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:
Choppy / Bearish Action Continues: The long term monthly charts of the indexes are each in downtrends. The weekly and daily charts are consolidating sideways near potential long term support zones. This creates a bearish bias and choppy action. On the daily timeframes, each of the indexes are finding resistance at or near their 21emas and the NASDSAQ and NYSE are finding resistance at the 10ema.
New Lows contract and expand…: This type of action among stocks making new highs/new lows adds to the level of chop. Its a sign that in the short term, the downside is exhausted and needs a breather. It lends to the reason why the market shifted from downtrends on the lower timeframes to sideways but negative.
Distribution picks back up: You wouldn’t notice it by looking at the distribution day count but Monday and Tuesday added distribution days while older ones fell off. Make no mistake, distribution is still elevated.
There are 23 stocks total on the trade ideas list. Heading into this week, the most interesting area is Transports particularly shipping. A number of stocks in this space are setting up. The one that intrigues me the most is MATX. It is on the action list. Please see the action list above for details.
Open Trades: I closed out ERF last week for a 1.4R gain. It had 7 danger signals on Friday (see the closed trades tab for all of the notes on this trade). Additionally, the energy sector seems to be getting toppy with many names in the space having parabolic moves, showing signs of stalling, or having other types of ‘danger’ signals.
HOW I’M PLAYING THIS HAND: MATX scored high on the Trade Gauntlet (7.67) so I’ll be placing an order for this one to kick off the week. I’ll still be trading small, only 0.3% risk, given the Red market condition.
Best Selling Author – Trading Coach – Creator of the Trade Gauntlet – Founder of MaraWealth.com
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