Good evening folks,
That was quite the weak week open! We were seeing some very nice action in specific groups and individual names lately, but today for me was a clear change of character as you will see in tonight’s letter.
Let’s go & defense first!✌️🛡️
MARKET REVIEW
Well, we were not able to claim that 50dma & prior swing high of 12 262$. Today, we trigged my bearish scenario by closing BELOW our channel DTL and kma’s (NQ, but not on QQQ), so I turned very defensive as you’ll see later.
We have very important CPI inflation data to be released Wed, which should move the market one way or the other, so it’s very possible that tomorrow we chop around waiting for that print. I will be looking at our very important support area around 11689/11794$ for potential support tomorrow, but if we break lower of this, we’ll be in trouble IMO.
We still have our UTL working up from our recent 2 past structure swing low that could act as potential support.
We are still in a downtrend, playing a reaction rally, so keep in mind that this market can roll over any time even if we have good traction on the long side right now.
Bullish scenario:
I will wait until tomorrow night before CPI data to confirm any bullish scenario, as tomorrow I will not be looking to open long exposure right in front of this economic release.
IF:
THEN:
Bearish scenario:
We are already in my bearish scenario. If we reclaim the 11975$ recent resistance area tomorrow tough, I will probably cover my short in front of CPI data.
IF:
THEN:
MARKET BREADTH
We had 1M NNH on NDX but NOT on NYSE today, that’s a change of character. I don’t like to see negative A/D AGAIN TODAY… This was a signal last week with those negative A/D while the market was climbing on low volume.
VIX Today’s gap-up was far from ideal and really broke my expectations for a possible oops reversal at the open. That was quite the open being up 7%. To have a chance at a market rally, I wanted to see it trend down steadily, not gap up like that. This one worries me.
USD/CAD We finally found great support at the 10dma and rallied hard to even retest the resistance area. Pulled back a bit EOD, but we seem to continue this move up on futures. If we breakout of that red area, this is a clear risk-off signal.
ECONOMIC CALENDAR
SECTORS PERFORMANCE
Recent leading sectors took a hit today with Solar being the weakest. We saw some names in biotech & health care holding very well and confirming that these stocks might have bottomed whatever the market does next. If we get another market leg down, I will look for these names to create nice technical setups in the next few days/weeks.
(SMH) Semis We held the support area I highlighted last night. We have not lost it all..!
(TAN) Solar found resistance in the resistance area I was talking about but also failed to breakout from the most recent swing high pivot and came right back into the wedge formation. Now we want to see if we can find support at kma’s.
(IBB) Biotech with a rejection of the 126.73$ level today. So far, holding the 5dma which is quite impressive. Still leading sector and even a PB to the 10dma or a retest of the 122.80$ level would be very constructive.
LEADERS LIST
Overall leaders 40/60 (PRIME Score)
LI,HRMY,SIGA,DVAX,STKL,CEIX,AMPH,AMN,CELH,QURE,DQ,EXEL,CALM,LNTH,ACET,JKS,ABCL,HRB,HALO,SRPT,
Fundamental leaders (FA Score)
MRO,AMR,HDSN,ARCH,SQM,OXY,LTHM,PLYA,DDL,METC,HCC,CPG,PXD,MXL,HST,HP,CVI,GSM,CF,SHO,
Technical leaders (TA Score)
SIGA,HRMY,STKL,CEIX,QURE,LI,AMPH,CALM,DVAX,ABCL,ACET,JKS,CELH,AMN,HALO,HIMS,LNTH,SRPT,ELF,FUTU,
Relative Strength 1 Month (1M-RS)
SRRK,AGEN,QURE,CCCC,BEAM,VCYT,ZLAB,CDMO,ACET,HIMS,ABCL,VIR,ARWR,AMC,CFLT,FLYW,ME,PTGX,GTLB,SNOW,
Relative Strength 6 Month (6M-RS)
LNTH,SIGA,VTNR,HDSN,NINE,CEIX,DQ,HRB,OXY,STKL,JKS,PBF,CELH,CVI,EGY,HRMY,BORR,AMR,SQM,ARLP,
PT PORTFOLIO UPDATE
Alex’s FOCUSLIST
HRMY
That’s a leading stock, and I will be looking to enter on my classic BORS setup. We could need a couple more days to consolidate, but leading stocks like that could find buying really fast too.
You’ll see that I’d mark the pivot on a lower timeframe here (65min) as the more meaningful pivot was from the initial thrust on that base breakout. We consolidated for a few hours before trying to breakout and failed.
UPDATE: We retested the 5dma today and found good support again and closed right below the 55.14$ pivot. We are building very constructive action above the support area.
Alert - 55.14$
GTLB
I will look at GTLB for a possible re-entry after taking it off. I am seeing yest’d & today action as a retest of the breakout level, creating a nice BORS setup. I will be looking at 59.34$ recent swing high pivot for the setup confirmation.
Be careful this one can move really fast.
Alert - 59.34$ + DTL
ARLP
I am looking at ARLP for his strength, but also because I think Coal commodity chart is looking like a big VCP pattern ready to breakout hard. I see ARLP as a BORS setup with the 19.35$ entry pivot that I shared recently. We were also supported by the 5dma. I will be looking at yest’d high for a continuation confirmation & entry.
Alert - 20.24$
REFERENCES
Articles on my system:
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Hi, the earnings table you have in the GTLB and HRMY chart, what´s the name of that indicator in Tradingview?
cheers