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Today's Trackdown: Friday - Jan. 17, 2020

  • Brief Recap and Updates on the Markets
  • SPY Charts and some Technical Analysis

In Thursday's action:    Jan. 16, 2020

Dow 29297.55 +267.42 (0.92%)
Nasdaq 9357.16 +98.44 (1.06%)
SP 500 3316.81 +27.52 (0.84%)

The stock market was higher on Thursday as the major market averages closed at new record highs yet again. The S&P 500 rallied over 3300 in risk-on session led by the technology stocks. Morgan Stanley ($MS 56.44, +3.50, +6.6%) provided strong earnings results which helped lift stocks.


News to keep in mind Friday morning:

  • Futures trade vs fair value were trading slightly higher late last night.
  • Dow +33, S&P +2, Nasdaq +4, Russell +2.
  • The biggest factors in the market right now are; the Fed, the Global Economy and Global Geopolitical conflicts/Iran.
  • Keeping an eye on the VIX - The CBOE Volatility Index is back under 13, this is a risk on level. But may spike on any war news/headlines obviously.
  • CHINA TRADE news is still something to be aware of and can create instant volatility.
  • Middle East tensions could pop up in the headlines.

Today's Economic Calendar:

8:30 AM ET, Housing Starts for December. The consensus is for 1.378 million SAAR, up from 1.365 million SAAR.

9:15 AM, The Fed will release Industrial Production and Capacity Utilization for December. The consensus is for a 0.1% decrease in Industrial Production, and for Capacity Utilization to be decrease to 77.1%.

10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for January). The consensus is for a reading of 99.3.

10:00 AM, Job Openings and Labor Turnover Survey for November from the BLS.


THE CHARTS:

(NOTE: Charts are a good guide but when a tweet or news item can jerk the markets around, they mean a bit less.)

The markets ended higher again on Thursday powering the market to new all-time highs AGAIN.  We still have the Stochastics at overbought and we are still a bit concerned with the 9-month chart. On that chart we are well over the uptrend line. So we still will stay a bit cautious. We now draw a tight stop/support line at 325 for those who like those things. Momentum is still for continued upside, however.

Keep in mind we have come up a long way and a pause (sideways) or a pullback could happen at anytime. Our support levels remain the same, with the first support level being marked at 320. This level could also be used as a 'stop' for some positions if you have a low risk tolerance. Much stronger support is at 310.

 [Again] We still view the current set-up under 'normal conditions' is still telling us we should continue to move sideways or up. We notice the 20, 50, and 200 day moving averages are all in alignment and are all moving higher. The current price is also above the 20, 50, 200 MAs, which is good.

BUT - Keep in mind and how far we have risen and how fast we have gotten this high, a bit of caution is needed.  Although at the same time, there is nothing saying we won't just keep drifting to new highs for the rest of the year and start of the next. As we previously written, you can let winners run, but we would not use excessive margin or open any new large positions.  [/Again]

The Vix is back top really low numbers in the 12s, normally a full 'risk-on' area.

The MACD is positive. The Stochastics are overbought. The Money Flow is positive. We are above the 50-day MA. The 20,50,200 day moving averages are in a positive alignment and heading higher.

The 50-day MA (315.91)(+0.50) and the 200-day MA (296.37)(+0.24)

On the 9-month chart below, we remain in an uptrend channel that has lasted now for 7-8 months! Caution though as we are currently above the upper trend line, which is an overbought look. In many cases we drop back down into the channel either by a pullback or by going sideways until under the upper trend line catches up. * For those who like to use stops or lock in profits, we would use the upper trend line as the place to do that, currently just above 320. *

  • Nasdaq Composite +4.3% YTD
  • S&P 500 +2.7% YTD
  • Dow Jones Industrial Average +2.7% YTD
  • Russell 2000 +2.2% YTD

$DIA $SPY $QQQ $IWM

Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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