Pristine Market Analysis & Watchlist 2-8
The Jaws Widened!
Good evening everyone,
Is it just me or did today feel like 3 different trading sessions in one?
We have a lot to cover tonight, so let’s dive in!
-Andrew
Two significant events drove today’s price action:
Powell Interview at 12:40 PM ET
MSFT AI event at 1:00 PM
We finished the session with a few divergences worth noting. Let’s take a look under the hood 👇
ZN_F 10yr Treasury Futures Contract
The 10yr treasury futures contract sold off for a third straight day, continuing the move that began after the stronger-than-expected jobs report on Friday. It’s now trading below the monthly value area, and is on the verge of giving back all YTD gains.
The Nasdaq is typically the most highly sensitive equity benchmark to movements in long-term interest rates, but it continued to diverge from treasuries as it rallied +2.07% for the session! Beware of the jaws!
Investor Positioning
Powell didn’t give the market any new information today, so I believe that most of today’s move has to do with investor positioning. I checked the QQQ options open interest for today’s expiry and found a wall of QQQ puts at the 300 strike:
On an intermediate-term timeframe, the divergence between Nasdaq and treasuries isn’t sustainable, but perhaps there is more gamesmanship to be had between now and monthly opex on 2/17, given existing put positions that can serve to prop the market up.
Equity Dashboard
IWM Small caps, which led the market in January, lagged megacaps today. The UUP dollar ETF sold off after squeezing higher for three straight sessions:
Finviz Heatmap
Oddly enough, the market was led by AI technology companies MSFT NVDA…and energy XLE names. These groups rarely lead together.
S&P 500 ES_F Price Analysis
The S&P 500 undercut the weekly POC 4115.5 multiple times throughout the session, but buyers stepped in to defend that level each time. As we mentioned in last night’s newsletter, a failure to get traction below the weekly POC targets a move to the top of value 4182.25. So far we’ve rejected off the top of value, but it is worth monitoring tomorrow for a breakout from value:
Sectors - Ranked by Momentum
SOXX semiconductors and XLE energy led today’s action. AI related groups all outperformed
Earnings on Tap
We are covering all of the following reports and earnings reactions in Discord
One of our proprietary models is sending a signal that could trigger over the next few sessions…
In the following sections of tonight’s update, I’ll cover my research in preparation for tomorrow’s trading session
✅ Trend Model Update - Our proprietary indicator that informs us on how aggressive/defensive to position in the market
✅Market Strategy - My trading plan
✅ Today’s Trade Blotter and Position Update
✅Daily Watchlist - We scan thousands of stocks and hand-pick the best reward/risk opportunities
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