Good evening folks,
Well, that was one hell of a day following higher-than-expected CPI inflation data! Let’s see how this reaction could mean for the future.
Let’s go!!✌️🛡️
MARKET REVIEW
At 8:30 before the market opened, we had CPI data that came worse than expected @ 9.1%. With such a result, the market sold off but was not able to stay below both the recent structure UTL & also the 11689$ support level.
This is very interesting to see the market close unchanged on such a piece of bad news, while we would have normally seen the market sell-off hard and close near its low. When the market starts to act good (ish) on bad news, this is a clear change of character that you have to take note of. On top of that, we also see individual names decoupling the indices for almost 2 weeks now, especially in biotech & healthcare, but still.
Don’t quote me wrong, I am not predicting the market to go straight up, I am simply noting supporting clues that might add up over time as we confirm a potential bullish scenario with the price action.
We are still in a downtrend, playing a reaction rally, so keep in mind that this market can roll over at any time even if we see some strong groups and individual names. We are still on thin ice! 🛡️
Bullish scenario:
IF:
Reclaim wedge DTL
Reclaim 11974$ pivot
THEN:
Add long exposure with respect to Progressive Exposure & Market based Exposure
Bearish scenario:
IF:
Break below 11689$
Break below UTL
THEN:
Close long & add short exposure through SQQQ
MARKET BREADTH
We had 1M & 52W NNL across the board today. Negative A/D AGAIN TODAY… On the positive side, stocks above 50dma & 200dma is holding up pretty well AGAIN TODAY and consolidating at these levels for a few days now.
MMFI (Stocks > 50dma) - In fact, I very much like the fact that stocks are able to hold their ground above their 50dma like that and build a “tight” area above the big support area. We are also building higher lows.
VIX - Very interestingly, VIX spiked high, but we were not able to stay above yesterday's close. We are right back at the recent UTL I’m watching closely and the 26.83$ pivot. Tomorrow will AGAIN be pivotal.
USD/CAD We rejected the base top 1.305$ level today and close right back at the 10dma. This is the 6th rejection of this level in a week, and this week’s created a lower high. We are very tight and this one will break one way or another.
ECONOMIC CALENDAR
SECTORS PERFORMANCE
One thing that is standing out for me expect from miners & Metals being strong but in a downtrend…is how well Biotech & Semi’s held, even along Solar making a save today. Our 3 leading sectors are alive and that’s really positive if we want to get a chance to rally.
(SMH) Semis Gap down straight at the support area but we held and close very strong. We are back at the DTL again. Tomorrow will be VERY important to see if we can break out of that wedge and push higher. Than would be good for the overall market folks…
(TAN) Solar What a save! That’s exactly where we had to find support, right at the UTL. Now we are far from being out of the woods in solar, but this is a first step at least.
(XBI) Biotech Leading, leading, leading. Another hold of the 10dma & support area. Now if we can close above that DTL & 84.63$ level, it’s GO time. (and for the market as well)
LEADERS LIST
Overall leaders (PRIME Score)
CELH,DVAX,CEIX,STKL,SIGA,AMPH,LI,ACET,QURE,HRMY,LNTH,ABCL,YMM,HALO,HIMS,ARLP,CALM,VIR,EQT,ELF,
Fundamental leaders (FA Score)
MRO,AMR,HDSN,ARCH,SQM,OXY,LTHM,PLYA,METC,HCC,CPG,PXD,MXL,HST,HP,CVI,CF,SHO,OPEN,MAR,
Technical leaders (TA Score)
CEIX,CELH,SIGA,QURE,DVAX,STKL,ACET,ABCL,AGEN,AMPH,ARLP,HIMS,CALM,HALO,HRMY,LNTH,LI,ELF,SRPT,VIR,
Relative Strength 1 Month (1M-RS)
AGEN,BEAM,QURE,SRRK,AMC,VCYT,ACET,VIR,CDMO,ARWR,DVAX,TSP,HIMS,CEIX,PTGX,TDOC,CELH,ABCL,CFLT,FLYW,
Relative Strength 6 Month (6M-RS)
LNTH,SIGA,VTNR,CEIX,HDSN,HRB,DQ,OXY,STKL,AMR,CELH,CVI,EGY,HRMY,JKS,AR,SQM,ARLP,ARCH,HALO,
PT PORTFOLIO UPDATE
Alex’s FOCUSLIST
HRMY
HRMY is a biotech leading stock with impressive action in the last few weeks. It is consolidating very constructively above the breakout level and retested it again today. I like how we got support and closed almost unchanged on this weak market day.
Watch for a retake of the 55.14$ pivot (see on 65min timeframe as the first breakout thrust high) for a continuation entry.
Alert - 55.14$
CELH
I am still thinking that this is the potential TML of the next cycle, so you will see this name quite often until I can get back in again. Right now, we see a BO10PB & BORS setup developing. I will watch for either the DTL breakout or the 78.34$ pivot breakout for continuation. Pivot is a little far from here, so the DTL might probably give a lower risk early entry for now.
UPDATE: We bounced really fast off the support level today and even tried to breakout of the DTL. I tried the trade today but closed it at breakeven as the market was not able to close above kma’s to allow me to keep exposure. Will watch again tomorrow if we can find a good entry.
Alert - 78.34$ + DTL
CAL
Retail name showing RS today in red tape again today. I like the way it is building a tight channel back to the 50dma after the initial breakout attempt (red resistance area). Notice how we are building higher lows structure right at the 50dma. It’s either that we break below and fail, or we reclaim the 27.17$ recent swing high pivot and make another breakout attempt.
Alert - 27.17$ + DTL
STKL
Very powerful name that I missed the entry of the initial breakout. The initial 65% run in 3 days on the last ER is pretty impressive along with the nice VCP base it built afterward. We broke out on power last week and we are now building a nice consolidation at the 10dma.
Alert - 9.11$
LNTH
LNTH is making its way into the focuslist after a few days of choppy action. I like how we made a higher low yesterday while holding the 50 & 21dma and also being able to reclaim the recent b/o pivot today after a nasty gap down. I would use the breakout swing high pivot as my entry for a continuation confirmation. ER on 27th July, it’s a rocket or nothing as we approach quickly the announcement date.
Alert - 69.08$
ABCL
This is one of my current position and it’s acting amazing out of the stage 1 base breakout. This is exactly the kind of action you want to see after a breakout, the stock is supported on its first pullback of the 5 or 10dma in that case. If the market acts well and we get continuation confirmation here, I will probably add to my position on this name. We are looking at a classic BO10PB here with an early entry even being trigged today on the DTL breakout.
UPDATE: A bit less “amazing” action 😅 But the setup is still valid and I missed too many stocks by removing my alerts on a failed pivot breakout. Let’s see if it can reclaim it tomorrow.
Alert - 11.60$
LI
Yeah…a Chinese stock :)
This one is simply setting up too good to pass over. This is also a larger market cap stock, so the risk is a bit less IMO. I will not trade a full position on it, but a 1/2 position is acceptable. I see a perfect BORL & BO21PB setup as we are retesting the breakout area. We were able to hold the 21dma 2 days in a row and are now above the support area. Also notice that we were able to hold the lows from the first area retest, this is constructive.
Alert - DTL + 39.5$
REFERENCES
Articles on my system:
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