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Today's Trackdown: Friday - Jan. 29, 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 Friday morning:

  • Futures trade vs fair value were trading lower late last night. -- Trading is a bit irrational and wacky, use caution! --
    • Dow -260, S&P -44, Nasdaq -189, Russell -17. (12:05 am 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) - Sudden huge spike! If this stays high the markets will be a bit rocky. It would be expected that the market recovers eventually and quiets down some then the Vix will drift back down.

Today's Economic Calendar:

8:30 AM ET, Personal Income and Outlays for December. The consensus is for a 0.1% increase in personal income, and for a 0.4% decrease in personal spending. And for the Core PCE price index to increase 0.1%.

9:45 AM, Chicago Purchasing Managers Index for January. The consensus is for a reading of 48.5, up from 48.2 in December.

10:00 AM, Pending Home Sales Index for December. The consensus is for a 0.6% decrease in the index.

10:00 AM, University of Michigan's Consumer sentiment index (Final for January). The consensus is for a reading of 79.2.

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:

We had a little rebound in the markets Thursday, but did have some negative changes to our indicators. We also notice most of the gains are being lost after hours & pre-market trading. Use caution right now and keep a level head. On our indicators, the MACD and the Money Flow are both currently declining. The Money Flow is down to neutral and may go negative. Let's now watch our SPY strong support at 365. We need this line to hold or the uptrend maybe broken. Is this going to be a correction or just another dip to buy? It is to early to tell.

On the longer term 8-month chart, we remain inside the dominant longer term uptrend.

** - Repeating - Everything looks good, but we do keep asking - are we going to be near a top or up against resistance someday? How long can this continue?

Note: The Russell 2000 (small caps) are definitely leading the markets so far this year. Their positive uptrend is still intact.


"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.

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 Money Flow is down to neutral and may go negative.

POSITIVES:

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

NEGATIVES:

  • We are under the 20-day moving average.
  • The MACD and the Money Flow are declining.
  • Stochastics are high.
  • Possible market top? Getting overbought or to high to fast?
  • * Note: The 50-day moving average has gotten way ahead of the 200-day. This can be an overbought issue.
  • 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 50-day and 200-day MAs. (Bullish).
  • But.. below the shorter term 20-day MA. (Short-term Bearish).

  • The possibility of settling into a trading range for a while is a good possibility.
  • The bottom line being the SPY 365 is strong support and the top maybe 380ish.

  • Charts alone without thinking about the Fed, politics, vaccine, virus, etc looks good.
  • But those risks should be kept in mind.

  • 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.
  • 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 neutral/declining.

MA +/- (slope): The 50-day MA (369.94)(+0.42) and the 200-day MA (331.74)(+0.49)

The 8-month chart (below).

We are above the SPY 365 support level.

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


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

  • Current trading favorites: AUPH - Aurinia Pharma (Their 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: DT, 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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