Disclaimer: This newsletter is not financial or investing advice. The information is for education purposes only and reflects only my own operation.
What a day!
Market gapped up above Friday’s high and was able to stay above it after a quick retest of the level this morning. Then market tried to retrace during JPow speech, but again they bought the Friday’s high level heavily to close >2% higher on the session with a higher volume than yesterday…confirming the FTD.
What Is A Follow-Through Day? | Investor's Business Daily (investors.com)
On Day 4 or later of the attempted rally, the Nasdaq or S&P 500 must deliver a strong gain in volume up from the previous day. That big gain in rising volume is the follow-through day, which confirms that a new uptrend is underway.
A follow-through day can't pick the exact day that a market bottoms, but it can get you in close to the bottom.
Go back in history, and you will find a follow-through day early in every major market uptrend.
We’ll now enter in the crunchy part, as we’ll have important overhead levels pretty much every day, so we’ll have to be alert to a potential market rollover scenario. Tomorrow I’ll be watching first 4104$ level that we’ll have to breakout. Then SPX 4140$ level seems to fit with a 21dma retest as well, so watch these levels closely tomorrow.
On the downside, if we break below the 10dma, I think we’ll have problems.
Overall, pretty positive action and this rally seems to play out. Let’s grab that opportunity, but stay very quick on your feet.
Breadth confirming the price action today!
Except for NDX new highs, every other metrics I track were all very positive. Net advances at +1600, Stocks above 50dma jumping almost 40%!
On top of it all, VIX dropped another 5% today and now @ 26. 25$ is a pretty important level on VIX normally, so we’ll have to see how the market will react if we reach that level tomorrow.
Nothing of importance tomorrow.
That’s the kind of picture you want to see on a FTD. Broad market participation.
Clean Energy, Solar, Semi’s leading the day. I don’t have any names on my radar in these sectors yet, as they’re all pretty beat up and just starting to breakout 50dma’s,etc. We’ll have to wait to see the right side tighten before getting some names in the scans.
CL_F gapping down below 111.37$ pivot that we breakout yesterday. Not the best action here as I would have think we would have more strength today.
As I explained yesterday, a breakout of Friday’s high would keep me engaged and ready to add exposure as market was confirming his strength.
I added my 2 new positions this morning before Jpow and carried them on the news as I had a very good cushion on both already. If Jpow would have crash the market, I was out breakeven.
New positions:
EQT - Bought the position on the DTL alert confirming the WB setup.
CELH - I bought this position off the weekly FL. I had my WB last Friday and when I saw that we pulled back to the DTL right when SPX tested Friday’s high and rallied, I took this BORS entry on the larger WB setup.
SPXL - Also added another 10% position on the Friday’s high retest this morning. Now have my full indices position that I like to play as a core position during a market rally.
Trimmed positions:
Closed positions:
5 names in the FocusList tonight. Coal stocks as a group seems to really want higher after a few weeks consolidation. Overall, we’ve yet to see other sectors stocks above their 50 & 21dma, so we’ll have to wait few more weeks probably to see more traditional Growth stocks in the FL. For now, these Energy / Chemicals / Transportation / Retail, etc. stocks are leading this market.
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