Trading Plan: 23 September 2022
Nasdaq (-1.37%) continued its downtrend (in a way as expected after the previous day's weak close) with above-average volumes. Having another distribution day, the odds are to see lower prices in the short term. Watching for a new base to be built.
SP-500 (-0.84%) had also another distribution day and the price seems to keep going lower and lower. Watching the previous supports and waiting patiently to see a base forming.
In the news
Stocks Close Lower as More Central Banks Raise Rates.
Ford to restructure the supply chain following $1 billion in unexpected quarterly costs.
JPMorgan CEO Jamie Dimon: Crypto Tokens, Bitcoin Are 'Decentralized Ponzi Schemes'.
Target plans to hire 100,000 seasonal workers for the holidays and start deals early. Walmart plans to hire 40,000 workers for the holiday season.
U.S. home sales declined for the seventh month in a row. The luxury housing market took its biggest dive in 10 years.
Sectors
Best yesterday sector: Healthcare, then Communication Services. Worst sector: Consumer Cyclical.
Best weekly sector: Consumer Defensive, then Utilities. Worst sector: Consumer Cyclical.
Best monthly sector: Utilities, then Healthcare. Worst sector: Technology.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 29.59
VIX (neutral under 20): 27.35
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.16
CNN Fear & Greed: 31 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 16.21%
Stocks above SMA200 (neutral above 30): 22.27%
Number of stocks that increased yesterday by more than 4%: 86
Number of stocks that decreased yesterday by more than 4%: 628
McClellan Oscillator (neutral between -100 and 100): -195.50
Earnings Reports
Darden Restaurants DRI -1.79%↓: results were mixed with its earnings per share of $1.56 meeting estimates. However, its revenues of $2.45 billion missed expectations by $0.02 billion.
No noteworthy earnings reports for today.
What to trade today
I read a very nice story yesterday on Twitter by Frank Gretz (Wellington Shieldson) and I want to share it here with you:
“A technical trader and a fundamental trader were out to dinner and a sharp knife fell off the table. The technical trader moved his foot while the fundamental trader was stabbed and bled profusely. When the technical guy asked the fundamental guy why he didn’t move his foot, the fundamental trader replied:
– I thought it was going back up”.
This is not a time to hope, pray, catch falling knives or stay fully invested in the market. Protect the capital you have and be prepared to start trading when conditions are met. Mostly all good stocks took a sand bite yesterday and until we see a bottom forming and a new base for a possible reversion, sit on your hands and… wait. Patiently.
However, I tried a small short on $TOL.
Texas Instruments TXN 0.00%↑ might break the support if the market continues to be weak. Stop Loss: ~4%.
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: