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WEEKLY GAME PLAN January 29, 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:

One of the themes that came up from today’s Mastermind that is worth highlighting here is that we do not need to be in the market all of the time to make money. What we need to do is be in the market when our edge is present and we have the highest probability of success and to patiently wait during the other times.

It’s possible to make gains quickly and that is part of the edge that I follow. What can happen is that some periods will be extremely profitable while other periods are far less. The key to not just making profits but holding on to them is to avoid the less profitable periods. We do that through consistently following and executing our systems. For me, my system is telling me to patiently wait right now.

  • Indices formed brief 1 week consolidations on the daily timeframes: These consolidations are the first after a major sell off and are happening below the 200sma. The weekly and monthly charts are showing larger bearish consolidations (see the market mood video below). Since the market typically follows the higher timeframes, the odds point to lower prices or some choppiness in the near term.
  • New Lows continue stacking up: New lows continue to dramatically outpace new highs by triple digits. Even if the market were to stage a rally attempt next week, in order for it to be sustainable, the new highs vs new lows list must resolve itself. Any rally will be questionable until it does.
  • Distribution tapered a little: Essentially after such a strong down move (the Russell 2000 is in bear market territory, the others are in correction) the selling has tapered a bit. From the perspective of major institutions moving billions, while they may not be in panic mode like March 2020, they have been scaling out the last several weeks. With the knowledge that they want to get out at the best prices too and can’t exit the market quickly like we can, it makes sense that the selling pressure will lighten up after its gotten too heavy, allow prices to rise and provide the opportunity to scale out at higher levels.
  • There are 20 stocks total on the trade ideas list. None of them are what I’d consider ‘high quality’. The best one I saw was ECPG. I put it through the gauntlet and it only scored a 6.43 which is a high C level trade.
  • Open Trades: None. I had attempted a long term entry in GLD last week and exited it on Friday as it too had a large negative outside reversal week on heavy volume, closing below both its 10wk and 40wk lines. Given the backdrop of inflation, the fed raising interest rates, and a potential war, the elements for gold to run are present. I’m continuing to watch it to see if it sets up again.

HOW I’M PLAYING THIS HAND: Cash is king and for now I’m sitting, watching, and waiting. I’m still running my same trading routines, journaling daily, reviewing weekly, and studying. This is how we stay sharp, prepped, and ready for when conditions change.

Checkout the charts of the indexes below.

MONTHLY CHARTS (indexes) Over all Direction = Sideways: https://www.tradingview.com/x/syGxiQ2r/

WEEKLY CHARTS (indexes) Over all Direction = Down: https://www.tradingview.com/x/t1pIgIMT/

DAILY CHARTS (indexes) Over all Direction = Down: https://www.tradingview.com/x/vsojsn0C/
(on the lower right is FFTY, the ETF that tracks the IBD 50)

MARKET MOOD REVIEW

LESSON

This week our Trade Ideas session was extended and followed with a mindset discussion during the last 45minutes. See below.

TRADE IDEAS

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

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