Notes From The Editor

Romancing An Emotional Market

Do you ever get mad at the stock market? Lot's of traders do. Are there times that you feel like you really love it? You're not the only one. Almost everyone seems to adore the market when it's going up, and hate it when it's going down.

In fact, many traders relate to the stock market as if it were a living person. The daily price action becomes very personal to them. They act mistreated when things don't go their way, and then stop just short of sending flowers when the money-moments arrive. This type of love- hate relationship certainly comes at a high cost, both emotionally and mentally.

In reality the market doesn't care how we feel. It can't see us when we laugh, or hear us when we cry. It doesn't even know that we exist. The market won't try to help us, nor try to hurt us. It has no feelings at all. There is absolutely nothing we can do to control what it does, or even influence it in the slightest way.

What we CAN do is learn to control how we react to the market. This means that we have to first recognize our thoughts about the market and the feelings that motivate us to act. Anger, fear, greed, and even elation are a few of the basic emotions that often cause people to do things they regret. Complex emotions such as patience, caution, self respect, and relaxation usually result in better quality decisions.

Becoming too emotionally involved with the market can interfere with our ability to make rational decisions. These feelings usually are strongest at the precise moment we should be calm and clear headed. Emotion-management is a desirable and fortunately learnable skill. However, that doesn't meant we have to smother our feelings and become robot-like. It does mean we do have to examine and become aware of our own personal decision making process.

Self-examination allows us to understand how much of our judgment is based on emotional reactions, and how much rational thinking is involved. We have to first understand our personal traits before we can make improvements in our thinking process.

The key is balance. Being human, most of us allow way too much sentiment into the equation. While a strong passion for trading is certainly desirable, success in the stock market depends on our ability to blend our naturally reactive emotions with intentional reasoning.

And of course, spicing the recipe up with a dash of good luck and heaping cup of prayer always helps.

Trade well!

- Thomas Sutton, Editor

Quick List

    
Stock     03/24     03/24      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

MASS      20.17      0.40     20.46     18.72        1.74/0.87      2.58
LAND      35.98      0.68     36.51                  2.54/1.27      3.02
SANM      41.68      0.29     42.27                  2.51/1.26      2.24
FORG      20.75     -0.19      21.5     19.47        2.03/1.02      3.44

The "Quick List" provides a brief summary of each stock write-up and should be taken in the context of the related write-up presented in the "Stocks Covered in This Issue" section of this Report.

Be sure to read "How To Use The RightLine Quick List" and always use the RightLine Risk Control Calculator before entering any position.

For more on controlling risk go to the RightLine Risk Control System

For a glossary of terms unique to The RightLine Report go to: Glossary

Questions? Send us an email using our Contact Form.

Market Summary

The US stock market indices were higher again on Thursday, chalking up six Bullish sessions out of the last eight in the face of global uncertainty over the ongoing war in Ukraine. Traders sorted through several manufacturing and services sector reports headlined by surprise accelerations in US business activity. Additional economic news included unemployment claims moderating much more than expected and manufacturing growth in the Kansas City region surging higher, while durable goods orders weakened. Earnings news was flat, with both KB Home (KBH $34) and Darden Restaurants (DRI $132) quarterly numbers coming in short of expectations. Gold and the USD/dollar moved higher, oil prices gave back some of Wednesday's rally, and treasuries were mixed.

                        Mar 23, 2022           Mar 24, 2022   
                  --------------------   --------------------
Dow                 34,358.50  -448.96     34,707.94   349.44
Nasdaq              13,922.60  -186.21     14,191.84   269.23
S&P 500              4,456.24   -55.37      4,520.16    63.92

NYSE Volume                      4.55B                  4.14B
NYSE Advancers                   1,172                  2,184
NYSE Decliners                   2,138                  1,145

Nasdaq Volume                       5B                  5.03B
Nasdaq Advancers                 1,671                  3,136
Nasdaq Decliners                 3,033                  1,542

                                 New Highs/Lows

                   03/17  03/18  03/21  03/22  03/23  03/24
                 --------------------------------------------
NYSE New Highs        52     59    118     82     82     95
NYSE New Lows         67     57     61     74     80     98
Nasdaq New Highs      57     60     67     82     65     77
Nasdaq New Lows      114     78    126    130    114    103
   

TRADER'S TIP: "What If I Had A Crystal Ball?"

You don't need a crystal ball if you prepare for each trade with the "what if" approach. Always remember to ask these questions before entering any position - "What will I do if price moves in my favor?" And "What will I do if price moves against me?" Most traders and investors never consider these questions at all, so simply writing down specific answers will put you way ahead of the game.

The Technical Analyst

For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Improve Your Trading With Moving Averages".

