Trading Plan: 2 May 2022. Nasdaq (-4.17%) broke all the recent… | by Laurentiu Chisca | May, 2022 – DataDrivenInvestor

Nasdaq (-4.17%) broke all the recent lows and the price seems to go even lower. Watching 12100 and 10800 levels. Cash is also a position for the swing trader.

SP-500 (-3.63%) just reach the critical level (this year’s lows) and we might see lower prices. A (small) pullback is likely to happen if taking into account the oversold condition – see McClellan Oscillator at -111.34. Watching 4050 and 3850 areas.

In the news

Chip supply issues are still giving some of the world’s biggest companies a major headache.

Amazon has bold ambitions to take on SpaceX in the satellite internet business.

Warren Buffett gives his most expansive explanation for why he doesn’t believe in bitcoin.

Can crypto go green? Major companies are trying — but it’s easier said than done.

Sectors

  • Best yesterday sector: Basic Materials, then Healthcare. Worst sector: Real Estate.
  • Best weekly sector: Energy, then Technology. Worst sector: Basic Consumer Cyclical.
  • Best monthly sector: Consumer Defensive, then Energy. Worst sector: Communication Services.

Sentiment

  • NAAIM (weekly, neutral between 70 and 90): 46.25
  • VIX (neutral under 20): 33.40
  • Equity Put / Call Ratio (neutral between 0.7 and 1): 1.33
  • CNN Fear & Greed: 27 (Fear)

Breadth

  • Stocks above SMA40 (neutral between 30 and 80): 27.03%
  • Stocks above SMA200 (neutral above 30): 28.35%
  • Number of stocks that increased yesterday by more than 4%: 127
  • Number of stocks that decreased yesterday by more than 4%: 479
  • McClellan Oscillator (neutral between -100 and 100): -111.34

Earnings Reports

Berkshire‘s earnings decline in the first quarter on slowing economic growth. The company’s net earnings came in at $5.46 billion, down more than 53% from $11.71 billion in the year-earlier period.

Noteworthy earnings reports for today:

This is not an easy market, I do not recommend trading for beginners. Volatility is higher than 30 and the big moves can ruin the bets. If trading, you may consider using smaller positions (1/3 – 1/2 of the normal size) and / or progressive exposure.

Even if the market may continue to go down, there are fewer low-risk patterns on the short side. There are some nice-looking bullish patterns as well, but generally, they do not work well if the overall market is weak.

Patience is a virtue. Do not chase the big movers stocks now, it is too dangerous as their moves didn’t start from a strong pattern. No FOMO.

Just watching the market today and the last week’s stocks already presented in the previous Trading Plans.

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:

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