Trading Plan: 12 May 2022

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

Nasdaq (-3.18%) continued the downtrend as the investors are feared of the environment. We are at ~30% off the highs with no signs of a bottom yet. I updated the graph with the next support levels. There is a void of 500 points to the downside.

SP-500 (-1.65%) tried a reversal in the morning, but the sandcastle was soon wiped out. Due to the oversold conditions, we might see a pullback, but I would not trust it if the case. Watched the support levels marked with black lines. Very risky environment, cash is king.

In the news

Bitcoin tumbles below $27,000 for the first time since December 2020 as the crypto sell-off intensifies.

Controversial stablecoin UST - which is meant to be pegged to the dollar - plummets below 30 cents.

Inflation barreled ahead at 8.3% in April from a year ago, remaining near 40-year highs. Stocks Fall After U.S. Inflation Data

Apple is no longer the world’s most valuable company (Oil giant Saudi Aramco is now the world’s most valuable company).

Sectors

  • Best yesterday sector: Energy, then Utilities. Worst sector: Consumer Cyclical.
  • Best weekly sector: Utilities, then Consumer Defensive. Worst sector: Consumer Cyclical.
  • Best monthly sector: Energy, then Consumer Defensive. Worst sector: Consumer Cyclical.

Sentiment

  • NAAIM (weekly, neutral between 70 and 90): 57.18
  • VIX (neutral under 20): 32.56
  • Equity Put / Call Ratio (neutral between 0.7 and 1): 1.16
  • CNN Fear & Greed: 19 (Fear)

Breadth

  • Stocks above SMA40 (neutral between 30 and 80): 12.35%
  • Stocks above SMA200 (neutral above 30): 20.70%
  • Number of stocks that increased yesterday by more than 4%: 133
  • Number of stocks that decreased yesterday by more than 4%: 123
  • McClellan Oscillator (neutral between -100 and 100): -176.25

Earnings Reports

Disney shares slip after the earnings report, as Covid closures take a toll on parks in Asia. Beyond Meat shares tumble after jerky launch leads to wider-than-expected loss.

Affirm Holdings ($AFRM) has not been immune to broad-market troubles in 2022, with shares down more than 75% for the year-to-date. Consensus estimates are for the company to record a per-share loss of 53 cents for the three-month period, an improvement over the $1.06 per-share loss it reported in the year-ago period. Revenue, meanwhile, is expected to climb 73.6% YoY to $344.0 million.

Other noteworthy earnings reports for today:

What to trade today

Many hodlers discovered the real meaning of the first three letters in crypto. Always respect risk.

This environment is not ideal for the trend following trader. There are no setups for low-risk longs and the market is way too oversold for a low-risk short also.

So, just watching. No FOMO. Waiting for a (new) base.

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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