S&P 500 - 4520.16 March 24, 2022

52-Week High: 4818.62
52-Week Low: 3853.50
Daily Trend: UP
Weekly trend: DOWN

NASDAQ Composite - 14191.84 March 24, 2022

52-Week High: 16212.23
52-Week Low: 12555.35
Daily Trend: UP
Weekly trend: DOWN
        
Dow Industrials - 34707.94 March 24, 2022

52-Week High: 36952.65
52-Week Low: 32071.41
Daily Trend: UP
Weekly trend: DOWN
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Monday, March 21, 2022:
21-Mar   8 am   Atlanta Fed President Raphael Bostic speaks
21-Mar  8:30 am   Chicago Fed national activity index
21-Mar  12 noon   Fed Chair Jerome Powell speaks at NABE conference

Tuesday, March 22, 2022:
22-Mar          None scheduled

Wednesday, March 23, 2022:
23-Mar  10 am   New home sales (SAAR)

Thursday, March 24, 2022:
24-Mar  8:30 am   Initial jobless claims
24-Mar  8:30 am   Continuing jobless claims
24-Mar  8:30 am   Durable goods orders
24-Mar  8:30 am   Core capital goods orders
24-Mar  8:30 am   Current account deficit
24-Mar  9:45 am   Markit manufacturing PMI (flash)
24-Mar  9:45 am   Markit services PMI (flash)

Friday, March 25, 2022:
25-Mar  10 am   UMich consumer sentiment index (final)
25-Mar  10 am   5-year inflation expectations (final)
25-Mar  10 am   Pending home sales index


For a chart of typical Up or Down market reactions to specific major US economic reports 
go to:  Economic Indicator Effects

TRADER'S TIP: "Earnings Conference Calls"

Since the SEC implemented the Fair Disclosure laws, most companies have begun allowing individual shareholders to listen in on earnings conference calls that were previously limited to analysts only. If you are tracking a stock as it approaches its scheduled earnings announcement, always look for the related conference call and mark it on your calendar. The behavior of the stock during the call can telegraph early reaction to management's explanation of earnings related events. If you can't find any mention of the call, give the firm's Investor Relations department a ring and ask when or if a call will be held.

Stocks Covered in This Issue

HEALTHCARE SECTOR

908 Devices Inc. (MASS: Healthcare/Medical Devices) - SQUEEZE PLAY. A look at MASS's daily chart shows what a price squeeze is all about. The constricted high-low daily trading range has produced a setup similar to a tightly coiled spring. Expect price to move sharply soon, with the direction yet to be determined. Let the upcoming market action resolve whether you will buy shares or sell short. To capture a move either way, place a BUY trigger at 20.46 and a SELL short trigger at 18.72. Once MASS shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.74 and tighten to 0.87 on a 2.58 gain. MASS closed Thursday at 20.17. Earnings Report Date: May 11, 2022. Beta: N/A. Market-Cap: 629.98M. Optionable.

REAL ESTATE SECTOR

Gladstone Land Corporation (LAND: Real Estate/REIT-Industrial) - NEW HIGH DIP. LAND's latest 52-week high and subsequent pullback has resulted in one of our favorite trade opportunities. An encounter with support on Thursday sets the stage for a low-risk entry. Now watch for LAND to move up to our BUY trigger at 36.51. Once triggered, place your market order. When the order is filled, follow with a trailing stop of 2.54. Tighten the stop to 1.27 when you have a 3.02-point gain. LAND last closed at 35.98. Earnings Report Date: May 10, 2022. Beta: 0.61. Market-Cap: 1.238B. Optionable.

TECHNOLOGY SECTOR

Sanmina Corporation (SANM: Technology/Electronic Components) - BULLISH BOUNCE. This trader-friendly setup turns repetitive stock behavior into real profits. Based on the tendency for up-trending stocks to drop briefly and then resume the up-trend, the Bullish Bounce places traders into excellent stocks when conditions are primed for more skyward movement. SANM's current price action near moving average support signals a potential BUY entry at 42.27, followed by a 2.51 trailing stop which can be tightened to 1.26 upon earning 2.24. SANM closed Thursday at 41.68. Earnings Report Date: May 02, 2022. Beta: 1.06. Market-Cap: 2.649B. Optionable.

ForgeRock, Inc. (FORG: Technology/Software-Infrastructure) - SQUEEZE PLAY. Thursday's trading action forced FORG's daily price range into an abnormally narrow state. This translates into opportunity; for the cyclical nature of price volatility is to shrink extensively, then swell rapidly as shares move in one direction or another. Instead of trying to predict the direction FORG will take when price volatility begins to increase, we'll set both a BUY (long) and a SELL (short) trigger to get us into the right trade. Be ready to BUY shares at 21.5 if FORG moves higher, and place your order to SELL short at 19.47 if price declines to that level. As usual follow your entry with a trailing stop, 2.03 should be sufficient. Reduce your stop to 1.02 on a 3.44 gain. FORG closed Thursday at 20.75. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.738B. Optionable.

IMPORTANT: Before entering any positions, always use the Risk Control System to determine the level of acceptable risk and the maximum number of shares to buy. Use Gap Adjusted Entries to reset the Entry Price for stocks that gap beyond recommended entry levels.

Stock Splits

Below are the stocks that have announced splits and have recently executed or will execute soon. There is generally a return to normal price behavior in the weeks following a split announcement in what we call a "Dormancy Phase." As the stock nears its split execution date (Effective Date) it often moves into the "Pre-Split Run" stage where quick and sometimes dramatic gains can occur.

                             Announce     Eff.       Split
Company Name     (Symbol)      Date       Date       Ratio   Options  
---------------- -------     --------    -------     ------  -------   
ACM Research      ACMR       3/4/2022   3/24/2022   3-for-1   Yes
PAM Transport     PTSI       3/9/2022   3/30/2022   2-for-1   Yes
Amazon            AMZN       3/9/2022   6/6/2022   20-for-1   Yes    

Split details are also available online at the RightLine Online Stock Split Calendar. For a detailed look at the different stages of a Stock Split, Click Here.

A simple yet powerful tool, the Risk Control Calculator helps you manage risk by recommending a maximum number of shares to purchase. Available in the RightLine Member's Area.

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