DayTrading GamePlan

S&P 500 futures trading lower in overnight sessions in Asia and Europe.   Investors concerned on the Federal Reserve plans to taper stimulus before end of 2021.  Immediate risk is to the downside with a test of the rising 50 day moving average at 4345.  Many individual stocks have already entered short term bearish trends.  Commodity stocks are also weak with Oil and Copper prices gapping down.  Copper prices are down nearly 10% this week alone.

Traders may bounce rally at the open to work off very short term oversold conditions on the hourly chart.  Look for a move towards 4390 from the current 4360 futures quotation.   Then sell into the strength or add Puts as markets will remain weaker into the Jackson Hole symposium next week.  Which is were we will hear more in-depth about taper plans.

Stocks to focus on are those with high P/E ratios.  Tech stocks such as Nvidia and Roku will be targeted for short selling or will be under selling pressure.   Vaccine stocks such as Moderna, Pfizer and Novavax will also be under pressure as the US CDC suggests a 3rd booster shot.  This puts into question the efficacy of the current vaccine.  Healthcare stocks remain in an uptrend and are diverging from the current trends of the broader indexes.  Any pullbacks in Abbvie or Gilead could be used to accumulate or add to current positions.

Investors and day traders should manage risks within the rising volatility.

DayTrading Gameplan  – Results;

Excellent trend identification and execution.  The morning played out as written.  For improvements we can try to hold for capturing more upside (calls) and more downside (puts).