Good evening folks,
Well, earnings & FOMC gave one hell of a kick in the butt to this market! Now let’s see if we can trigger my bullish scenario and follow through on this very positive day.
Let’s go!!✌️🛡️
MARKET REVIEW
The market reacted positively to MSFT & GOOGL earnings last night and that close below 12168$ & 50dma now looks like a shakeout. Market ripped back above the support area & the 50dma and mini channel DTL before closing above all kma’s and right below our 12655$ recent swing high pivot.
This is a very powerful day on which we saw very broad participation.
We still have a lot of work to do and many strong potential areas above, but that’s the kind of action, along with the leading sectors and stocks that will pull me in more aggressively in this market if we follow through tomorrow. Always with progressive exposure!
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 we trigger these conditions below though, I will be more aggressive on this rally.
IF:
The recent swing high @ 12655$ will be an important level to monitor to confirm a continuation of this rally by making a new price structure higher High.
THEN:
Increase exposure and play this rally more aggressively
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 12168$
CLOSE below 50dma
THEN:
Reduce long exposure and treat this reversal as a potential rollover
Alex’s digest:
Leading names are holding key levels & breaking out (+)
NQ with a big FTD reversal at key levels (++)
Good reaction on highly important FOMC & Jerome Powell speech (+)
XBI (biotech) & SMH (Semi’s) & TAN with big reversal & continuation breakout (+)
Market breadth reversal & continuation. (NNH,>50dma, etc) (+)
Speculative money back strong (Bitcoin) (+)
USD & VIX reverse at key levels & drift down (+)
2Y & 10Y bond yield holding important levels (=)
Crude oil (CL_F) reclaimed the DTL & support breakout (-)
MARKET BREADTH
MMFI (Stocks > 50dma) - Reclaimed recent swing high pivot. Continuation it is.
VIX - Gapped down right at 24.33$ level and drifted down all day, especially after FOMC. This is the rejection we wanted to see at this important level. This move on VIX really increases my conviction of a market follow-through on the upside.
USD/CAD - Rejected kma’s again and closed below the 50dma and at the bottom of the support area. This is the direction we want to see, let’s see if we can break below that area tomorrow, this would be very positive.
HYG/IEI (Credit Spread) - Rejected top of the support area. good.
BTC/USD (Bitcoin) - This is quite the reversal on BTC! Found support where it really had to… channel bottom DTL, larger UTL and ripped right back above the support area. We are now into the 50dma, but this move ON VOLUME really tells me that speculative money is getting back in this market again. We’ll have to follow through tomorrow, but this is very positive…
ECONOMIC CALENDAR
SECTORS PERFORMANCE
(SMH) Semis - Big reversal at the 50dma & support area as we broke out of our channel and went straight back to our recent swing high. This is a classic BORS setup that was completed with the 232.14$ pivot breakout. I’ve opened a small 1/4 position in SOXL to get exposure to that sector as I think this is one of the 3 leading sectors. Plan to add to that position tomorrow morning on a gap down, or a retake of 19.10$ on SOXL.
(TAN) Solar As expected, TAN ripped higher with a powerful DTL breakout right into that resistance area following ENPH earnings. We also saw another big gap up after market hours, so we should see the price open above that resistance area tomorrow morning. I’ll let individual names settle a bit after this initial thrust, but I will treat this sector as a leader again.
(XBI) Biotech - XBI continues to show tight action right above the support area. I really like how this leading sector (It was the first off the lows) shaping up for a potential continuation from here. Along this ETF, many of the leading individual names are shaping up for big breakouts. I have a feeling Biotech will have a big day tomorrow…
I opened a LABU 1/4 position right before the close today. I plan to increase it at open tomorrow and on a breakout of the 9.71$ pivot.
CL_F (Crude Oil) - After failing the first DTL breakout attempt, it found support again on that lower area to succeed with that channel breakout. Now we’ll need to see if we can follow through and breakout where we failed yesterday.
LEADERS LIST
Overall leaders (PRIME Score)
BEAM,CELH,VTNR,ENPH,HDSN,PLAB,PAYO,CPNG,TH,HIMS,VET,GRBK,SQM,YMM,LNTH,ON,LSCC,LPG,AHCO,DVAX,
Fundamental leaders (FA Score)
MRO,AMR,HDSN,ARCH,SQM,NFE,OXY,PLYA,METC,HCC,PXD,CAN,MXL,GSL,LBRT,HST,HUT,CALM,HP,CVI,
Technical leaders (TA Score)
TH,BEAM,ENPH,IEA,VTNR,PLAB,CELH,GRBK,CPNG,VET,PAYO,LSCC,HIMS,AR,LNTH,SEDG,HDSN,ON,EQT,AHCO,
Relative Strength 1 Month (1M-RS)
SI,RIOT,TH,HUT,IEA,AFRM,IS,COIN,CPNG,BEAM,SGRY,PAYO,APPS,CYH,BFLY,LPI,VET,CNK,TELL,MXL,
Relative Strength 3 Month (3M-RS)
SIGA,TH,YMM,BEAM,QURE,DQ,AHCO,STKL,DVAX,CELH,PLAB,ENPH,AGEN,PDD,ABOS,HRB,BKSY,IEA,VIR,ABOS,
Relative Strength 6 Month (6M-RS)
TH,SIGA,VTNR,CEIX,LNTH,HDSN,ENPH,CELH,NFE,DQ,STKL,EQT,AR,PRCT,HRB,AMR,SQM,IEA,QURE,CRK,
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Alex’s FOCUSLIST
HALO
This biotech name shows RS over RS… Low how we bounced at that support area last week and we were not even able to break below the 10dma today and found good support (volume a bit low though). Recent swing high would confirm my BO10PB setup tomorrow.
UPDATE: Break yesterday’s entry pivot but was not able to take the trade today. I will look at the first base breakout swing high (52.98) for continuation & entry.
Alert - 52.98$
SWAV
A health tech name that I follow for a while but was never able to breakout and follow through. I will be watching it again as it really refuses to break lower and hold the 10dma very well above that support area. 214.44$ first breakout swing high is the pivot I will monitor for continuation.
UPDATE: Tight & constructive day right below the entry pivot today, I keep the same alert
Alert - 214.4
CELH 🎖️
Leading name that I closed my position last Friday (mistake !!). We found good support today at the 80.35$ structure pivot and closed strong on a red day with an inside day. I will be interested to re-enter this name if we can close above 85.08$ as it would confirm my BORS setup.
UPDATE: Trigged the 85.08$ pivot today but closed right below it. I will really get aggressive with this name tomorrow if we can breakout of that pivot again. I like the wedging action higher on VCP characteristics…
Alert - 85.08$
HDSN
This one has incredible fundamentals and we just completed a WBPB setup with this support area retest. Swing high out of the wedge breakout will mean a continuation, so that’s where I’ll set my alert. Note that this is only for a quick swing, because ER are in less than a week.
Alert - 8.48$
BEAM 🎖️
One of the strongest names off the lows is now set up with a beautiful BO10PB setup. This just had a 150% run in a month or so… so when I see this type of strength and the stock gives the first opportunity to get in with a lower risk entry at the 10 or 21dma…I go aggressive for the jugular.
Alert - 70.49$
🎖️ = Alex’s highest conviction setups
REFERENCES
Articles on my system:
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Hi Alex, reading what you read about SOXL. Can you eloborate on "Plan to add to that position tomorrow morning on a gap down". Do you have any key levels for that gap down? Where do you put yuour SL if you add on the gap down?
Cheers