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
We’re starting next week still in a red condition, despite the initial buys being about 50/50 and seeing some A and B setups (this would have us moving into a yellow condition). The reason why we’re staying red for now is because: 1. Most setups from last week got walloped (just happened to select the better ones). 2. Major indexes are choppy with sellers in control. 3. New highs are pulling in substantially on both NASDAQ and NYSE.
From a long term perspective (see monthly charts) and even an intermediate term perspective (see weekly charts) the market is simply consolidating within a broader uptrend. We don’t want to lose site of that. Even if you happen to be trading shorter term, awareness of the higher timeframes gives you a better opportunity for success.
We know that anything can happen. Friday’s action took all but the NASDAQ below the 50sma (see daily charts). We need to ask ourselves what if the market rolls over? What if the market rallies? What if the market continues to chop around?
If the market rolls over, most stocks will be hit. Being in a red condition with small sizing protects your capital.
If the market rallies, pullback buys and advanced entries will likely trigger. Taking small test positions in your best setups is a great way to get involved, test entries, make some progress while not putting too much capital at risk (it is a red condition after all).
Checkout the charts of the indexes below for a closer look at the action.
Best Selling Author – Trading Coach – Creator of the Trade Gauntlet – Founder of MaraWealth.com
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