fbpx

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.

[videopress GquuK9TA]

Highlights

MARKET MOOD:

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

TRADE IDEAS:

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! 

GAME PLAN:

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. 

RESOURCES

DISCLAIMER: Futures, stocks, and options trading involves a substantial risk of loss and is not suitable for every investor. The valuation of futures, stocks, and options may fluctuate, and, as a result, clients may lose more than their original investment. The impact of seasonal and geopolitical events is already factored into market prices. The highly leveraged nature of futures trading means that small market movements will have a great impact on your trading account and this can work against you, leading to large losses, or can work for you, leading to large gains.
If the market moves against you, you may sustain a total loss greater than the amount you deposited into your account. You are responsible for all the risks and financial resources you use and for the chosen trading system. You should not engage in trading unless you fully understand the nature of the transactions you are entering into and the extent of your exposure to loss. If you do not fully understand these risks you must seek independent advice from your financial advisor.
All trading strategies are used at your own risk.
Any content on marawealth.com should not be relied upon as advice or construed as providing recommendations of any kind. It is your responsibility to confirm and decide which trades to make. Trade only with risk capital; that is, trade with money that, if lost, will not adversely impact your lifestyle and your ability to meet your financial obligations. Past results are no indication of future performance. In no event should the content of this correspondence be construed as an express or implied promise or guarantee.
marawealth.com or Mara Wealth LLC. is not responsible for any losses incurred as a result of using any of our trading strategies. Loss-limiting strategies such as stop-loss orders may not be effective because market conditions or technological issues may make it impossible to execute such orders. Likewise, strategies using combinations of options and/or futures positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. Information provided in this correspondence is intended solely for informational purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.