Trading Plan: 26 August 2022
Nasdaq (+0.1.67%) tested the minor support, had small consolidation there and made this level stronger support. The close above the EMA21 with volumes higher than the day before seems constructive and we may see future developments to the upside. Watching the marked channel for now. Do not forget about Powell’s speech later today, we may see some volatility.
SP-500 (+1.41%) snapped back from its recent lows and ignited from the EMA21. Closing above the EMA21 with a higher volume than yesterday is a good thing (not the greatest, as the volumes are below average). Watching the path to its SMA200, the real test. But keeping an eye on the recent lows. As always.
In the news
A likely scenario is that Powell will endorse the retightening of financial market conditions.
Meta to debut a new VR headset in October.
UK energy bills to rise by 80% in October as regulator announces hike.
Musk's SpaceX and T-Mobile plan to connect mobile phones to satellites and boost cell coverage.
GDP shrank at revised 0.6% rate in the second quarter, signaling the US remains in a technical recession.
Tesla stock is set for 3-for-1 split.
Amazon strikes green hydrogen deal with fuel cell maker Plug Power, sending shares up.
Sectors
Best yesterday sector: Basic Materials, then Consumer Cyclical. Worst sector: Consumer Defensive.
Best weekly sector: Energy, then Basic Materials. Worst sector: Technology.
Best monthly sector: Energy, then Utilities. Worst sector: Healthcare.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 54.86
VIX (neutral under 20): 21.78
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.89
CNN Fear & Greed: 49 (Neutral)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 61.97%
Stocks above SMA200 (neutral above 30): 30.98%
Number of stocks that increased yesterday by more than 4%: 329
Number of stocks that decreased yesterday by more than 4%: 104
McClellan Oscillator (neutral between -100 and 100): 6.66
Earnings Reports
Peloton PTON 0.00%↑ shares plummet after the company reports a big loss and declining revenue. Gap GPS 0.00%↑ withdraws 2022 financial outlook as Old Navy sales fall in the second quarter.
Noteworthy earnings reports for today:
What to trade today
The market had a good momentum on yesterday and all the sectors closed in green. This seems a very optimistic move just before Powell’s today speech. Yesterday, Tom Basso said it very nicely in a tweet: “Stocks seem to be defying economic logic. We are clearly in a recession. Interest rates are increasing. Housing slowing. The market will do what the market will do it seems to me”. In a nutshell, the market doesn’t care about our thoughts, price action is the king.
I do not recommend opening new positions today, the risk of volatility (including spikes in both directions) is high. Instead, I do recommend verifying the already opened trades TH 0.00%↑ LNTH 0.00%↑ SWAV 0.00%↑ ENPH 0.00%↑ ACLS 0.00%↑ RXDX 0.00%↑ CELH 0.00%↑ OXY 0.00%↑ TMDX 0.00%↑ and adjusting the Stop Loss, if the case of course. You may consider using a smaller position size until the price is above SMA200.
I will watch:
Digi International $DIGI is consolidating above the EMA 21. A price above the black line might work. Stop Loss: EMA10.
TH 0.00%↑ as I already tweeted:
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.
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