Trading Plan: 31 October 2022
Nasdaq (+2.87%) made a scary :) reversal, gapping down first in the morning and then engulfing all the Thursday candle. The close was above the EMA21 with good volumes. After making higher lows, to start a new uptrend, the price target is to pass the resistance of 11270 and close above the SMA50. Volumes are now critical as they are the real pillars for a healthy new uptrend. If not, we might see lower prices and the 10.000 level broken.
SP-500 (+2.46%) made a stronger move and the price closed above the SMA50 with important volumes. If the price doesn't violate the Friday lows / EMA21 area, the price action might signal a consolidation in this area. Having a breakout later from this area will be healthy. Watching closely the next leg towards the SMA200. Always be prepared (and plan) for an opposite move.
In the news
As Musk Takes Over Twitter, Jack Dorsey Plans An Alternative.
GM temporarily suspends advertising on Twitter following Elon Musk takeover.
World food supplies at risk as Russia withdraws from Black Sea deal.
Another jumbo Fed rate hike is expected this week.
Sectors
Best yesterday sector: Technology, then Communication Service. Worst sector: Basic Materials.
Best weekly sector: Real Estate, then Utilities. Worst sector: Communication Services.
Best monthly sector: Energy, then Industrials. Worst sector: Consumer Cyclical.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 53.91
VIX (neutral under 20): 25.75
Put / Call Ratio (neutral between 0.7 and 1): 0.93
CNN Fear & Greed: 60 (Greed)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 61.66%
Stocks above SMA200 (neutral above 30): 36.29%
Number of stocks that increased yesterday by more than 4%: 470
Number of stocks that decreased yesterday by more than 4%: 124
McClellan Oscillator (neutral between -100 and 100): 215.48
Earnings Reports
Chevron’s CVX 0.00%↑ $11.2 billion quarterly profit soars past estimates. Exxon Mobil XOM 0.00%↑ blew away expectations, recording a $19.7 billion profit in the third quarter.
Noteworthy earnings reports for today:
This week's earnings:
What to trade today
Market seems to be in good momentum, the uptrend rally might be in place for at least a few more days. If trading this leg, use progressive exposure and consider not to be invested more than 25-40% until the price is above the SMA200.
Oil, Energy, and some Tech stocks are advancing and had a pretty good uptrend. Here are the top 20 industry groups:
Regarding the individual stocks, today I will watch: DCP 0.00%↑ LNG 0.00%↑ SRPT 0.00%↑ and DGII 0.00%↑.
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: