Trading Plan: 20 January 2022
Even if in the beginning of the day there were a lot of positive movements. Nasdaq continued the downtrend and closed at the lows of the day (-1.15%) and under the SMA200 again. Next supports are at 14200 and 14000. New lows are also more than the new highs. This correction is likely to continue.
SP-500 has the same story (-0.97%) with high volumes and completes the overall image of the market. This ongoing weakness make us to be more caution during this time. Next support: 4300 area.
Precious metals attracted a lot of investors and many companies in this field surged ($KL, $GOLD, $NEM, $PLG, etc.).
Peloton is reportedly planning to cut 41% of its sales and marketing staff.
After a years-long wait, fintech giant SoFi has finally secured approval from the Office of the Comptroller of the Currency (OCC) and the Federal Reserve to become a bank holding company.
Ford is recalling about 200,000 cars in the U.S. to fix a problem that can stop the brake lights from turning off.
Biden says Russia likely to invade Ukraine. President Biden addressed the brewing conflict between Russia and Ukraine during a press briefing Wednesday, saying of Russian President Vladimir Putin, “my guess is he will move in.”
Volatility is expected during these days / months, but it is always darkest before the dawn, bull markets go another 3 years plus after the first Fed hike! Will be the case now also? We will see.
The are many chances to the sector rotations, but until the trends are in place it is better to observe.
Sectors
Best yesterday sector: Basic Materials, then Consumer Defensive. Worst sector: Consumer Cyclical.
Best weekly sector: Energy, then Basic Materials. Worst sector: Technology.
Best monthly sector: Energy, then Basic Materials. Worst sector: Healthcare.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 74.78
VIX (neutral under 20): 23.85
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.91
CNN Fear & Greed: 59 (Greed)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 33.09%
Stocks above SMA200 (neutral above 30): 34.69%
Number of stocks that increased yesterday with more than 4%: 155
Number of stocks that decreased yesterday with more than 4%: 324
Noteworthy Earnings Reports / Events for today
What to trade today
There is no time to be a here on the long side, cash is king. Even the Oils were finally dragged down by the market. Protect the gains and tighten the Stop Losses for the long positions.
Shorts are working very well ($MRNA, $CIEN, $ASAN). Even if some Technology stocks closed in green, their topping tails might suggest a different continuation. We will see.
Hut 8 Mining can go down as the buyers didn’t came at the support. Under the black line there is a possible short sell. Stop Loss at $6.60.
SentinelOne signaled twice with two topping tails candles that sellers are in control. Short under the yesterday low with Stop Loss at yesterday high.
Snowflake ($SNOW) couldn’t make any new highs and it seems there is a broken double bottom pattern. If broken under the black line, it might be a good time to pull the trigger. Stop Loss at yesterday high.
Please do your own due diligence if or when placing a trade. All ideas stated here are my own and do not represent trading or investment advice.