MARKET MOOD: GREEN
The summary below is my interpretation of the data in the ‘Market Mood Log’ above:
- The Indexes are in Uptrends across the board: Each of the major indexes (S&P 500, NASDAQ, Russell 2000, NYSE, and Dow) are in uptrends across daily, weekly, and monthly time frames. Each are getting extended above the 50sma and are due for pullbacks. Depending on the manner in which the pullback comes, it could be a great buying opportunity. I’m preparing for this both on the indexes as well as my stocks to occur at any time.
- New highs are back in black: Yes, its an AC/DC reference 😜 Triple digit new highs were consistent on both the NASDAQ and NYSE with each getting into the 200s. New lows have been in the low double digits. This is a sign of participation in this rally increasing and is a sign of a healthy rally.
- More distribution fell off the count this week. We are down to 3 distribution days over the last 25 days on the S&P 500 and Dow. That is very little selling and there’s only been 1 in the last 10 days.
- There are 68 stocks total on the trade ideas list. The best ideas I’m seeing are add-on buys. Several of these ideas are in names I already own like UPST, COIN, CRC… In this environment where the market is extended, seeing add-on setups in leaders is another strong sign.
- 13 out of 15 of my open trades are in profit. This is probably the heaviest I’ve been all year. Several of the positions are add-on buys and I’ll likely look to increase my add-ons next week.
- Over my last 10 closed trades, my batting avg is at 60% which is better than my historical avg which is closer to 40%.
HOW I’M PLAYING THIS HAND: I’m looking to add to winners and am sparingly adding new buys. Next week I’m looking to start off with an order to add to UPST and will be watching COIN very closely. Both are reporting earnings. My add-on sizes will take this into account. I’ll also be prepared for a potential gap down against me and plan for both reversal rallies where price closes at its high, as well as for drops like a stone. The way I’m going to do it is to pay attention to the first half hour of trading those days and adjust.
Checkout the charts of the indexes below.
MONTHLY CHARTS (indexes) Over all Direction = Uptrend: https://www.tradingview.com/x/asw88vKP/
WEEKLY CHARTS (indexes) Over all Direction = Up: https://www.tradingview.com/x/FoBjMY0n/
DAILY CHARTS (indexes) Over all Direction = Up: https://www.tradingview.com/x/xAF6H8nP/
(on the lower right is FFTY, the ETF that tracks the IBD 50)
MARKET MOOD REVIEW
Elite Members go to Elite Training for this week’s topic Progressive Exposure, Allowing your winners to pay for your next trade(s)
Trade Ideas, setups for the week ahead and group discussion (Mike)