Pristine Market Analysis & Watchlist 3/2

Did we just bottom?

Team,

The market found a bottom today! But was it THE bottom? Let’s take a look under the hood.

-Andrew

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Economic Data:

Today’s session kicked off with jobless claims data that came in slightly below estimates.

The selling in bonds continued, with the ZN_F 10yr treasury futures contract cascading below the monthly value area.

ZN_F Daily Chart

Beware the Jaws

And I feel like such a broken record here…but the jaws widened!

Equity Dashboard

Equity markets were largely undeterred by the weakness in bonds. They opened on their lows, and closed towards the highs! The DIA Dow Jones led today’s action, which is definitely a character change, given the Dow’s underperformance year-to-date:

Return on Vol Crush

While this index action looks great, I am still cautious, as when we pull back the clock a few weeks, the market has gone absolutely nowhere, and against that backdrop, volatility has been crushed!

A volatility crush tends to fuel upside in equities, so the fact that we’ve actually declined through this volatility crush is concerning. I would feel much more confident that a durable bottom is in place if the VIX spiked!

ES_F S&P 500 Price Action Analysis

But lo and behold, the S&P 500 undercut the 200-day SMA overnight, and found buyers! We did not quite make it down to the teal downward trendline, but got pretty close.

And moving over to the S&P 500 SPY ETF, where did we find support? Pretty darn close to the anchored VWAP from the October lows! Could there have been investors that missed the bottom that used this level as their tactical entry? It’s very possible. The fact that we got such a strong reaction off that level tells us how important it is moving forward.

While it’s great to see some responsive buying, does today’s action have any real legs?

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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