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:
The Indexes are diverging from one another: The NASDAQ hit a fresh all time high. The S&P 500 is trading near highs but has started to move sideways. The Russell 2000, NYSE, and Dow are each in intermediate term consolidations and are arguably in short term down trends.
New lows started to outpace new highs: This was the biggest tell. It started last week and bled into this week. On Wednesday new lows on the NASDAQ outpaced new highs. Its odd to see this kind of divergence. It’s not completely uncommon. Just look at Oct 27 and you’ll find a similar divergence. What’s important is that it implies a turning point which could be higher or lower. Just like in a car, when a bend in the road approaches, its time to ease off the gas.
The Dow picked up 1 distribution day. Given the action, its kind of remarkable that there aren’t more distribution days. Thursday in particular was a day where weakness was bought as price closed well off its lows.
There are 40 stocks total on the trade ideas list. This is the fewest we’ve had in about 6 weeks. Most of the setups I’m finding (while seeing a number of ‘5s’) are in fact ‘B’ level trades.
7 out of 8 of my open trades are in profit. I did some more selling last week, booking gains in DFIN and DAVA. I tried a trade in STER and it stopped me out the next day. Other recent trades in HUBS, DXCM, and KLAC are still near the buy point and haven’t gotten going yet. More reason for general caution.
HOW I’M PLAYING THIS HAND: I’m going to continue adding trades I feel strongly about while playing with a smaller size. I’m starting the week with orders for 1/4 positions in each of the following: DIOD, SEDG, ANET, AMRC
Best Selling Author – Trading Coach – Creator of the Trade Gauntlet – Founder of MaraWealth.com
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