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Today's Trackdown: Wednesday - Feb. 24, 2021

SPY Charts and some Technical Analysis

News to keep in mind Today - Today's Economic Calendar - The Charts - Opinion - Stock Picks.


News to keep in mind Wednesday morning

  • Futures trade vs fair value were trading a bit lower late last night.  --  Powell speaks again today. --
    • Dow -41, S&P -6, Nasdaq -39, Russell +4. (11:00 pm ET).
  • We look good technically - But use "Caution" message has been on here for a while for a reason. (Quick sell-offs and/or getting overbought are a possibility at anytime - so we continue to leave this note).
  • The biggest factors in the market right now are; Coronavirus headlines, the US economy, the Global Economy, any political drama.
  • Watch the VIX - (CBOE Volatility Index) - We noticed that during the recent selling/pullback so far this has not risen very much. Bulls are not scared and remain in control.

Today's Economic Calendar:

7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM, New Home Sales for January from the Census Bureau. The consensus is for 855 thousand SAAR, up from 842 thousand in December.

10:00 AM, Testimony, Fed Chair Jerome Powell, Semiannual Monetary Policy Report to the Congress, Before the Committee on Financial Services, U.S. House of Representatives

During the day, The AIA's Architecture Billings Index for January (a leading indicator for commercial real estate).


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.)

BRIEFING:

So we had another mixed day on Tuesday, with continued weakness in the tech names and the Nasdaq. On our charts, we did not change much with the exception of the Money Flow which stopped declining today. With today's dip being bought the Money Flow actually had a positive day. We also notice the Stochastics have bottomed out. In theory this tells us the pullback/dip should be over soon.

We are still inside of the uptrend channel and above the SPY 375 stop/support line.


** - Repeating - But, how long can this uptrend continue? The possibility of a consolidation, sideways market, or pullback of some kind may happen at some point. But not necessarily. Positive momentum and easy money can keep driving us to new highs.


Note: The Russell 2000 (small caps) are definitely leading the markets so far this year.

IF wanting to gamble: Options trades on these ETFs will give you a way to place your bets. $TQQQ - $SQQQ - $SPXL - $SPXS.

* Beware - levered ETFs are subject to decay and are not for long-term holding. *


CHANGES:

  • The Stochastics have bottomed.
  • The Money Flow stopped its recent decline.

POSITIVES:

  • The MACD is positive.
  • The Money Flow is positive.
  • We are over the 20-day moving average, which is rising.
  • We are over the 50-day moving average, which is rising.
  • We are over the 200-day moving average, which is rising.

NEGATIVES:

  • The declining MACD and Money Flow show the recent dip/pullback.
  • Possible market top someday?
  • What about the Fundamentals, Valuations, Virus news, the Economy, Jobs, Election issues, Politics, The FED, etc.?
  • Some things out there to worry about still! Or a wall of worry to climb as the saying goes.


OPINION:

  • Currently we are above the 20-day, 50-day and 200-day MAs. (Bullish).
  • The MACD and the Money are positive.
  • On the 4-month chart it appears we are still 'buying the dips'.
  • O the 8-month chart we are in a strong uptrend channel.

  • The possibility of settling into a trading range 'someday' is a possibility.
  • At the moment, bulls are in control with easy Fed money and more stimulus.
  • Momentum continues to the upside.

  • But, we still say "Use Caution" for a reason. Do not over risk yourself or over leverage yourself.
  • We are still susceptible to large drops or dips.
  • A bit concerned about the recent Nasdaq/tech pullback.
  • Look for trading opportunities that could result and have your trading lists ready.

* Be careful if using MARGIN at this time, be certain of your trade! *

INDICATORS:

The MACD is positive/declining. The Stochastics are neutral. The Money Flow is positive.

MA +/- (slope): The 50-day MA (378.47)(+0.44) and the 200-day MA (340.83)(+0.52)

The 8-month chart (below).

We are above the SPY 375 support level.

The market has been in an impressive up-channel since June. Technically still looking well.


STOCKS: < Favorites & Trade Ideas > <-- Click here for the quotes, details, news and previous opinions on our Favorites and Trade Ideas lists!

  • Current trading favorites: AUPH - Aurinia Pharma (Lupus drug has been FDA approved!), EPZM - Epizyme, EXEL - Exelixis, HZNP - Horizon Therapeutics (A big winner for us last year), IOVA - Iovance, KPTI - Karyopharm, SGMO - Sangamo, TGTX - TG Therapeutics (Our Top Pick!).
  • Tech Picks: CRWD - CrowdStrike (Although be aware it has a high valuation now).
  • Also watching: IMGN, OMER, SRNE, TRIL, VKTX.

* Feel free to share your list/picks in the comments below.


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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