Market Review+Core Position Analysis (29/04-03/05 2024)
Last week in review 👉🏻Market Review+Core Position Analysis (22/04-26/04 2024)
“I've made as many mistakes in stock trading as many times as I was right, which has helped me grow both my career and my personal wealth. The key is asymmetric leverage; you make more money when you make a profit than when you lose, and you always get a return. This is the Holy Grail!” (All transactions only serve the profit curve of your account, nothing more) -Mark.Minervini
A quick review of this week's markets:
$NASDAQ 100 Index(.NDX.US$ Distributed on Tuesday and attracted funds on Friday;
$S&P 500 Index(.SPX.US$ Dispatched on Tuesday and Wednesday;
$Dow Jones Industrial Average(.DJI.US$ Distributed on Tuesday, divided on Friday.
NDX>DJI>SPX
The first 4 days of decline this week. The market opened sharply higher with the support of APPL earnings on Thursday and very good pre-market inflation data on Friday, but with the support of such superior external factors, SPX still failed to complete the “Follow-up Day (FTD)” and was almost all blocked below 50MA and the intensive trading zone above. From a trading psychology analysis, this position has a great advantage for traders to go short: the distance from the 50MA above and the “sky pool” is extremely short, that is, the stop-loss cost (risk) is extremely small... It will affect most markets Participants' behavior..
I will continue to wait patiently for the “hopeless bottom (huge trading volume)”, shake out, follow up day (FTD), etc. and the like before, because I believe the mentality of traders has not changed since ancient times.
NDX and SPX weekly charts:
As was consistent from last week's analysis, this week's large financial report boosted the overall trading volume. At first glance, it was two fund-raising weeks. If you look closely at the daily chart, you'll find that most of the increase comes from the upward jump gap. The gap comes from non-trading futures and stock trading. The trading volume is far less than that of the trading session. The daily chart also shows that this week's red candle trading volume still has a clear advantage.
Taken together, it is undeniable that the bears still have advantages in price, trading volume, and even mentality.
In terms of market sentiment:
The Fear & Greed Index began to fluctuate at the bottom and has not yet reached the extreme panic range;
The proportion of AAII watching cows has increased, and it continues to keep an eye on it.
Core holdings:
$CAVA Group(CAVA.US$ Shortly after opening on Friday, it broke through the red candle with the largest trading volume in recent times. In line with the pre-market market reaction to inflation data, they chose to buy a position of about 5%, but at the close, they saw insufficient trading volume and failure to achieve a follow-up date (FTD), and at the same time that the closing price reached a record high, the RS line failed to reach a new high, so they unconditionally chose to clear the position.
$Constellation Energy(CEG.US$ After the opening of the market on Friday, a fraudulent breakthrough was achieved. Although the trading volume was good at the close, and the closing price and RS line reached new highs at the same time, the follow-up date (FTD) was not achieved. Personally, I like to hold stocks when there is wind behind it (after the upward trend is confirmed), so I chose to exit all of them first.
$Applovin(APP.US$ Also, it broke through the recent high after opening on Friday, buying around 5%, but the volume was insufficient at the close, so of course the RS line wasn't outstanding, so I chose to just clear the position first.
$iShares Russell 2000 ETF(IWM.US$ Short sales of about 9% of positions at the close of Friday, moving average and tight trading zones and an upper gap advantage, small stop loss, no pressure to hold, target profit: 4%-6%.
$Invesco QQQ Trust(QQQ.US$ Short selling positions are still held. The original stop loss remains the same. It is easier to hold. Target profit: 4%-6% is enough.
Current cash position: 76.47%
“By increasing positions when trading is good and reducing positions when trading is bad, you trade the most when the trade is best and trade the least when the trade is worst. That's how you make a lot of money and protect yourself from disaster.” -Mark Minervini
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