✏️ Weekly Report: Volatility makes Cash the King again

2 мая

GENERAL COMMENTS

Today, the Federal Reserve maintained its interest rates unchanged, highlighting the ongoing challenges in curbing inflation. Initially, this announcement propelled the markets upwards, but a sharp downturn occurred in the final hour, leading to a decline as the day concluded.

The erratic market behavior demonstrated today makes it increasingly challenging to maintain positions in momentum stocks, and the majority of this quarter's earnings reports have been underwhelming. This situation underscores the strategy that cash remains paramount, complemented by selective, quick trading opportunities, as depicted in the following charts.

I will begin tonight's chart analysis with the Nasdaq-100 (QQQ).

QQQ
The Qs are forming a bearish formation. What is worrying is that this is below the 50D Simple Moving average. As trading is a probabilities game, we can conclude that this leads to probabilities being lower that we continue to the downside. However, the direction of the general market indexes are very well influenced by the fundmental story of the economy health.

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SMTC
SMTC is up $4 from the $33 Buy Point (alerted in previous versions of this idea - go and check. Believe and Follow). This peaked yesterday with about +20% profit since the alert last week. Of course the way I manage this is never to let this to turn into a loss. My general go to tool is to take half here.


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KLAC
KLAC fell back to $687 after missing earnings. This of course stopped me out - but at no loss, since I move stopped up to break-even.


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SMCI
The stock missed its earnings and suffered a severe reaction of a gap down and drop -20% on the intraday.


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NVDA
NVDA slashed below the 50D SMA and this stopped me out. Waiting and watching this TML during its base building period.


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GS
Up $7 from the $419 buy point with stop raised to $416 just in case.


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CRM
CRM is prone to go lower if the market continues falling. A break below $266.50 is great place to short.


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LLY
Gapped up on good earnings. The next technical buy point is $801 accommodated with heavy volume.


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MRNA
Earnings are due out tomorrow. If earnings are good then zooming through the $116 on good volume is a great technical buy point

2 мая

Заметка

Key Takeaways:
- The market has experienced notable downturns over the past couple of days, with significant losses recorded.
- The dramatic whipsaw occurred today, oscillating from substantial losses to a break-even point before reverting to losses again.
- The current market conditions are worsening, prompting recommendations for defensive strategies.
- A clear follow-through day is required to signal a potential positive shift in the market trend.
- Historically, substantial initial losses often precede significant trading opportunities and profitable years.

DETAILS
Market Recap:
- The last two days have witnessed considerable declines in the market.
- Today featured a severe whipsaw, with the market initially recovering losses only to fall again later.
- Attempts to capitalize on the upward movement were thwarted by a late-day market downturn, marking one of the worst whipsaws observed.
- Market conditions continue to degrade, and a defensive approach is advisable.
- A definitive follow-through day is necessary to indicate a trend reversal.

Managing Losses:
- Trading sometimes entails enduring losses.
- Persistence and resilience are crucial; it's important to continue engaging and not be disheartened.
- Despite today's challenges, continuing with activities like podcasting can be therapeutic.
- Trading is tough, and not everyone is cut out for the stress it involves.
- Success in trading often requires doing the necessary tasks at challenging times.
- Significant trading years and deals typically begin with losses.

Individual Stocks:
- Discussion above includes updates on stock actions for MRNA, LLY, CRM, GS, NVDA, SMCI, KLAC, SMTC.
- The Indian market is performing well, which is promising for MakeMyTrip (MMYT).
- DELL shows strong fundamentals, though its chart pattern remains ambiguous.
- Concerns arise with breakdowns in stocks like AMD and AVGO.
- t's crucial for stocks to recover above their 50-day moving averages.

Positions and Plans:
- Current strategies involve a defensive stance, maintaining substantial cash reserves and hedges.
- Plans to increase long positions upon a valid follow-through day are in place.
- Anticipate that futures will present more significant opportunities once the market conditions improve.

Next Steps:
- Maintain a defensive posture and await a legitimate follow-through day.
- Keep a long-term perspective and stay optimistic about forthcoming significant trades.
- Prepare to regroup and tackle the market anew tomorrow.