Markets consolidate gains as traction in new buys continues - Caution though, all eyes on the Fed
Markets hold up well as Fed anticipation builds. Riding the bounce cautiously, eyes glued till we reclaim the 50-day.
Tech largely consolidated today as the market waits for Wednesday’s big Fed event.
New buys have shown traction, with one of our newer names FCX powering higher, and a new buy making its way into the portfolio. We are managing risk by leaning on open profits to finance new risk, as per the usual plan.
Our market indicators today are showing a positive change under the hood (charts below)
We have a massive week of economic data ahead, and the indexes remain below their 50-day moving averages - a far cry from the ‘easy dollar’ environment we swing traders look for.
Let’s take a look at our plan for tomorrow, and review our portfolio which saw a new addition, the indexes, our market indicators, & more.
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Today’s newsletter
Index review
Market timing indicator
Watchlist/trade ideas
Portfolio review
1. Indexes update
QQQ - This index put in a constructive day, reclaiming its 21ema. A positive no doubt, but the real challenge remains with the 50day and 10-week MA above. Anything can happen come Fed day.
IWM - This index also managed to reclaim the 21ema but faces a similar test, more significant move averages above. We’ve seen a nice multi-day bounce, and some back and fill is totally normal here.
SPY - This index tested its 50-day moving average before pulling back. Some digestion here would be ideal. It’s important we do not reject hard and break down from this level.
Gold
Gold continues to hold up beautifully above the 21 day ema. Price is getting very tight, and the volume is decreasing beautifully. On close watch for an entry.
2. Trade ideas-Watchlist-System Signal
Our new positions have shown decent traction, and despite us being in far from a strong swing trading environment, individual stock action has been impressive.
With massive earnings reports and economic data releases coming on Wednesday, it is important to ensure some cushion on new positions. Getting too aggressive before such an event can lead to a large drawdown in the event of if a bad reaction.
Let’s take a look at our ideas for tomorrow, and market indicators
TRADE IDEAS - Note, that all entries are marked on the chart (green line) and stop losses are low of day OR the prior day’s low, unless written otherwise. Please feel free to use discretion and use whatever stop-risk level you are comfortable with. Most of the time, I use the low of day (0-1.5% stops typically).
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