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
The summary below is my interpretation of the data in the ‘Market Mood Log’ above:
Constructive action on the indexes: handles have formed on the daily time frames of each of the major indexes. The price action has tightened up as well and has shown a positive shift in character.
New Highs vs New Lows…the one trouble spot: New lows continue to outpace new highs on the NASDAQ. This is the one major area of concern and the reason why I’ve opted keep the market in a ‘red’ condition for now.
Distribution continuing to fall off. There has only been 1 distribution day in the last 10 days. Another sign of improvement.
There are 56 stocks total on the trade ideas list. Breadth is expanding. The majority of setups are in the B and C area.
Open Trades: I’m in cash right now.
HOW I’M PLAYING THIS HAND: To start things off this week I’m going to sit, wait, and watch. Reason being, I’ve got covid and its hitting me pretty hard. Even though there’s a nice uptick in the level of trade opportunities (56 this week vs 36 last week) and some quality looking setups, I have a policy of not starting new positions when I’m sick. As I always say ‘the market is an infinite stream of opportunity’. If I’m in a compromised state like this, I’m doing myself more harm than good by putting on trades that I may not be able to manage properly.
Given the increasing breadth and quality of the setups (along with every other element pointing to a yellow condition), there is an argument to be made to overlook the new highs v new lows on the NASDAQ and to keep the ‘yellow’ condition going. I think the tie breaker could be personal performance. How have you performed over your last 3 trades? 5 trades?
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.