Good evening folks,
Hope you had another great day, as this week gave us a lot of opportunities! Let’s see if this will continue or not.
Let’s go!!✌️🛡️
MARKET REVIEW
That was a very interesting day, with a lot of conflicting signals!
Individual leading names acted well with a few very good moves
NQ failed to complete the BORS setup of that 12945$ prior top base from the end of May rally.
NQ got slammed down on volume in the attempt to breakout of yesterday’s high
As indices were already quite extended, I got very defensive at the end of the day and decided to close a lot of exposure waiting for more clarity, to see if we can find support or at least consolidate a bit to let KMAs catch up.
If it’s only a countertrend rally within the bear market, then we could be at a potential top. But if we really saw the indices bottoming last month, then we should find support quickly and continue higher. Which one it is? That I don’t know but will be open-minded in the next few days. It will be decisive…
On the downside, I want to see NQ hold the 12801$ level along ideally the 5dma. We might get 1-3 days of consolidation above or a bit in that support area before finding more support to push higher.
On the upside, the next level I’m watching is 13184$ which is the next potential important resistance area. That’s a 2% 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. 🛡️
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:
If we can’t hold today’s low @ 18815$ or 1801$ pivot, I will try to open a short (SQQQ) in anticipation. If we reverse at the 12655$ level, then I will cover, but if we slice through I will have a better entry on a potential SQQQ trade.
Reduce long exposure and treat this reversal as a potential rollover
MARKET BREADTH
MMFI (Stocks > 50dma) - By looking at the action closely, that’s the second time today that we reject the 66.60$ march rally high level. Yesterday on the gap down, and today on the EOD selling. This level offers some resistance and I would not be surprised if we pullback from here today.
VIX - Ok this one spooked me today. A pretty big 5% gap up right above the DTL and also UTL. We then tried to breakout of the 24.33$ level but were not able. It even filled the gap and spiked again EOD. That’s not the kind of action I want to see on a slow market pullback, this is more toppy action. We have to stay below that 24.33$ level if we want to continue that rally IMO. Important pivotal day tomorrow.
USD/CAD - Another one which I don’t really like the look. We found support at the bottom of the area and broke out of the DTL AND close above the 50dma. We want this one to stay down and potentially reverse down, otherwise, this will begin to be worrying.
US10Y (US 10Y bond yield) - Bond yields were drifting down for a few weeks now, even breaking below an important support area yesterday, to finally having a big reversal day to close right above that area. This is a very strong shakeout and not very good for growth stocks in general.
10Y peaked on June 14th, 2 days before the current ST market cycle low. This drift down was really helping the positive action on NQ from the lows. Now it might act as a headwind again.
HYG/IEI (Credit Spread) - Nothing to worry about here.
BTC/USD (Bitcoin) - Was not able to close above DTL and rejected the 50dma again. Struggling to reclaim that 50dma is not good.
ECONOMIC & EARNINGS CALENDAR
SECTORS PERFORMANCE
(SMH) Semis - 2nd day in a row we are not able to breakout of Friday’s high pivot.
(TAN) Solar - Was able to find support at the 5dma today. Extended, but still acting very strong. $SEDG disappointing earnings might weigh on it tomorrow.
(XBI) Biotech - XBI save the consolidation area breakdown today as it rallied from the 50dma and closed above the 21dma. This is really good action from one of the recent leading sectors. If this takes back the lead while SMH & TAN take a pause, this could really support the market.
CL_F (Crude Oil) - Tried to reverse from the support bottom level without much success today. 10dma rejected it and we almost closed unchanged.
Alex’s TAKEAWAYS:
Leading names still acting strong, but they seem tired at these levels (=)
NQ failed BORS & high volume failed to move higher (-)
SMH (Semi’s), TAN & XBI consolidating (=)
Market breadth retest seems to hit resistance and is tired. (NNH,>50dma, etc) (-)
Crypto consolidating but rejected 50dma (Bitcoin) (=-)
USD & VIX spiked up (-)
2Y & 10Y bond yield big reversal above support (-)
Crude oil (CL_F) broke DTL and selling pressure was high. Now back to support area bottom (+)
LEADERS LIST
Overall leaders (PRIME Score)
HDSN,CELH,TH,ENPH,IEA,SQM,VET,PLAB,SIGA,NFE,SEDG,STEM,VTNR,AHT,HIMS,BEAM,GRBK,LPI,AIV,INSW,
Fundamental leaders (FA Score)
MRO,AMR,HDSN,SQM,NFE,OXY,LTHM,LC,PLYA,METC,LBRT,HCC,JXN,PXD,CAN,DINO,GSL,FANG,HST,HUT,
Technical leaders (TA Score)
TH,ENPH,IEA,CELH,PLAB,HDSN,SEDG,SIGA,VTNR,VET,SQM,HIMS,GRBK,STEM,FRO,NFE,LPI,BEAM,AHT,TWI,
Relative Strength 1 Month (1M-RS)
IS,RIOT,TH,CORZ,SI,HUT,IEA,ENPH,AFRM,COIN,VET,LSCC,LPI,SLCA,STEM,TALO,INDI,GFS,X,INSW,
Relative Strength 3 Month (3M-RS)
SIGA,TH,CELH,AHCO,ENPH,STKL,PLAB,HRB,IEA,QURE,DQ,DVAX,BKSY,STEM,BEAM,HIMS,GFF,SEDG,ELF,HDSN,
Relative Strength 6 Month (6M-RS)
TH,VTNR,SIGA,LNTH,CEIX,HDSN,NFE,ENPH,CELH,PRCT,EQT,AMR,SQM,STKL,PBF,AR,ARLP,TWI,CRK,HRB,
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