Trading Plan: 4 March 2022
Nasdaq (-1.56%) down again with higher than average volumes. Still in the flag, but this volatility can send the price very fast in new territories. Continue to watch the price action and look for a solid and better base before entering new positions.
SP-500 (-0.53%) builds a higher low while closed in the red. Again, not a constructive price action, still looking for a FTD (follow-through day) and a real breakout before having a positive assessment of the market.
In the news
The world could be on the brink of an energy crisis rivaling the 1970s.
Russian forces attacked Europe’s largest nuclear power station.
Retailers start to warn of the business impact of Russia’s invasion of Ukraine.
Wheat futures soared 7.08% and closed positive for the ninth consecutive session.
Sectors
Best yesterday sector: Utilities, then Basic Materials. Worst sector: Consumer Cyclical.
Best weekly sector: Basic Materials, then Energy. Worst sector: Consumer Cyclical.
Best monthly sector: Basic Materials, then Energy. Worst sector: Consumer Cyclical.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 30.30
VIX (neutral under 20): 30.48
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.94
CNN Fear & Greed: 22 (Extreme Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 38.25%
Stocks above SMA200 (neutral above 30): 33.13%
Number of stocks that increased yesterday by more than 4%: 148
Number of stocks that decreased yesterday by more than 4%: 524
Earnings Reports
Gap shares rise after retailer issues strong earnings guidance, despite a weak revenue outlook. Sweetgreen shared its first quarterly report since going public in mid-November, reporting impressive sales growth and widening losses. Kroger upbeat for 2022 as grocery demand, online deliveries power sales. Best Buy blasted 9.22% after announcing record earnings and revenue during FY22. Broadcom surpassed projections on the top and bottom lines for its fiscal first quarter, propelling the semi stock 3% in extended trading. The company’s sales projection for the second quarter was also higher than expected.
Noteworthy earnings reports for today:
What to trade today
These up and down days with big movements because of the volatility are the trader’s nightmare. It is almost impossible to find a good low-risk entry. Preserving the capital and mental capital is essential. No FOMO. Wait for the right setups.
No plan to trade today. Just watching, you may want to see the watchlist from yesterday's Trading Plan.
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.