Trading Plan: 4 February 2022
Nasdaq was hit hard yesterday (-3.74%) and Meta ($FB) had an important participation in this (-25.23%). Even the volumes were not big, such a negative move may signal the market is going to test the lows.
SP-500 (-2.44%) was also hit and now it wants to visit again the SMA200. It seems the news was a big factor for the indexes, first good earnings on Apple and market it’s up for 4 days. Meta, bad earnings, market is really hit. Now, Amazon, good earnings. Hey market, what are you going to do?!
Amazon shares rallied in extended trading Thursday after the company posted a big earnings beat for the fourth quarter, helped by a gain on its investment in electric vehicle company Rivian.
Snap soared 58% in extended trading after recording its first profitable quarter ever. $SNAP also exceeded earnings and sales estimates. Daily active users grew by 20%. EPS: $0.22 (vs. $0.10 expected) | Revenue: $1.3 billion (vs. $1.2 billion expected).
Pinterest improved 17.3% in extended trading after the social media company topped $2 billion in annual revenue for the first time. $PINS | EPS: $0.49 (vs. $0.45 expected) | Revenue: $847 million (vs. $827.4 million expected).
$BILL reported exceptional earnings, up 19% after-market. Can be this a catalyst for the growth stocks?!
U.S. oil prices top $90 a barrel for the first time since 2014.
Sectors
Best yesterday sector: Consumer Defensive, then Utilities. Worst sector: Communication Services.
Best weekly sector: Communication Services, then Technology. Worst sector: Energy.
Best monthly sector: Energy, then Financial. Worst sector: Consumer Cyclical.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 62.54
VIX (neutral under 20): 24.35
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.09
CNN Fear & Greed: 33 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 25.15%
Stocks above SMA200 (neutral above 30): 29.23%
Number of stocks that increased yesterday by more than 4%: 96
Number of stocks that decreased yesterday by more than 4%: 339
Noteworthy Earnings Reports / Events for today
What to trade today
Oils seem to dance after their own music and $MTDR has a nice pattern. If it advances will volume, an entry can be at $46.23 with a Stop Loss at 43.34.
This is not a time to be aggressive at all in the market. The conditions are not present, the trend is changing from one day to another. Richard Wyckoff said that “Successful tape reading is a study of Force; it requires the ability to judge which side has the greatest pulling power and one must have the courage to go with that side”. Until we will see which side has the greatest power, we will wait patiently.
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.