WEEKLY GAME PLAN February 6, 2021

MARKET MOOD:

Oh my goodness, what a difference a day makes! When we were talking last week, things looked shakey and I was prepping to play extremely light and that’s how I started the week. By the end of the week I’m in fairly deep (about 70% invested). Trades were working. As trades work, the market is telling us to step things up. That’s what I ended up doing.

For the week ahead, we have a scenario I haven’t seen in a very long time… We have predominantly sideways action on the weekly time frames and predominantly uptrends on the daily timeframes! Now before you throw something at the screen, take a look at the weekly chart of the indexes below, and then look at the daily. Yes the S&P 500 moved into all time highs on Friday. That put the daily timeframe in an uptrend. However, when we look at it on a weekly, we have a series of both higher highs AND lower lows. Volatility is on the upswing…and so far its to the upside!

There’s a ton of stocks setting up this week. The trade ideas list has over 40 names on it. Similar to what we had last week, many of these ideas are aggressive and by aggressive I mean the stop loss placement is iffy. It’s not a ‘set it below price structure’ and let the chips fall where they may. They’re mostly trades that need some active management in my opinion. That said, I widdled the focus list down to 5 and all of them look great to me.

I’m putting orders in for HEAR, SCCO, and TSLA. They’re the highest scorers on the Trade Gauntlet. I’ll likely be active next week as well. While heading into the week plans, I want to allow the market to guide my actions. If something on the trade ideas list breaks out on massive volume, it’ll have my attention (like many of the ideas that I have open right now did.)

Finally, I want to talk about the number of stocks hitting New Highs vs New Lows (see this on the daily chart of the indexes). The number of new highs are creeping back up while the new lows remain non-existent. This is healthy in my opinion as is the fact that we didn’t see an uptick in the number of new lows when the market pulled back sharply. If you were to go back to January of last year, you’d see a significant increase in the number of new lows BEFORE the drop later in February.

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

DAILY CHARTS (indexes): https://www.tradingview.com/x/97Wf1bRL/?aff_id=15325&offer_id=10
(on the lower right is the image of stocks hitting new highs vs new lows on the NASDAQ & NYSE)

WEEKLY CHARTS (indexes): https://www.tradingview.com/x/FZ0Sz7r6/?aff_id=15325&offer_id=10

MONTHLY CHARTS (indexes): https://www.tradingview.com/x/5UaR5q1J/?aff_id=15325&offer_id=10