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Today's Trackdown: Wednesday - April 29, 2020

SPY Charts and some Technical Analysis

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

Previous market day....End of Day Brief....(click here)...   Dow -32.23 at 24101.55, Nasdaq -122.43 at 8607.74, S&P -15.09 at 2863.39


News to keep in mind Wednesday morning:

  • Big tech company Google ($GOOG) reported good earnings results last night lifting the futures after hours.
  • Futures trade vs fair value were trading a bit higher late last night.
  • Dow -105, S&P -13, Nasdaq -32, Russell -5.
  • Still unpredictable! But we have successfully held above the SPY 270 support level and even above 280 now.
  • The biggest factors in the market right now are; Coronavirus headlines, when the economy will re-open, the Fed, the Global Economy and Global Geopolitical conflicts.
  • Keeping an eye on the VIX - the CBOE Volatility Index had spiked due to virus fears, but has been slowly coming back down.

Today's Economic Calendar:

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

8:30 AM, Gross Domestic Product, 1st quarter 2020 (Advance estimate). The consensus is that real GDP decreased 4.0% annualized in Q1, down from 2.1% in Q4.

10:00 AM, Pending Home Sales Index for March. The consensus is for a 10.0% decrease in the index.

2:00 PM, FOMC Meeting Announcement. No change to policy is expected at this meeting.

2:30 PM, Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.


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 had a down day after a good start on re-opening news for many states. We continue to stay over BOTH the 50-day moving average and the SPY 280 levels. It appears we will continue drifting higher from here. Besides getting a bit higher on the Stochastics, this market is currently technically in decent shape.

Under normal circumstances we would point out the 'Bull Flag' formation. Of course seeing how far we have rebounded and the continued market uncertainty it is hard to have conviction in this possibility. But it is there! We shall see.

* Don't risk to much, there is still a lack of CERTAINTY in the markets. For the moment, the market may be like a casino. Some trading is fairly close to outright gambling. Don't hold your breath waiting for normal market action to return, but be ready to make some trades when it does.

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

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

CHANGES:

  • We stayed above the 50-day moving average.
  • We stayed above the resistance at SPY 280.

POSITIVES:

  • We are over the 20-day moving average.
  • We are over the 50-day moving average.
  • We have held support (270).
  • The Vix continues to slide lower.

NEGATIVES:

  • The 50-day moving average is declining.
  • We are under the 200-day moving average
  • The Money Flow is slightly negative.
  • The Vix is still high / above 20.


OPINION:

  • Currently we are above the 50-day MA and SPY 280. Very good.
  • If we stay above these levels for a while, they may become support. Bullish.
  • We marked a line at 287, could be resistance.
  • Overall, on a technical basis we are in decent shape. But as there is so many unknowns it is wise to use caution.

  • Be aware that we are susceptible to large drops or dips with the current level of uncertainty.
  • Look for trading opportunities that could result due to higher volatility!
  • After any big sell-offs or dips - look for names that are oversold to buy. Have your trading lists ready.


* Using caution = Do not use MARGIN at this time unless absolutely certain of your trade! *

INDICATORS:

The MACD is positive. The Stochastics are neutral. The Money Flow is slightly negative.

MA +/-: The 50-day MA (277.44)(-0.99) and the 200-day MA (297.55)(-0.05)

On the 9-month chart below, we are looking at a severe and quick drop of the market and then a rebound.

The 270 support line is now considered as 'confirmed' support. It is a good technical sign for the markets that we have stayed above 270.

SPY 280 and the 50-day moving average (277.44) were the next obvious spots for resistance, but we have broken above them.

* Continue to use caution - Still many unknowns. *


STOCKS: (Our most recent FULL Trading List is posted here). We will be updating this later this week.

  • Current favorites: $AMRN - Amarin, $AUPH - Aurinia Pharma, $COLL - Collegium, $EPZM - Epizyme, $EXEL - Exelixis, $HZNP - Horizon Pharma (if under 34), $IOVA - Iovance (constant buyout rumors), $IMMU - Immunomedics (FDA approval last week!), $KPTI - Karyopharm, $TGTX - TG Therapeutics.
  • If your thinking longer-term/income: $T - AT&T is worth a look - high dividend yield.
  • New ideas: $BFYT - Benefytt Tech, $CRWD - CrowdStrike.

* 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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