PrimeTrading daily Update & Focuslist - 05/06
Disclaimer: This newsletter is not financial or investing advice. The information is for education purposes only and reflects only my own operation.
Well well… I did not expect such a wild move even though I knew we were still in a downtrend and below 50dma. That’s exactly why you don’t bet the house on what you “think” is the bottom from a key level. Always start small & build on your profits. (progressive exposure)
SPX opened already weak already below 4277$ level that didn’t hold pre-market. Then heavy selling came right at the open and we were not able to hold the 10, 5dma and 4220$ level early in the session.
We even retested to the tick the Feb. 24th low (4104$) but did not undertake Monday’s low, so we’re still on day 4 of a potential rally (lolll right)
We finally closed the day into support area above 4138$ important level.
Personally, indices wise, it's a wait & see situation here. We are at key levels on SPX with wild swings in the last 2 days. We're extended on the downside so shorting here is a pure gamble and no reason to play long these levels without proper setup & tightness.
Patience
Ugly Ugly Ugly
There is simply no positive in market breadth today, confirming the very nasty reversal.
VIX re-took yesterday’s losses, Stocks > ema and Net Declines all very deep in negative & rejected key attempted reversal.
McClellan reversed hard into negative after a quick positive endeavor.
Honestly, nothing good when you see breadth that try improved, getting smacked in the face like that. Tomorrow, we’ll have to see if momentum on the downside continues.
Tomorrow we’ll have 2 pretty important economic news before market open. NFP & Unemployment Rate at 8:30. Be aware, this could move futures right before open, specially if they come out worst than expected.
Tonight’s I wanted to see if last cycle leaders, were holding up or not. Because if these leaders that tried to reverse a their 50dma and even Oil stocks making new highs recently, that could really accelerate the selling if they can’t hold the market like they did in the last cycle.
CL_F (Crude oil) not able to follow through today got me worried as this is probably the last really strong sector.
Metals, Fertilizers, etc. also had rough days & nasty reversals. So, we’ll know more tomorrow, but for now these leaders seems to beat the dust like the rest.
I was within my progressive exposure rules, but still this nasty day hurt me here. I’m still green on the week, but a large part of my gains just vanished as market was not able to hold yesterday reversal.
I don’t plan to make much tomorrow as we’ll have too see where we head to market wise. We are last day of the week tomorrow, and we just had 2 very wide day making it hard to defining risk here.
New positions:
Trimmed positions:
Closed positions:
TNA ( Closed on the 5dma breakdown)
EQT (Closed on the 5dma breakdown)
PBF (Closed on the 5dma breakdown)
LNTH (Closed on the 5dma breakdown)
Nothing in the FocusList tonight. I really want to see how we close the week before seeing if it’s worth committing capital to strong stocks in strong groups or simply stay on the sidelines.
Also, honestly, nothing of interest in all my scans tonight.
I’ll start tracking top fundamental stocks with highest 6 months Relative Strength, holding up the best short term. (40% 1M-RS + 60% 6M-RS ratio).
During market correction, you want to keep track of these names as they will be the one to watch when conditions improves.
Relative Strength - TOP 20:
AMR,CEIX,ARCH,PBF,LNTH,CRK,AR,ARLP,CVI,VLO,DK,SD,EQT,CVE,SBLK,CTRA,REI,GOGL,TALO,VAL
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