Tonight will be a quick market update, as today’s marked a turn & change in character that put me instantly on the short/defensive side.
Keep in mind that we’re always one day away of a complete change of view on the current market. Yesterday, price action was telling me that there were good probabilities that we were going higher, then today’s action totally negated this scenario and flipped the view 180deg.
That’s trading, if you don’t bend and listen to the market, you’ll be rolled over.
Enjoy ! ✌️
Disclaimer: This newsletter is not financial or investing advice. The information is for education purposes only and reflects only my own operation.
Market REVIEW
Today’s was a nasty reversal that negated the scenario I was betting on. We rejected very hard both 4524, 4475$ pivot & 50dma back to the 4387$ level that we even breakout after hours.
This reversal completely flip my view on this market. We were not able to hold any levels and selling was so strong and steady all day long. Also, we rejected very important levels we had to hold for this bullish scenario to play out.
Now, I think path of least resistance is down, so I’m looking again at 4277 level for a potential support down.
Breadth:
VIX up a whopping 12% @ 22.68$
McClellan back negative again, we have room on the downside to slide
Both new 52w net H Not a good day here as well
Big Adv/Decl Awful day, more than 2000 decliners
Overall, poor breadth confirmed the move down today.
Sectors:
Not a single sector closed green today. What really really troubles me is the destruction we saw today in names that were holding the general market recently.
If Metals, Fertz, Energy, Cyber, Oil names really breaks down, I think the market won’t be able to hold anymore.
These names cut through pretty important levels such as the 21dma today which I used to trail my last core positions.
Semi’s seems to fail the U&R highlighted few days ago by rejecting the 21dma hard.
Portfolio UPDATE
As explained, overall very rough day as recent leading sector got smacked and I had to flip my market view 180deg.
That’s why I close every core positions left on the 21dma break and switch to the short side as breadth, individual names & indices were confirming that something was really wrong in this market.
New positions:
SRTY (Russel 2K short. This indices was the weaker of the majors)
Trimmed positions:
Closed positions:
SPXL (Market action did not confirmed bullish scenario)
TECK (pivot failed)
CF (21dma undercut)
MOS (21dma undercut)
PANW (21dma undercut)
BTU (21dma undercut)
TELL (21dma undercut)
SLCA (21dma undercut)
Daily FOCUSLIST
No names will be on FocusList tomorrow. I want to close the week watching the action confirming the bearish scenario or reclaiming the 50dma before focusing on adding long exposure again.
Initial Stop loss is always placed at LOD (Low of Day) of breakout candle.
REFERENCES
Articles on my system:
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Hi Alex, on your table "ST Cycle Length (days)", is this some periodic function of what? in the market ? The SP? And if so, do you have to manually count or there is some method that calculates it? If its a manual thingy, anywhere i should look for education? Thanks! George