Trading Plan: 5 October 2022

Nasdaq (+3.34%) gapped up and continued higher towards its EMA21. The volumes were strong, above the average. The close was also strong, the price closing at the highs of the day. The next resistance (11300–11500 area) is a real test for seeing if the trend is powerful enough to break it. $NASDAQ(.IXIC)$

SP-500 (+3.06%) also gapped in the morning and went higher with important volumes. Watching the 3900 level and seeing if money keeps on entering the market. Of course, keeping an eye on the recent low as well. $S&P 500(.SPX)$

In the news

Twitter TWTR 20.53%↑ confirmed that it received Musk’s letter of intent to complete the transaction at $54.20/share and intends to close the deal. $Twitter(TWTR)$

Micron MU 1.49%↑to spend up to $100 billion to build a computer chip factory in New York. $Micron Technology(MU)$

Amazon AMZN 1.47%↑Freezes Corporate Hiring in Its Retail Business. $Amazon.com(AMZN)$

Ray Dalio gives up Bridgewater’s control as part of the succession plan.

Rivian RIVN 6.14%↑says it’s on pace to meet 2022 goals after production grew 67% in the third quarter. $Rivian Automotive, Inc.(RIVN)$

Sectors

Best yesterday sector: Consumer Cyclical, then Technology. Worst sector: Consumer Defensive.
Best weekly sector: Energy, then Basic Materials. Worst sector: Utilities.
Best monthly sector: Basic Materials, then Healthcare. Worst sector: Real Estate.

Sentiment

NAAIM (weekly, neutral between 70 and 90): 12.61
VIX (neutral under 20): 29.07
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.99
CNN Fear & Greed: 30 (Fear)

Breadth

Stocks above SMA40 (neutral between 30 and 80): 27.06%
Stocks above SMA200 (neutral above 30): 24.9%
Number of stocks that increased yesterday by more than 4%: 1267
Number of stocks that decreased yesterday by more than 4%: 64
McClellan Oscillator (neutral between -100 and 100): 68.49

Earnings Reports

Noteworthy earnings reports for today: $Helen Of Troy(HELE)$ $RPM International Inc(RPM)$

What to trade today

Market went up and many stocks ignited once the pressure was off. Even if the move was solid, I would like to see if this new leg up is strong before entering the market.

There were many ‘not bad’ entries yesterday, but I didn’t buy anything, I just prefer a tighter price action, more skyscrapers (big volumes bars), decreased volatility and of course better low-risk entries.

Of course, it is nothing wrong if you entered and have good advance. Price action for the day was fine.

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