R U Ready for a "FOLLOW THRU" Day
Don't Be Bearish Now
Labour day weekend got off to a bad start after the market attained its peak on Wednesday Sept 2nd. Within 3 trading sessions, $QQQ (proxy for Growth Stocks) dropped precipitously from the 5 day simple moving average (sma) down to the 50 day sma. That was a -10% drop.
Ouch ! Ouch! Ouch!
I know a lot of retail traders and investors were just blind sided and no one expected for the market to drop so fast and furious. Rate of drop was twice as fast as the one we experienced after attaining all time high on Feb 19th. $QQQ went on to correct almost -35% within 5 weeks. Market began to rally soon after March 23rd lows and we attained a gain of +63.34% in the next 21 weeks. That's a phenomenal performance for $QQQ.
Currently "Market is in Correction" as of Wednesday Sept 23rd according to IBD (Investors Business Daily). Surprisingly, market has attempted to rally in the last 2 days but volume has been lack luster. Institutions have to come in and lift $SPY as well as $QQQ in volume that is above average daily trading volume. We have history on our side. October through April traditionally are the best months in the market. During the second term Presidential election period, incumbents tend to do what ever they can to stimulate the economy. Central banks have sent a very clear message to the politicians that interest rates are going to remain low for the next 2 years or more. Instead of being consumed with the media on the news of the virus or politics of the elections, it's best to use the time wisely and instead develop a stock watch list. This may be the most critical week in case the market attempts to rally and we get a "Follow Thru" day established.
No one can predict what the stocks or the market will do next week. It's prudent to plan for all possible scenarios and not have an opinion on what the market will do on any given day.
"If THIS happens than I do THAT"
"If THAT happens than I do THIS"
It's what profitable traders and investors do when they develope a TRADE PLAN for every stock they buy or sell - either for profit or for a small loss.
Stock Watch List
I have thrown a wide net to identify stocks that are:
- Held up closer to the 21 day sma and away from the 50 day sma.
- Trading tightly and orderly with very little give back since Sept 2nd.
- Stocks that are supported by the institutions and show signs of accumulation.
I have indicated in parenthesis areas of support or resistance. Those numbers will change daily as the market makes progress. These numbers are just a guide post for me and it's not to be construed as recommended areas of buy points.
- $AAPS (27.92)
- $AVGO (362.07)
- $BBY (108.44)
- $BIG (49.10)
- $CPRT (104.28)
- $DG (201.28)
- $DHI (71.83)
- $DKS (54.85)
- $DOCU (217)
- $FDX (233.67)
- $FIVE (115.17)
- $FVRR (123.61)
- $GSX (92.0)
- $HIBB (36.96)
- $HZNP (74.97)
- $LEN (76.69)
- $LOGI (71.79)
- $MTH (99.24)
- $NVDA (512.35)
- $NKE (113.75)
- $NIO (18.56)
- $NTRA (65.66)
- $PTON (84.63)
- $RH (328.74)
- $ROKU (166.18)
- $SHAK (67.81)
- $SNAP (23.96)
- $SQ (151.98)
- $STNE (52.21)
- $TGT (154.69)
- $TTD (471.12)
- $TTGT (40.26)
- $TWTR (40.80)
- $VEEV (270.98)
- $W (61.60)
- $WMT (134.13)
- $YNDX (61.40)
- $ZG (92.65)
- $ZM (478)
- $ZS (137.03)
Happy Trading !
AMIN
Option Trader | Growth Stock Investor | Blogger | Mentor
4 年We had a good day in the market Mon 9/28. Volume was lacking though. 25 of my list of 40 stocks out performed the $SPY today. We could have a convincing "Follow Thru" day of volume picks up - showing conviction from the institutions. Just posted another post as a follow thru post on "Timing the Market"