Alex's daily Update & Focuslist - 07/31
Good evening folks,
Hope you had a great weekend and are ready for another week full of opportunities :)
Friday was quite an important EOW & EOM day. We closed the month very strong with a bullish engulfing candle right at a pretty important long-term moving average. Not saying that we have seen the bottom, but this is a very strong candle that I’ll have to keep in mind in August to see if we can follow through on this reversal.
On the daily chart, we tested back & found support at the very important 12801$ level which was the top of the support area we were tracking for a few weeks now. NQ friday’s action does classify as a BORS setup in my books.
Obviously, I want that big area now turned support hold going forward if we really want to see higher prices on the indices.
On the upside, the next level I’m watching is 13184$ which is the next potential important resistance area. That’s a 1.9% move.
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. 🛡️
We are now in my bullish scenario until further red flags or consolidation.
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.
CLOSE below 12578$
CLOSE below 50dma
Reduce long exposure and treat this reversal as a potential rollover
MMFI (Stocks > 50dma) - We continued the grind higher Friday and very interesting that we SURPASSED the march rally top on stocks > 50dma. That’s a very positive sign that we see broader participation in this current rally.
VIX - Still drifting down with another 4.5% move down Friday. Approaching quickly the March rally lows of 18.67$.
USD/CAD - yet another attempt to reverse at support bottom, but rejected once again in the 50dma area. Let’s see if selling continues this week.
HYG/IEI (Credit Spread) - Nothing to worry here.
BTC/USD (Bitcoin) - Consolidate right below 24280$ important level but still above the 50dma. We are still on low volume and above kma’s, healthy action so far.
ECONOMIC & EARNINGS CALENDAR
(SMH) Semis - Found support a 2nd time at the 232.14$ pivot and closed above Thursday's high. I will be looking at 246.76$ for a potential next resistance of importance.
(TAN) Solar was Very strong above PEG HVC and closed above Thursday’s high as well. Potential resistance of importance is still further ahead too.
(XBI) Biotech - XBI Lagged all week but still consolidating on low volume above support area and the 50 & 21dma. So far, healthy for me and if we see the strength I will be interested to re-open exposure in this sector through LABU.
CL_F (Crude Oil) - Failed the 100.99$ and 99$ pivot for the 4th time in 4 days. At this point, selling pressure seems higher than buying. I will be looking for a potential move down on Oil if we break below this channel UTL. We can still find support and breakout higher, but right now it’s really an indecision spot. Wait & see.
Leading names are holding key levels & breaking out (+)
NQ with restest of support & closing HH (+)
Potential important resistance on NQ, SMH & TAN are at a good distance, we might see more strength to open the week before pulling back IMO. (+)
SMH (Semi’s) & TAN followed through (+)
Market breadth retest & continuation. (NNH,>50dma, etc) (+)
Speculative consolidating (Bitcoin) (=)
USD & VIX drift down (+)
2Y & 10Y bond yield selling off (+)
Crude oil (CL_F) unable to break out of that support area AGAIN (+)
Overall leaders (PRIME Score)
Fundamental leaders (FA Score)
Technical leaders (TA Score)
Relative Strength 1 Month (1M-RS)
Relative Strength 3 Month (3M-RS)
Relative Strength 6 Month (6M-RS)
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