Trading Plan: 11 May 2022

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Indexes
  1. In the news
  2. Sectors
  3. Sentiment
  4. Breadth
  5. Earnings Reports

Nasdaq (+0.98%) tried to reverse and it closed higher by an inside candle. Still under all the main averages, so there is no magic here. If the inflation report has better than expected results, we might see a positive rally for a few days. For a long time approach, we need a base, a Stage 1 base. The longer, the better.

SP-500 (+0.25%) closed higher than the day before. Everything can happen, no signs of a bottom, so be careful. A small relief is expected, but do not become too optimistic until a new trend is confirmed.

In the news

Investors are betting that today’s inflation report will show the worst is behind us.

Biden says the White House could drop Trump China tariffs to lower consumer prices.

Controversial stablecoin UST — which is meant to be pegged to the dollar — plummets below 50 cents.

Natural-Gas Prices Rise in Europe After Ukraine Cuts Flows.

Sectors

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

Sentiment

  • NAAIM (weekly, neutral between 70 and 90): 57.18
  • VIX (neutral under 20): 32.99
  • Equity Put / Call Ratio (neutral between 0.7 and 1): 1.00
  • CNN Fear & Greed: 23 (Fear)

Breadth

  • Stocks above SMA40 (neutral between 30 and 80): 14.83%
  • Stocks above SMA200 (neutral above 30): 21.74%
  • Number of stocks that increased yesterday by more than 4%: 259
  • Number of stocks that decreased yesterday by more than 4%: 422
  • McClellan Oscillator (neutral between -100 and 100): -153.45

Earnings Reports

Coinbase revenue drops 27% from a year ago and stock slides. Roblox shares sink on disappointing revenue and wider-than-expected loss. SoFi stock falls after the fintech firm accidentally releases the first-quarter report early. A.I. lender Upstart shares plummet more than 50% after the company cuts the full-year revenue forecast. Peloton shares fall after the company posts huge losses and offers weak guidance.

Walt Disney ($DIS) will report its fiscal second-quarter earnings results after the May 11 close. Consensus estimates are for earnings per share (EPS) of $1.06, up 34.2% year-over-year (YoY) and revenue of $18.8 billion (+20.1% YoY).

Other noteworthy earnings reports for today:

What to trade today

The market is very unbalanced. A relief rally after the CPI report today might occur if the results show that inflation has already peaked (~under 8%).

Keep in mind that FED interest rates might not let the market go too high.

If the inflation is higher than 8.5%, the market might go south.

VIX is higher than 30 and the market is in an oversold condition.

A lot of news is still pending, so for me, definitely this is not the best market to trade. Just watching.

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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