Alex's daily Market update & Focuslist - 01/21 Major indices to new highs! JAN 21

Good evening! Friday was strong price action, with the Nasdaq & S&P 500 breaking out to new highs, while the Russel 2k confirmed the reversal. We had the continuation breakout we were looking for last week, but we still haven’t seen the broad market confirm the end of the pullback yet, as the Mega & Large-caps stocks mainly lifted the major indices lately. So far, this rally attempt was due to a short-term oversold condition. Still, we’ll have to see in the next few days if this is only a technical rally and the broad market pullback continues for another leg lower, or the broad market will catch up to the major indices. We have good tech leadership with semiconductors, software, AI, cybersecurity, and cloud computing breaking out to new high. Those are the sectors you want to see lead in a good bull run. If we can also have the bond Yields & US$ (DXY) backing off this week, it could fuel the broad market rally with a potential new high in view. I’ll be watching closely how the sellers/buyers step in on the first stress test of this rally attempt. We want to see low selling & aggressive buyers coming in to defend the rally. Day by day, level by level. Alex ✌️ Tonight’s daily report content PrimeTrading Market Model #PTMM + Takeaways General Market Analysis: NASDAQ - S&P 500 - RUSSEL 2K - OTHERS, including my daily levels & my bullish and bearish scenarios Market Internals Sectors & Themes Analysis Daily Focuslist including setups, alert levels & explanation (long & short) Leaders list + Scans (technicals, fundamentals & potential TMLs) My Portfolio Update Economic Calendar Get 10% off for 1 year PrimeTrading Market Model #PTMM + Takeaways PTMM is on a RED market signal (🟥) Key Takeaways: The 5-day ratio confirmed the hook-up with a follow-through and higher low there. The 10-day ratio flipped positive. NNH jumped - good! MT_momo rounding and tried to hook up on Friday Price is back-testing the declining 21dma - we have to look for potential resistance or a reclaim. MCSI continues to round up, and we could see a potential hook-up early this week if we follow through on that bounce attempt. I’ll be watching closely how the sellers/buyers step in on the first stress test of this rally attempt. We want to see low selling & aggressive buyers coming in to defend the rally. PrimeTrading is a community dedicated to equity swing trading, providing a collaborative environment for learning and active trading alongside seasoned and knowledgeable traders. Enhance your skills as a trader by adopting a risk management-centric approach, working closely with me in real-time throughout the intraday trading sessions. ✅ Intraday Live Execution of My Trades Experience & learn of live intraday trading as I share real-time insights into my execution process. 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Alex 🛡️✌️ Subscribe to DISCORD here GENERAL MARKET ANALYSIS S&P500 (ES_F) We triggered the bull scenario last week with the 4830$ pivot breakout on Friday, as we made a new high and continued the uptrend. We’ll still want to see a follow-through and/or a successful retest of that pivot, but this is still a decisive action for the bull case. We are now in uncharted territory, so we’ll take it day by day, week by week, and monitor how the uptrend develops and how healthy the pullbacks are. NASDAQ (NQ_F) We also confirm the breakout to a new high on the Nasdaq with Friday’s 17165$ pivot breakout. Here, as well, we are now in uncharted territory, and we’ll have to monitor how pullbacks are handled if we follow through and see this uptrend pick-up speed. RUSSELL 2K (RTY_F) Small-caps are lagging and pulled back more than major indices, ES/NQ. We made an official reversal with Friday’s action after making higher lows right at the 1907$ pivot & 50dma earlier in the week. We are still below the declining 21dma, so we’ll need more work and need more confirmation for this area of the market. We’re gonna have more overhead resistance, and will probably be a more volatile trade. That’s an area that I’ll look more closely this week to assess how the breadth can broaden out and follow the large/mega-caps or not. Day by day, level by level. Market Internals Market Breadth & Extension (Stocks > 5, 20,50 & 200dma - short to long term view) ST breadth confirmed Thursday's hook up with a follow through on Friday. 5-day already > 50, so stress-test might be in store if we get OB there. 20-day still have good room above. MT/LT breadth still elevated & extended VIX (Volatility S&P 500) Good rejection from the 14.49$ pivot and new low back to the UTL on Friday. Good action on the VIX. MOVE (Merrill Lynch Option Volatility Estimate - Bond market volatility) MOVE rejected at recent swingL pivot and confirms the downtrend with a new low on Friday. This might be a good clue for the Yields to cool off from here. Less volatility is expected. 10Y Bond Yields (daily) Spot to watch for a rejection and potential downtrend continuation. That would be good tail wind for stocks. US dollar index (DXY) Looks ST toppy and due for a downtrend continuation. Would be good for stocks. Credit Spreads (IEI/HYG) Confirms the channel breakdown on Friday - no red flag…and a pretty good risk-on signal. BTC/USD (Bitcoin) Breakdown from the UTL structure and we are now retesting it. 38k retest is possible if we don’t reclaim it. SECTORS & THEMES ANALYSIS Semi's leading Strong day for Reg./B + Banks. Potential reversal into next week. One sector to watch AI + Software + Cloud is leading sectors to focus along semis. Leading themes charts (rank sorted): 1 Semiconductors SMH New high - leading 2 Software IGV New high - leading 3 Uranium URA Still pulling back on lowering volume. Constructive. 4 Cloud Computing SKYY Breakout to new high - leading 5 Internet PNQI Breakout to new high 6 Cybersecurity CIBR Close to new high, but still leading theme to be in. 7 Homebuilders XHB Clear VCP consolidation here with a potential breakout to new high this week. 8 Artificial Intelligence & Technology AIQ Close to make a new high breakout. 9 Property & Casualty Insurance KBWP New high. 10 Networking KNCT Sectors & Themes ideas (weekly): Sectors & Themes are looking good this weekend. We have our new leading themes that are looking strong for follow-through and continuation: SMH (Semis) KNCT (Connectivity) IGV (software) SKYY (cloud) KIE (insurance) AIQ (AI) CIBR (Cybersecurity) PNQI (internet) Themes that were pulling back and look very constructive for a strong week & potential continuation breakout: BJK (gaming) SEA (shipping) NXTG (5g) PXJ (Oil & Gas services) EATZ (restaurant) CARZ (EVs) PEJ (leisure & entertainment) PSP (private equity) PPA (aero & defense) XHB (Homebuilders) URA & KBWP still extended but strong Overall, that's a solid setup for the week ahead. Nothing is guaranteed, but that's the leadership & weekly themes charts I like to see. FOCUSLIST AFRM daily/W/65m - Affirm Holdings Inc - Alert: 42.2, SL: 39.44 Tight pullback to the 10wma in the last few weeks after being really, really extended from the stage 1 base breakout. We digested that move on surprisingly low volume and looks very healthy to me. This tight wedge is looks really well for a potential power move from the 21dma reclaim. I like that name that did well for me at the end of 2023...let's try to catch that second wave now. MNDY daily/W/65m - MONDAY.COM LTD - Alert: 196.99, SL: 190.9 Still building that tight handle above all kma's and the 6 months base level. Looks very constructive with IGV theme breaking out to new highs on Friday. One to watch closely. Bigger the base...higher in space 😉 RPD daily/W/65m - RAPID7, INC. - Alert: 55.17, SL: 54 Still building in that tight range above that stage 1 base level. 55.17$ pivot is the line for that low handle breakout that could confirm the continuation higher. ...