Trading Plan: 2 March 2022
Nasdaq (-1.59%) erased all Monday gains and then some with important volumes. Still consolidating under the decreasing EMA21, but it may take days or even weeks to build a solid base.
SP-500 lost 1.55% yesterday with important volumes, signaling a distribution day. Even if Energy tried to continue the advance, the overall index was red. Again, there is no time to bet aggressively until a base is formed and see a clearer direction.
In the news
Biden’s State of the Union sends potent messages to Zelensky and Putin.
Stock futures flat as oil prices continue jumping amid the ongoing conflict in Ukraine.
The U.S. bans Russian flights from American airspace.
Apple has stopped selling its products on its Apple store in Russia, the company confirmed on Tuesday.
Sectors
Best yesterday sector: Energy, then Basic Materials. Worst sector: Financial.
Best weekly sector: Energy, then Utilities. Worst sector: Financial.
Best monthly sector: Energy, then Basic Materials. Worst sector: Financial.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 44.41
VIX (neutral under 20): 33.32
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.89
CNN Fear & Greed: 18 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 30.79%
Stocks above SMA200 (neutral above 30): 27.86%
Number of stocks that increased yesterday by more than 4%: 182
Number of stocks that decreased yesterday by more than 4%: 429
Earnings Reports
SoFi beats EPS and revenue consensus estimates and raised FY22 guidance. First Solar shares sink after revenue miss, disappointing guidance. Salesforce beat on the top and bottom lines in its fiscal fourth-quarter earnings report. Nordstrom reported better-than-expected profits and sales for the holiday quarter, prompting the retailer to offer an optimistic outlook for the coming year. Domino’s Pizza reported quarterly results that missed expectations on most metrics, sending the stock sharply lower. Target forecast revenue growth in the low to mid-single digits and projected adjusted earnings per share to rise by high single digits in the year ahead.
Noteworthy earnings reports for today: $DLTR, $ANF, $BILI, $NTNX, $PSTG, $SPLK, $VEEV.
What to trade today
Some Energy / Oils, Precious materials, Solar and Defense continued higher, but their wide bars are the results of the news environment mostly and it is hard to catch them and benefit from their advance without risking higher. The volatility index is higher than 25-30 risky area, so not a time to find low-risk bets. And even if found, this fast rotation might kill all the profits if not sold rapidly into strength.
This is a very difficult time to trade in my opinion. Do not forget about the FED meeting this month (March 15–16).
No plan to trade today, as I do not see good patterns with decreasing volatility and lower volumes. Just watching.
Do your due diligence if or when placing a trade. All ideas stated here are my own and do not represent trading or investment advice.