Good evening folks,
Hope you had an amazing weekend and were able to recharge this energy to kill this trading week!
Now let’s get ready for tomorrow!✌️🛡️
MARKET REVIEW
The market got spooked by the Job economic release Friday morning and sold off on the news. It held important levels though, as we found support at both the 5dma, 13108$ previous structure high CLOSING above 13184$ which is positive overall despite the red day.
It shows us that the market is being supported again on bad news and we don’t roll over as fast as we were in the last few months.
Now it’s only the first red day, we might be looking at some sort of pullback or consolidation. That’s what I will be looking at in the next few days.
What are the levels I’m watching tomorrow?
On the upside, I now want the market to break out of the new mini channel DTL we created with Friday and futures open and also retake now last swing high 13356$ pivot. This would indicate a potential continuation higher.
On the downside, I want to see NQ hold the 13108$ resistance bottom level. If we can hold the 5dma, this would be very bullish. I want to give some room to this market to consolidate above these levels.
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
MMFI (Stocks > 50dma) - We retested the 66.6 level and it got defended pretty aggressively. This was the level I wanted to see hold as it was March rally high. This is quite constructive and positive.
VIX - Tried to rally on the market selling off, but got smacked down at the 10dma and even closed red. That’s a divergence I’m taking note of. We even closed below the recent swing low of 21.21. Trend is still down.
USD/CAD - Kept his gains from the reversal at important support. We don’t want it to spike to high.
US10Y (US 10Y bond yield) - Could still act as headwind for growth stock if it continues to raise IMO.
HYG/IEI (Credit Spread) - Not confirming a selloff. Rejected the retest of the support area.
BTC/USD (Bitcoin) - Kinda breakout of the mini channel DTL and now we see the retest of it. Nice coiling action and it refuses to go down. I see this action as being positive.
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
(SMH) Semis - Found resistance again at 246.76$ level Friday and made a lower high. We could need a couple of consolidation days in this sector. Some leading names are pretty extended.
(TAN) Solar - Breaking out of wedge but found resistance at recent swing high. We could see couple days below this level before a continuation breakout.
(XBI) Biotech - And yet another powerful push out of the consolidation area on increasing volume. This sector is really THE leader. Too bad I missed the LABU entry…
In addition to these sectors that lead for a few weeks now, I see for the first time in a long time many big sectors breaking out of stage 1 bases and even retested these areas with success on Friday. If we can have more sectors participating in this market while recent leaders are consolidating, we are not just looking at a short rally IMO, but the start of something more serious.
This is getting really interesting folks…
(CIBR) Cybersecurity - BORS at stage 1 base breakout
(FDN) Internet - BO5PB at stage 1 base breakout
(IGV) Software - BORS at stage 1 base breakout
(XME) Metals & Mining - LT wedge DTL breakout. Might push couple days and consolidate a bit.
(XRT) Retail - Attempting stage 1 base breakout
(XLE) Financial - Stage 1 base breakout already and trying to push out of tight consolidation. Kind of a Base on Base setup.
Alex’s TAKEAWAYS:
Friday, I was a bit worried that the market would find resistance at this important area and rollover, but seeing these 6 sectors, and market breadth acting very constructively out of stage 1 bases, I think we could see a minor pullback in this market and continue higher.
How much higher or higher at all? That I don’t know, but that’s what I’m seeing right now. I’m open to anything and will adjust with what clues the market gives us!
LEADERS LIST
Overall leaders (PRIME Score)
TH,SIGA,AHCO,BBIO,ENPH,AHT,CELH,PLAB,STEM,CHPT,SQM,NOVA,WMS,DVAX,AIV,SPWR,CSIQ,QURE,GRBK,AMC,
Fundamental leaders (FA Score)
AMR,MRO,HCC,SQM,DK,DVAX,MGM,DRH,TELL,METC,LBRT,ENLC,JXN,LC,TRGP,CAN,MPC,DINO,AHT,FANG,
Technical leaders (TA Score)
SIGA,TH,ENPH,AHCO,BFLY,STEM,YELL,PLAB,SPWR,NOVA,BBIO,CSIQ,WMS,DCPH,AMC,AHT,GFF,CELH,CHPT,RUN,
Relative Strength 1 Month (1M-RS)
YELL,CORZ,STEM,SIGA,SI,COIN,BFLY,PLUG,ENPH,IS,RIOT,HUT,TH,WMS,MELI,SPWR,CHPT,SLCA,TALO,LYFT,
Relative Strength 3 Month (3M-RS)
SIGA,BFLY,AHCO,CELH,TH,BKSY,DVAX,ENPH,BEAM,YELL,QURE,FGEN,DCPH,BBIO,STEM,ELF,RXRX,STKL,SWAV,AMC,
Relative Strength 6 Month (6M-RS)
TH,SIGA,LNTH,VTNR,CEIX,HDSN,NFE,ENPH,CELH,DCPH,PRCT,EQT,CRK,STKL,DQ,HRB,AR,ARLP,SQM,NOVA,
PT PORTFOLIO UPDATE
Tomorrow’s game plan:
If the market gap down tomorrow morning, I will watch closely which stocks show RS and concentrate on those.
I will try to open one position and see if I get traction before putting more exposure. I want to really use progressive exposure at these levels as we are still in an important potential resistance area.
Alex’s FOCUSLIST
CHPT
EV chargers co. that I closed my position Friday (mistake) but I will look to re-open my position as we are still looking at a potential stage 1 base breakout after very positive and strong action Friday. I will be looking at the recent swing high pivot for a continuation confirmation.
Alert - 16.19$
VIR 🎖️
A biotech stock that I trade on the first breakout leg out of stage 1, but now that it consolidated back to the 50dma and breakout area and it cleared ER, this is shaping up for a potential continuation and a second leg up. I will use the 30.59$ pivot as I’ve missed the last swing high of the consolidation.
Alert - 30.59$
CEIX
Coal name setting up for a BORS setup on base top area right after ER. I like the 2 big volume days while the Coal commodity was pretty weak. It means investors continue bidding on this name for a potential run higher despite commodity weakness. I will play that Thursday high as a pivot for confirming the continuation move higher.
Alert - 63.48$
HDSN
A name with great fundamentals that just had ER last week and got bought pretty strongly on that ER reaction. It found support at the 50dma and Friday action really brought it back into the resistance area. I will be looking at the 9.79$ pivot (recent swing high on the first breakout attempt) for a continuation and second breakout attempt confirmation. Nice shakeout.
Alert - 9.79$
SOFI 🎖️
Very strong 28% PEG on ER and we are now getting back to test the support level on light volume in the last 2 days. I like how this name acts on that retest and the #’s they reported as well. I will try to buy the reversal on that BORS and especially try an anticipation entry off the DTL breakout.
Alert - DTL + 8.26$
🎖️ = Alex’s highest conviction setups
REFERENCES
Articles on my system:
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