Trading Plan: 5 July 2022
Nasdaq (+0.90%) closed higher than the previous session with lower volume. Not a very good day, but the constructive part is that the price didn’t violate the Thursday low. We are still in a downtrend (EMA10 < EMA21) and there is no reason to make forecasts. Watching: the recent lows and the channel line for a possible breakout.
SP-500 (+1.06%) made also a green candle with low volumes. Until we see a trend and some strong bottoming signals, trend-following trading is risky. Watching for higher lows and a breakout above the downtrend line + volumes coming in! If the price breaks the support at 3600, we might see lower and lower prices.
In the news
Tesla Vehicle Deliveries Tumble After China Factory Shutdown (254,695 electric vehicles delivered in the second quarter of 2022).
Falling Commodity Prices Raise Hopes That Inflation Has Peaked.
Opinion: Stocks could drop 50%, Nouriel Roubini argues. Things will get much worse before they get better.
Federal Reserve Chair Jerome Powell admits 'we now understand better how little we understand about inflation' and insists 41-year high prices were 'unpredicted'.
Eurozone inflation hits a record 8.6% as the European Central Bank prepares for its first rate hike in 11 years.
Sectors
Best yesterday sector: Utilities, then Consumer Cyclical. Worst sector: Technology.
Best weekly sector: Utilities, then Energy. Worst sector: Technology.
Best monthly sector: Healthcare, then Consumer Defensive. Worst sector: Energy.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 30.66
VIX (neutral under 20): 26.70
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.96
CNN Fear & Greed: 25 (Extreme Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 27.79%
Stocks above SMA200 (neutral above 30): 18.39%
Number of stocks that increased yesterday by more than 4%: 261
Number of stocks that decreased yesterday by more than 4%: 138
McClellan Oscillator (neutral between -100 and 100): 21.58
Earnings Reports
No noteworthy earnings reports for today.
What to trade today
Just a reminder we are still under all the main averages: EMA21, SMA50 and SMA200. Even if there are some sectors that might reverse the actual downtrend (Chinese, Bio or Solar), the overall context is weak. Do not try to be the first.
Very good breakout: HUM 0.00%↑. Watching.
Constructive advances: VRTX 0.00%↑, UTHR 0.00%↑, ENPH 0.00%↑, BABA 0.00%↑, JD 0.00%↑, MGPI 0.00%↑ , SAFM 0.00%↑, UFPT 0.00%↑ .
Cash is king. No plan to trade today.
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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