WEEKLY GAME PLAN June 04, 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.

Market Summary


Last week we mentioned to be ready for some chop. Well, it only took 2 days for the market to shift from yellow back to red. Recall that what makes for these conditions (red, yellow, and green) are completely data driven and rules based. From where we are right now, I wouldn’t be surprised to see additional flipping back and forth. Details below.

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

  • Indexes continue to transition: The monthly charts are still in downtrends while both the weekly and daily charts are sideways. Each of the indexes have been living below their 10wk lines for about 1.5 to 2 months. They rallied up underneath them last week and paused. This is a not only a logical area to pause, but given the downward trajectory of the moving averages and the near term overhead supply, there’s plenty of reason for sellers to step in. HOWEVER, the rally off the lows and consolidation last week was constructive. The short term MAs are tight and turned up. There’s reason for buyers to step in as well. As far as price action goes, this is the perfect recipe for chop.
  • New Highs outpace new lows but barely: Mid-week new lows began outpacing new highs. This caused an immediate switch from yellow to red condition. On Friday, new highs barely outpaced new lows. The reason this didn’t flip the condition back to yellow is because of the lack of follow through in stocks setting up.
  • Distribution falling: The distribution count is down to 1 over the last 10 days on the Dow and 2 on the S&P 500.
  • There are 66 stocks total on the trade ideas list. This week is saw 1 A and several B level setups. Seeing more setups and higher quality setups has me cautiously optimistic here though the market has a long way to go.
  • Open Trades: I’m still holding KOS (+15%) and CNQ (+7%).

HOW I’M PLAYING THIS HAND: I’m placing orders for AFG and EC. Each will be at 6.5% of capital. The total amount of capital at risk between the two will only be about 0.6% of capital.

Checkout the charts of the indexes below.

MONTHLY CHARTS (indexes) Over all Direction = Down: https://www.tradingview.com/x/n2VASBsF/

WEEKLY CHARTS (indexes) Over all Direction = Sideways: https://www.tradingview.com/x/xhiTnEi9/

DAILY CHARTS (indexes) Over all Direction = Sideways: https://www.tradingview.com/x/n3RgvHBT/
(on the lower right is FFTY, the ETF that tracks the IBD 50)



Elite Members go to Elite Training or click here for Volatility Contraction Patterns – VCPs (Mike)


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

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