Trading Plan: 7 March 2022
Nasdaq (-1.66%) wasn't able to close above the EMA21, lost its short-term support and went down with important volume. This price action might signal a decreasing continuation. But as always, be prepared for all scenarios.
SP-500 also closed in red (-0.79%) with above the average volumes. The short-term at 4280 is still holding mostly due to the Energy and Utilities. The environment is not easy, a lot of news is coming from the Russian-Ukrainian war and there are a lot of uncertainties because of the FED meeting next week.
In the news
U.S. crude oil briefly tops $130 a barrel, a 13-year high on the possible Western ban of Russian oil.
Wheat futures flew over 40% this week and closed above $1,000 for the first time since Mar 8, 2010.
Palladium went above $3,000 per ounce for the first time since May 2021 as fears about supply difficulties from leading supplier Russia escalated.
February jobs rose a surprisingly strong 678,000, unemployment edged lower while wages were flat.
PayPal, Netflix, Visa, Mastercard, Microsoft, Google, Airbnb, etc. suspend their (part of) services in Russia over the Ukraine war.
Cathie Wood says she still expects to see ‘spectacular returns’ over the next 5 years.
Sectors
Best yesterday sector: Energy, then Utilities. Worst sector: Consumer Cyclical.
Best weekly sector: Energy, then Utilities. Worst sector: Financial.
Best monthly sector: Energy, then Basic Materials. Worst sector: Communication Services.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 30.30
VIX (neutral under 20): 31.98
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.95
CNN Fear & Greed: 17 (Extreme Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 37.13%
Stocks above SMA200 (neutral above 30): 31.61%
Number of stocks that increased yesterday by more than 4%: 229
Number of stocks that decreased yesterday by more than 4%: 663
Earnings Reports
Noteworthy earnings reports for today:
What to trade today
Nothing new in the market assessment, just up and down days with big movements. Volatility is not good for the swing trader as it is almost impossible to find a good low-risk entry on the daily chart.
There are good momentum plays, but most of them are extended now (Coal, Grocery Stores, Oils or Defense). And even if there are some good-looking patterns, due to the recent wide bars, the Stop Loss is beyond controlled risk.
U.S. Silica Holdings ($SLCA) has a long base and might continue the last days' uptrend. If breakout above the highs, Stop Loss at 4%.
Netflix ($NFLX) might break down under the black line if the market is going down. Stop Loss above the Friday high.
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.