Where Does Support Come Into Play? | Trading TSLA, ARKK, ABBV
We were prudent yesterday. Now where does support come into play?
Technical Edge
NYSE Breadth: 45.5% Upside Volume
NASDAQ Breadth: 39.9% Upside Volume
I’m happy with at how well the SPY trade has gone . We’ve hit our two upside targets and yesterday said we are “getting a little more defensive.”
In a tough tape, getting these wins are important for the account, but also for our mental bankroll.
Game Plan
The futures have been under pressure since Wednesday’s close and remain that way near the open, with the NQ and ES down about 2% and 1%, respectively. There were some warning signs with Wednesday’s action, such as poor breadth and weakness in ARKK and Bitcoin.
It’s healthy for the market to work off a little of this recent excess. But let’s see how it responds. I want to take today slowly and see how this gap-down is handled. Specifically, is it bought and the damage is contained or will the losses grow?
Let’s let the market show us its hand.
S&P 500
Yesterday we said: “I’m trimming into this morning’s rally and will re-evaluate.”
The “why” is pretty straightforward at this point (just look at the chart above) and we have written about it more than once.
From here, let’s see where support comes into play. Ideally it will be in the $449 to $450 area. That’s the December low, 8/10-day moving averages and the 50% retracement.
Below that and $444 and the 200-day are in play. Above this week’s high puts the 50-day on tap.
Individual Stocks & Go-To Watchlist — ARKK, TSLA, ABBV
Our plan to take profits yesterday near the open has paid off quite nicely and allowed us to regroup as the pace in the market picks up. Let’s see what today holds.
ARKK
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Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.
Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!