,BEAM,PLAB,AR,VET,PAYO,EQT,EVH,HIMS,QURE,GRBK,YMM,CNK,CPNG,CELH,
Relative Strength 1 Month (1M-RS)
IS,TH,RIOT,SI,CYH,HUT,TELL,BEAM,SGRY,CPNG,VET,CNK,EQT,PAYO,AMR,AR,OLPX,APPS,ZLAB,LPI,
Relative Strength 3 Month (3M-RS)
SIGA,TH,YMM,STKL,LI,PDD,BEAM,DVAX,CELH,QURE,AHCO,DQ,PLAB,HRB,ENPH,BKSY,CD,ELF,RGEN,CEIX,
Relative Strength 6 Month (6M-RS)
TH,VTNR,CEIX,SIGA,LNTH,HDSN,AMR,EQT,NFE,AR,PRCT,CRK,CELH,SQM,STKL,HRB,ENPH,PBF,SD,OXY,
PT PORTFOLIO UPDATE
Due to the packed news release this week and being on vacation, I will not be very active this week as you’ll see. Might try a couple of momentum intraday swings, but nothing more than that.
Alex’s FOCUSLIST
VET 🎖️
One of the leading names in the Oil sector right now. We are building a nice tight consolidation right below the base top level. I like how we rejected the level Friday on very light volume only to rip right back higher today. Conviction comes from the commodity strength behind this play. 23.82$ base top level will be where my alert will be set for an entry.
Alert - 23.82$
CELH
Leading name that I closed my position last Friday (mistake !!). We found good support today at the 80.35$ structure pivot and closed strong on a red day with an inside day. I will be interested to re-enter this name if we can close above 85.08$ as it would confirm my BORS setup.
Alert - 85.08$
HDSN
A name that I did not have on my Focuslist since June. We broke out of the recent channel DTL last week only to come down at the support level retesting that DTL. This is what I call a WBPB (wedge break pullback) as we retest that DTL after we broke out of it. This name has INCREDIBLE fundamentals, that’s why I have it in my Focuslist despite being low in his base.
Alert - 8.43$
HALO 🎖️
This biotech name shows RS over RS… Low how we bounced at that support area last week and we were not even able to break below the 10dma today and found good support (volume a bit low though). Recent swing high would confirm my BO10PB setup tomorrow.
Alert - 50.96$
PLAB
A semiconductor name that I follow for a while and waiting for a pullback to get in. The general market and SMH getting under pressure can a pullback at the 5dma. This is not the deepest pullback, but if SMH has a good day, this one might very well rip higher and never give a better entry. The recent swing high at 22.35$ would confirm the continuation.
Alert - 22.35$
GUSH 🎖️
As pointed out in the SECTORS section, I will use GUSH 3x ETF to gain exposure to the Crude Oil strength. I got in lower at 137.66$, but the recent swing high at 139.75$ would give a good entry if you’re not already in. Look at that volume profile on that recent support area retest…that’s EXACTLY what we want to see. 2 up days on volume, then pullback on very low volume only to rip higher on 2X more volume.
Alert - 139.75$
🎖️ = Alex’s highest conviction setups
REFERENCES
Articles on my system:
I really hope that you enjoyed it. If you did, please share it so that more folks can be reached and this Newsletter can grow. :)