Good evening folks,
Well, I am quite disappointed by today’s action. not so in the general market as it was to be expected we would find some resistance at these levels, but recent leading names that were decoupling for a few days/weeks were not able to hold their Friday breakout.
Let’s see what the market has in store for us.
Let’s go!!✌️🛡️
MARKET REVIEW
The market gapped up this morning and tested the 12168$ resistance area & the 50dma as well. We were never able to push above it and found good selling this afternoon to close the day right in the kma’s.
As you’ll see in tonight’s letter, we are really in an indecision zone IMO. We have bullish & bearish messages at the same time. It’s okay, we’ll have to wait and see which side we resume. Either we build for a couple of days right under the 50dma and breakout, or we undercut the UTL & 11794 support area and rollover from here with a potential 3rd leg down.
The fact that we rejected the 50dma & resistance area does not really concern me, as I was prepared to follow leading stocks that were decoupling from the market recently & let the market do its shenanigans. But these names were not able to hold their ground and came back hard to their entry pivot.
So, I’ll keep my scenarios wider a bit again tonight to let the market consolidate and decide which side it wants to go next. Anyway, there are no stocks with good R/R setups worth watching for tomorrow, so it will be easier to stalk the market while he’s making up his mind.
Alex’s digest:
We are in an indecision spot right now with the market waiting for a direction below the 50dma/resistance and right above UTL/support.
Leading names failed their breakout with pretty nasty squats (-)
NQ rejected 50dma & resistance area (-)
NQ Still above 5,10,21 dma & above UTL/support area (+)
XBI (biotech) leading sector failed his BO10PB/BORS setup today (-)
Market breadth is still holding (+)
Speculative money seems to be waking up (GME, AMC, Crypto) (+)
USD & VIX are staying down for now (+)
2Y & 10Y bond yield seems to want higher, which would put pressure on growth stocks (-)
No setups tonight (-)
Crude oil (CL_F) getting strong & finding support (-)
A beautiful mixed bag of (+) & (-)… hence the indecision right now
Bullish scenario:
IF:
CLOSE above 50dma & 12168/12262$ resistance area
THEN:
Add long exposure with respect to Progressive Exposure & Market based Exposure
Bearish scenario:
IF:
CLOSE below 11689$
CLOSE below UTL
THEN:
Close long if red flags and SL hit
MARKET BREADTH
We had WAY MORE 1M NNH today & still 52W NNL. We also saw a positive Net adv/decl & the stocks above their 50 & 200dma held again today.
MMFI (Stocks > 50dma) - We tried to breakout here today but came back in right inside the consolidation zone. Is this only a breakout retest, or a failed breakout? Tomorrow will tell.
VIX - VIX found support today at the 24/25$ support area and we close mid-range with an inside day. We want to see a break below that support to confirm a potential bounce on the indices and stay below that DTL.
USD/CAD - We came back below 1.305$ for a failed breakout, but we also found big support at the LT base area & 50dma today. We closed in the upper range and above the 21dma. If we reclaim that 1.305$ level…no bueno.
HYG/IEI - We bounced hard at the 50dma & almost reclaimed the 1.59$ base level. We want this one to stay down and reject that level retest.
ECONOMIC CALENDAR
Now a big week on the economic news.
SECTORS PERFORMANCE
(SMH) Semis - Just like the market, they found resistance at the 50dma & resistance area above. Still above 21dma & 10dma.
(TAN) Solar Stayed in the wedge and got squeezed tight between those DTL & UTL
(XBI) Biotech This one is probably my biggest disappointment today. Biotech was clearly leading and was shaping up with a BO10PB & BORS setup at the recent support area. We failed to follow through and found resistance at the base top today before closing below the 10dma & making a lower low. We’ll have to see if we can hold 78.09$ recent swing low and find support at the 21dma.
LEADERS LIST
Overall leaders (PRIME Score)
CELH,DVAX,QURE,LI,CEIX,SWAV,ACET,DQ,EXEL,HRMY,SRPT,AMN,ARLP,OPCH,GTLB,JKS,CHK,VET,ELF,AGEN,
Fundamental leaders (FA Score)
MRO,AMR,HDSN,ARCH,SQM,NFE,OXY,LTHM,PLYA,METC,HCC,EPR,CPG,PXD,CAN,MXL,GSL,HST,HP,CF,
Technical leaders (TA Score)
TH,CEIX,QURE,CELH,ACET,ARLP,SRPT,LI,DVAX,OPCH,EXEL,JKS,SWAV,HIMS,ELF,BEAM,VET,AGEN,HRMY,DQ,
Relative Strength 1 Month (1M-RS)
IS,TH,QURE,AGEN,BEAM,SRRK,AFRM,ZLAB,RIOT,TSP,ARWR,CPNG,VCYT,AMC,GRBK,CEIX,ACET,GTLB,DVAX,SRPT,
Relative Strength 3 Month (3M-RS)
SIGA,TH,STKL,LI,DQ,YMM,CELH,PDD,HRB,DVAX,QURE,CD,AHCO,BEAM,VTNR,BKSY,ELF,PLAB,ABCL,GRBK,
Relative Strength 6 Month (6M-RS)
TH,SIGA,LNTH,CEIX,VTNR,HDSN,AMR,STKL,NFE,HRB,DQ,AR,CELH,OXY,PRCT,EQT,SQM,ARLP,ENPH,GLNG,
PT PORTFOLIO UPDATE
Position & Risk management:
As I am currently in a drawdown, I will adjust my position size until the market gets more healthy and we can see stocks hold their moves.
Position size: 1/4 position (5% EC)
Sell full position @ 5% gain
Alex’s FOCUSLIST
There is no name of interest tonight. I’ll manage my GTLB position and we’ll have to see if we can tighten up a bit and new names set up in the next few days.
That’s a good time to do other projects and go outside a bit ;)
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. :)
Thanks Alex. Reading the Prime Report is the first thing I do every morning!
Sincerely Brandon (BT).