MARKET MOOD: YELLOW
The summary below is my interpretation of the data in the ‘Market Mood Log’ above:
- The Indexes shifted to sideways plus on the daily/weekly: This is actually highlight constructive. The S&P 500 and NASDAQ almost look like cup w/ high handle patterns. The each closed near their weekly highs and above all their moving averages. The Dow is lagging a little bit but is otherwise okay.
- New highs are wonky: This is the only reason I’m in a yellow and not a green condition. New highs dried up on the NASDAQ and are at 108 which is decent, but the new lows are still at -49. I consider this high and reason enough for me to exercise a little more caution.
- 2 distribution days were added to the S&P 500. That may sound like more reason to be in a yellow condition and on Tuesday/Wednesday it certainly felt that way in the portfolio. However, looking at the bigger picture, there are only 4 distribution days in the last 25 days. Very little selling and the market quickly rebounded. Not a big deal yet.
- There are 70 stocks total on the trade ideas list. At the time of this writing I’m still working my way through the focus list but there are 6 that I’m considering placing orders for including UPST, KLAC, NSA, SPG, DXCM, and DIOD. There are 56 names on the focus list which is the most we’ve had in a very long time. I think this is a sign that the shelves are fully stocked and ready to be bought.
- 8 out of 8 of my open trades are in profit. I did some selling last week. Sold off my weakest positions and held my strongest. With that, I’ve got plenty of room to add fresh names.
HOW I’M PLAYING THIS HAND: Check the ACTION LIST for the names I’ll be placing orders for. You can also check DISCORD. I’m not sure how many I’ll be adding this week but to kick things off, I can see myself placing orders for 3-4 of the names mentioned above at least. The environment seems ripe to me and I’m using my profits to finance additional risk here should trades continue to break out.
Checkout the charts of the indexes below.
MONTHLY CHARTS (indexes) Over all Direction = Uptrend: https://www.tradingview.com/x/ZalEEFmC/
WEEKLY CHARTS (indexes) Over all Direction = Sideways Plus: https://www.tradingview.com/x/oQ7WeRkC/
DAILY CHARTS (indexes) Over all Direction = Sideways Plus: https://www.tradingview.com/x/VlK0ahAm/
(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 Basic Futures Trading 101: what they are, how they’re different, and basics of trading them (Stu)
Trade Ideas, setups for the week ahead and group discussion (Mike)