Trading Prep DEEP DIVE November 28, 2020

Welcome to the Weekly Game Plan! The 'MARA Lists' are updated in real-time. The 'Market Summary' is provided weekly. The 'Deep Dive Video' is the recording of our weekly Trading Prep DEEP DIVE.

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The major indexes broke out in a BIG way last week. All time highs for the NASDAQ, Russell 2000, NYSE, and Dow. The S&P 500 is a stone throw away from being at fresh highs.
When the overall direction of the market is up across the board like this, there’s a few outcomes that tend to follow: a melt up and a sharp correction, a pullback toward support. or a quicker run up and then a top out… do you see the general theme? As the market runs higher without consolidating, it makes the likelihood of a sharp pullback greater.
But it doesn’t just matter what the indexes are doing. It matters what the stocks on your Universe List are doing as well. On mine, there’s 14 setting up as swing trades and 30 hitting 52wk highs. With this kind of momentum it tells me that there are some fine looking day trades right now, and to be very selective with swing trades.  

OVERALL DIRECTION: UUU (Uptrend on monthly, weekly, and daily time frames)

NEW HIGHS vs NEW LOWS: The NYSE broke out to fresh all-time highs this week. It’s interesting that the number of stocks within it hitting new highs aren’t as robust. New highs hit 177 on Tuesday but quickly tapered on Wednesday with only 59. This also has me thinking a sharp pullback may be in the cards.

DAILY CHARTS: https://www.tradingview.com/x/DFeKq72J/?aff_id=15325&offer_id=10

WEEKLY CHARTS: https://www.tradingview.com/x/juDdzIJI/?aff_id=15325&offer_id=10

MONTHLY CHARTS: https://www.tradingview.com/x/9PiIKdij/?aff_id=15325&offer_id=10


In the rare case that the market is extended like it is, we need to be even more selective with our entries. A pullback in the market is more likely to occur and can drop fresh entries along with it. Here’s the ones on my radar: https://docs.google.com/spreadsheets/d/19UjD8pISjyvHLJXBvgSoPmW7_-nYoPf4-nic4IH_770/edit?usp=sharing

Also note how many ideas are on the momentum day trading list! When there is this much momentum, its great for day trading! 


When the market is extended like this, it tends to be less forgiving. If we’re sloppy with our entries, stops, plans, etc. we’ll get whipsawed. Only our strongest ideas are worthy of being executed. As of this writing, 2 ideas that look good enough to execute on are PDD and GOOGL. Since I’ve only made SOME progress on my recent buys (XPEL, AAXN, and AMD) I’m planning to place an order for PDD only. If I start making more progress I’ll look to add GOOGL. I’ll keep you posted inside the TMC Room. 


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