MARKET MOOD: RED
Price action on the major indexes are improving…
Stocks making New Highs vs New Lows are improving…
Last weeks trade ideas were better than 50/50…
You may be asking “Why the heck is Market Mood RED??”
A key component of the ‘market mood’ formula is personal performance. It’s what makes the formula so great. It’s customized to and a reflection you!
Toward the middle of last week I was on ’tilt.’ I spoke about it in depth during the deep dive but to summarize, I had some personal stuff going on and it bled into my trading (yes, the mindset guy makes mental errors too!). It’s the first time in a long time something like this happened…
I was low energy and in a negative state. I was aware of this when it came to end of day Thursday. I analyzed my open positions in DKS, ESI, and NUE on the 30min. Each were pulling back. DKS and NUE were below the buy point but above my stops (which I had already raised). I thought that I saw lower lows being made on the 30min. I went back and forth looking at the daily, looking at the 30min. Looking at the daily. Looking at the 30min. Eventually I decided “I’m on tilt, rather than sit here and be uncomfortable in a position and continue to be uncomfortable after the close, let me clear the deck, clear my head, and try to get back on track.”
Right move mentally, wrong move for the trades. (I also exited ESI).
If I had to go back and do it all over again with the same set of circumstances, I’d likely still clear the deck. At the end of the day, the market is an infinite stream of opportunity. If this is true, mental capital is far more important than physical capital. Better to regroup and come back fresh.
All that said, if I were not on tilt last week, I’d likely be moving from a yellow to a green condition!
In addition to:
Constructive action on the indexes
New Highs vs New Lows improving (single digit new lows, triple digit new highs)
Last week’s setups better than 50/50
I’m also seeing a few compelling ‘A’ level setups. As of this writing I’m still working through the Focus List but already have OAS and DKS as ‘A’ level setups both with gauntlet scores of 7.5 or higher.
Checkout the charts of the indexes below for a closer look at the action.
MONTHLY CHARTS (indexes) Overcall Direction = Up https://www.tradingview.com/x/6Jx1gOFT/
WEEKLY CHARTS (indexes) Overcall Direction = Sideways: https://www.tradingview.com/x/Mjjor5tP/
DAILY CHARTS (indexes) Overcall Direction = Sideways: https://www.tradingview.com/x/8zYZmysO/
(on the lower right is the image of stocks hitting new highs vs new lows on the NASDAQ & NYSE)
Deep Dive Video