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Today's Trackdown: Tuesday - Feb. 18, 2020

  • SPY Charts and some Technical Analysis

Previous market day.... Dow -25.23 at 29397.99, Nasdaq +19.21 at 9731.20, S&P +6.22 at 3380.16


News to keep in mind Tuesday morning:

  • Futures trade vs fair value were trading a bit lower late last night. Apple $AAPL gave a coronavirus related negative revenue guidance.
  • Dow -64, S&P -7, Nasdaq -42, Russell -6.
  • The biggest factors in the market right now are; Coronavirus headlines, the Fed, the Global Economy and Global Geopolitical conflicts.
  • Keeping an eye on the VIX - the CBOE Volatility Index is in the mid-teens, returning to levels before the coronavirus started to hit stocks last month. According to the Vix we are back to 'Risk-On'.

Today's Economic Calendar:

8:30 AM ET, The New York Fed Empire State manufacturing survey for February. The consensus is for a reading of 5.0, up from 4.8.

10:00 AM, The February NAHB homebuilder survey. The consensus is for a reading of 75, unchanged from 75. Any number above 50 indicates that more builders view sales conditions as good than poor.


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 charts mean a bit less currently as the coronavirus news is in the headlines and can spark fears. *

The markets were mixed on Friday, with no conviction for some traders to hold stocks over a long 3 day weekend. We are still dealing with Coronavirus fears and a short-term overbought condition with the Stochastics.

CHANGES:

  • The Money Flow went from slightly positive to positive. (Improved).

POSITIVES:

  • We are above the 20-day, 50-day, and 200-day moving averages.
  • All 3 MAs are also in the proper alignment and headed in an upward direction. This is bullish.
  • The MACD is positive.
  • The Money Flow is positive.

NEGATIVES:

  • The Stochastics are overbought.
  • We may have risen to far/to quickly.
  • Not a technical indicator - Coronavirus fears and uncertainty.

OPINION:

  • Longer-term bullish. Shorter-term medium and using some caution. We are susceptible to some pullbacks or dips. 
  • We will keep using some caution as the coronavirus is not cured and we may have risen to new highs to fast. We would still buy the dips if any occur.
  • The  U.S. economy is still doing well.

Using some caution:  * Meaning - we would not use excessive margin at this time. *

VIX:   Spiked a bit on virus fears initially, but is back down into the mid-teens. This is a 'Risk-On' level.

INDICATORS:   The MACD is positive. The Stochastics are overbought. The Money Flow is positive.

MA +/-:   The 50-day MA (324.57)(+0.60) and the 200-day MA (300.84)(+0.25)

On the 9-month chart below, we are in a megaphone like uptrend channel. Caution though as we are currently just above upper trend line, which is a high or overbought look. In many cases we stay in the channel either by pullbacks or by going sideways until the upper trend line catches up or a new pattern emerges. 320 is marked as a support level.

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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