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.
MARKET MOOD: Red
Since November 17, the market has been in a ‘RED’ condition in all but 16 days.
The summary below is my interpretation of the data in the ‘Market Mood Log’ above:
Downtrends re-established across the board: All 5 of the major indexes put in negative outside reversal days on Thursday that closed near their lows and followed through to the downside on Friday. This also created negative outside reversal weeks across the board and put the monthly charts near their lows.
New Lows back to outpacing New Highs: For nearly 2 weeks the NYSE picked up steam as new highs hit triple digits. That came to an abrupt end on Friday. Just over 100 new lows for NYSE and nearly 300 new lows on the NASDAQ reflect the worsening action.
Distribution picks back up: There are now 5 distribution days over the last 10 trading days on both S&P 500 and Dow. The combined sell off points to much heavier selling. Previously only the S&P 500 was carrying this distribution cluster (it had done so for about 2 1/2 weeks). It wasn’t until distribution picked up on the Dow as well that the market cracked.
There are only 4 stocks total on the trade ideas list. These ‘setups’ are mere consolidations of stocks that have held up. None of them are what I’d consider buyable at the moment. They include PBT, BJ, VAL, and TSLA.
Open Trades: I’m back to cash presently.
HOW I’M PLAYING THIS HAND: I’m sitting and waiting in cash until I see high quality setups that interest me. By sitting and waiting, I preserve mental capital as well as physical capital. Gains can be made very quickly when conditions are right. The key is to avoid the times when conditions aren’t right so we can compound gains instead of digging ourselves out of a hole.
Best Selling Author – Trading Coach – Creator of the Trade Gauntlet – Founder of MaraWealth.com
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.