Trading Plan: 23 March 2023
Nasdaq (-1.60%) began the day on a positive note, even before the FED news, but the last hour of trading was brutal, sending the price lower to close the previous day's gap. The high of the day was in a resistance area and some sell-off was not out of ordinary. Watching yesterday’s high vs. key averages and recent lows.
SP-500 (-1.65%) had also a roller-coaster day, up, down, up, and… then erased all the gains of the week when investors realized the FED speech is not about a soft landing for the economy. The price found support at SMA200. Watching the SMA50 vs. recent lows.
In the news
Stock futures are rising, after indexes closed sharply lower Wednesday when the Federal Reserve raised interest rates by a quarter-point.
Swiss central bank hikes interest rates by 50 basis points despite Credit Suisse CS 0.00%↑ turmoil.
Everybody's talking about deposit insurance.
OpenAI tech gives Microsoft's MSFT 0.00%↑ Bing a boost in the search battle with Google GOOGL 0.00%↑ .
Ford F 0.00%↑ is about to break out big EV losses for the first time.
Sectors
Best yesterday sector: Consumer Defensive, then Technology. Worst sector: Real Estate.
Best weekly sector: Communication Services, then Technology. Worst sector: Real Estate.
Best monthly sector: Communication Services, then Technology. Worst sector: Real Estate.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 53.21. A small increase from last week, but the number is still low.
VIX (neutral under 20): 22.26. higher than the day before. It is better to have it under 20.
Put / Call Ratio (neutral between 0.7 and 1): 0.92. The number is in the normal range.
CNN Fear & Greed: 36 (Fear). Better than last week, but we are still in the Fear zone.
Breadth
Stocks above SMA40 (neutral between 30 and 80): 16.65%. Still in the lows and the pattern looks more like a bear flag. A level below 30 is not a healthy sign.
Stocks above SMA200 (neutral above 30): 37.11%. The number is declining, so not a good sign.
Cumulative 4-Week Hi-Low & Volume Index continued the downtrend. We want to see new highs and new volumes entering the market, not money going out of the market. Watching for a pause first.
Nasdaq Advance / Decline Line lost again its previous low level, the outlook seems bearish.
Number of stocks that increased yesterday by more than 4%: 89
Number of stocks that decreased yesterday by more than 4%: 429
McClellan Oscillator (neutral between -100 and 100): -73.56. Neutral, we might see bigger negative levels.
Earnings Reports
Analysts are upbeat toward Darden Restaurants ahead of the Olive Garden parent's fiscal third-quarter earnings report. Analysts, on average, expect $DRI to report fiscal Q3 earnings of $2.23 per share (+16.8% YoY) on revenue of $2.7 billion (11.6% YoY).
Other noteworthy earnings reports for today:
(These are the stocks to watch for a possible earnings gap).
What to trade today
The best indicator for the market is the watched stocks (you may want to see the previous trading plan). Besides PERI 0.00%↑ (no position) which had a buyable pattern, there's no evidence of traction.
Otherwise, I am not lured in by companies that mark new ATHs and I will wait patiently for my conditions to show up.
Even if the market turns up, with all the negative signals described above, I do want to be the first at the party.
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.
In order to learn more about trading, you may want to read: