WEEKLY GAME PLAN February 19, 2022

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: Red

The summary below is my interpretation of the data in the ‘Market Mood Log’ above:

The major indexes pushed lower last week and have established down trends on both the daily and weekly charts. New lows picked up and so did distribution. However, the number and quality of bullish setups picked up and are the most I’ve seen in about 3 months. I don’t think that the lows are in and I wouldn’t be surprised if the indexes made a fresh leg lower next week. However, I do think seeing some breadth among the bulls presents us with enough action for there to be continued chop. For this reason, if I were to short, I’d consider a targeted ETF as opposed to an index ETF.

  • Indexes dropped and extended downtrends on daily/weekly timeframes: When timeframes converge, smoother trends can begin. Last week, downtrends were confirmed on the daily and weekly timeframes. This can be seen in the price action (lower highs and lower lows being made), moving averages sloping downward, and ascending trend lines breaking.
  • More new lows are being made: Stocks making new lows on the NASDAQ jumped back into the triple digits.
  • Distribution picked up again: Both the S&P 500 and the Dow have 4 distribution days over the past 10 trading days. That is what is known as a ‘distribution cluster’ and it points to unusual selling pressure. In the near term, this typically leads to a further decline.
  • There are 35 stocks total on the trade ideas list. This is the most we’ve had in about 3 months. Energy, Banks, and Metals are the sectors with the most setups and the highest quality from the Universe.
  • Open Trades: I’m in cash at the time of this writing.

HOW I’M PLAYING THIS HAND: I’m placing orders for FFWM and MLI. I like both setups and both are in leading industry groups. The market conditions are rough so I’ll be playing small, risking 0.25% on each to start and keeping both on relatively tight leashes. See the Action List and Discord for updates.

Checkout the charts of the indexes below.

MONTHLY CHARTS (indexes) Over all Direction = Sideways Negative: https://www.tradingview.com/x/4lGDaTl8/

WEEKLY CHARTS (indexes) Over all Direction = Down: https://www.tradingview.com/x/GBEFXKnn/

DAILY CHARTS (indexes) Over all Direction = Down: https://www.tradingview.com/x/pKgnMvFi/
(on the lower right is FFTY, the ETF that tracks the IBD 50)

MARKET MOOD REVIEW

LESSON

Elite Members go to Elite Training for this week’s lesson When To Cut A Trade Early.

TRADE IDEAS

Trade Ideas, setups for the week ahead and group discussion (Mike)

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