Pristine Market Analysis & Watchlist 2-2

RIP Shorts

Good evening everyone,

I believe many shorts passed on to the trading afterlife today, in what appeared to be climactic action across indices and individual stocks.

Price action never changes, because human nature never changes! I’ve seen this movie before.

We have a lot to cover tonight, so let’s dive in!

-Andrew

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Equity Dashboard

Equity markets gapped higher this morning as Europe processed the US Fed meeting overnight, the ECB did another 50 basis rate hike, and META gapped about 20% higher after reporting earnings.

FX Market

While equities were exuberant, the dollar index did not confirm the move. The assumption could be made based on yesterday’s action that the dollar index plunged as investors priced out any further tightening by the Fed, but then why would the dollar proceed to reverse most of those losses the following session? I flag this because the FX and bond markets lead equities, not the other way around.

Volatility Analysis

Our tracked volatility gauges all finished in positive territory, which is another sign that today’s action was highly climactic. Human nature is a wonderful thing, but it makes us bad risk takers. As stock prices and account balances move higher, most develop a false sense of security, and ignore obvious warning signs like this!

S&P 500 ES_F Price Analysis

Let’s be honest with ourselves, the trend of the S&P 500 is up, but it has now accelerated and is moving in parabolic fashion. Here is a tidbit to carry with you for the rest of your trading career. The players that buy into the parabolic move are the weakest hands in the market.

Finviz Heatmap

Today’s rally was top-heavy, in that the top 10 stocks by market cap did most of the heavy lifting. Who do you think was buying AAPL GOOG AMZN intraday after they had already advanced over 1 ATR on the session and were to report earnings after the bell? Certainly not ‘A’ players. This was most likely forced buyers and/or players getting squeezed.

Sectors - Ranked by Momentum

• ARKK innovation, XITK innovative tech, and BLOK led today’s session

• Painful session for the crowded areas of the market like GDX gold miners, KWEB China internet, and TAN solar energy

Earnings on Tap

• I am covering all of these reports and reactions in Discord

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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