2021 begins the year with uptrends across the board on the major indexes. Only the Russell 2000 and NYSE are trending sideways on their daily timeframes. Each of the indexes have multiple layers of support that are nearby including their 21emas.
From the monthly timeframes, it looks as though we’ve only just begun. The Russell 2000 is leading the way and the S&P 500, NASDAQ, Dow, and NYSE all broke out to fresh highs last month!
While this all paints a bullish picture, on the intermediate term, it’s been about 2 months since the market had a meaningful correction of about 10%. This gives me some reservation for on new buys and more reason to only want to buy the strongest names and strongest breakouts (like PDD and FCX last week).
We are starting to see a slight dry up in the number of new highs being made. It’s on the radar…if it persists it could indicative of a short term pullback.
DAILY CHARTS (indexes): https://www.tradingview.com/x/I8cI3z4W/?aff_id=15325&offer_id=10
WEEKLY CHARTS (indexes): https://www.tradingview.com/x/qiBqOoqu/?aff_id=15325&offer_id=10
MONTHLY CHARTS (indexes): https://www.tradingview.com/x/rmaFK03w/?aff_id=15325&offer_id=10
This week we found 20 stocks setting up from the universe list (about 10% of the list) and of those 20, 7 made their way onto the focus list. Honestly, I’m not overly impressed with the setups this week. APPS and AMAT are the highest scorers and I intend to put in orders for both. However, the rest had some flaws and its reflected in the Trade Gauntlet scores (a lot in the high 5s this week).
When there’s not a ton of merchandise on the shelves, it makes me ask ‘am I early and the shelves are now being restocked, or am I late and all the good stuff is gone?’ Given that we haven’t had a meaningful pullback in a while I’m inclined to think the latter.
Given the above, I’m being selective with new entries, have tightened up my stops on existing positions, and will continue to let the market be my guide.
Deep Dive Video
Let me know what you think (post in the Trader’s Mindchat Room).
- Mara Trader ‘Weekend Assessment’ Sheet
- Trade Emotionator (free position size calculator)
- TrendSpider (charts)
- EdgeWonk (trading journal)
- Options Geek (options EDU + new options chain)
- TradingView (charts)
- Favorite Trading Books
- Market Smith