fbpx

WEEKLY GAME PLAN April 24, 2021

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.
MARA List
Market Summary

MARKET MOOD:

As we anticipated, the market pulled back last week and the slow grind higher continued.

Whenever the market pulls back, I always like to see what the stocks from the Universe List do. Are they consolidating constructively? Are the setups few or plentiful?

Heading into next week, I’m not seeing a ton of setups I like. There were 19 ideas that caught my eye and are on the Trade Ideas list. But upon further scrutiny, only 3 of them made it onto the Focus List. That’s pretty telling in and of itself! If that weren’t enough, each of the trades on the focus list were graded as a ‘C’!

I’ve started grading my trades in addition to the Trade Gauntlet score. We discussed this at length during today’s DEEP DIVE (watch the video below). The letter grade is a combination of my gut feel, the gauntlet score, and proximity to earnings. The purpose of the letter grade is to assist with position sizing. A’s will get 1.5% risk, B’s 1%, and C’s 0.5% max. Over time, we should see a bell curve with most stocks getting a ‘B’. This is my first week using these letter grades and I feel seeing all ‘C’s is likely an anomaly. That said, I also think its telling of the environment we’re in.

Something else that was interesting was the New Highs vs New Lows. Take a look at the the chart below. New highs on the NASDAQ have flat lined while the NYSE has pushed higher. It’s abnormal and lets to the chop we’ve seen.

I’m still cautious and treading lightly heading into next week. I haven’t added anything to the actions list yet and want to take a little more time to think it over. Any trades I take at the onset will be light given the choppiness and low grade setups.

Checkout the charts of the indexes below for a closer look at the action.

MONTHLY CHARTS (indexes) Overcall Direction = Up: https://www.tradingview.com/x/O3bwXy3S/

WEEKLY CHARTS (indexes) Overcall Direction = Uptrend: https://www.tradingview.com/x/0UpENPwc/

DAILY CHARTS (indexes) Overcall Direction = Sideways: https://www.tradingview.com/x/2kea9Xdn/
(on the lower right is the image of stocks hitting new highs vs new lows on the NASDAQ & NYSE)

Deep Dive Video

 

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.