Trading Plan: 22 February 2022
Another leg down (-1.23%) for Nasdaq due mainly to the fear that exists now in the market (Ukraine-Russia tensions, QE ending or inflation measures). Until the market prices in all the news and expectations, only price action tells the status. Keep on watching the price levels and be prepared for all scenarios.
SP-500 (-0.72%) moved as Nasdaq mostly for the same reasons. Again, there is no time to anticipate and take additional risks. Futures are in deep red now, so we have a high probability of a big gap down today at the opening.
In the news
Russian President Vladimir Putin ordered the deployment to the two separatist regions after recognizing their independence
NATO’s chief says Russia could invade Ukraine ‘without any warning at all’ as Putin tests missile launches
Global Markets Fall After Russia Orders Troops Into Ukraine
The U.S. is now energy independent
Sectors
Best yesterday sector: Consumer Defensive, then Basic Materials. Worst sector: Communication Services.
Best weekly sector: Consumer Defensive, then Basic Materials. Worst sector: Energy.
Best monthly sector: Energy, then Consumer Defensive. Worst sector: Communication Services.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 53.49
VIX (neutral under 20): 27.75
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.12
CNN Fear & Greed: 37 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 31.34%
Stocks above SMA200 (neutral above 30): 29.71%
Number of stocks that increased yesterday by more than 4%: 109
Number of stocks that decreased yesterday by more than 4%: 467
Earnings Reports
Caesars Entertainment will report its fourth-quarter results after Tuesday’s close. The pros, on average, are targeting a 73% year-over-year (YoY) surge in revenue to $2.6 billion and a per-share loss of 92 cents, much narrower than the $2.67 per-share loss CZR incurred in the year-ago period.
Noteworthy earnings reports for today: $A, $CDNS, $CNP, $HALO, $HD, $KTOS, $M, $MELI, $MOS, $RNG, $TDOC, $SPCE.
What to trade today
As futures are in big red (S&P Fut: -1.70%), it will be very hard to find low-risk entries even for the shorts. Chasing stocks is very dangerous. If you have short stocks from last week, let them ride, but watch them closely.
Overall, the watchlist is on the short side. If not gapping down (too much) at the opening, I will look for breakdowns at:
$PATH
$PRFT
$AMZN
$INMD
$LCID
Even if there is only bad news in the market, please be very careful when trading these days. Please consider using 1/2 of a normal position and use tighten stops. Volatility can be very high and probably will form spikes in both directions.
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.