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Today's Trackdown: Thursday - Feb. 6, 2020

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

In Wednesday's action:    Feb. 5, 2020

Dow 29290.76 +483.22 (1.68%)
Nasdaq 9508.70 +40.71 (0.43%)
SP 500 3334.69 +37.10 (1.13%)

The S&P 500 climbed 37 points on Wednesday to recover all losses related to the coronavirus and closed at a new record high. Economic news for the day was positive with the ISM Non-Manufacturing Index for January increasing to 55.5% from 54.9% in December, and the ADP Employment Change report showed an estimated 291,000 jobs were added to private-sector payrolls in January.

News to keep in mind Thursday morning:

  • Futures trade vs fair value were trading higher late last night as Asian stocks continued to rebound and China cuts some tariffs on U.S. goods.
  • Dow +172, S&P +16, Nasdaq +61, Russell +10.
  • 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 has returned to normal levels. In the 15s, which is 'Risk-On'.
  • CHINA TRADE news is still something to be aware of and can create instant volatility.

Today's Economic Calendar:

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 215,000 initial claims, down from 216,000 last week.


(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 much higher again on Wednesday as dip buying ruled the day once again and we received good economic numbers. We will keep using some caution as the coronavirus is not cured and we may have risen to new highs to fast again. We would still buy the dips if any should should show themselves again. The economy appears to be picking up steam and overnight China cut tariffs on some U.S. goods.

* The charts mean a bit less currently as the coronairus news in the headlines can spark fears and selling. *

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

We are above the 20-day, 50-day, and 200-day moving averages. These 3 MAs are also in the proper alignment and headed in an upward direction. This is bullish.

The Vix did spike a bit on virus fears initially, but is back down in the mid-teens. This is a 'Risk-On' level.

The MACD is positive. The Stochastics are neutral. The Money Flow is a slight negative now. We are above the 50-day MA.

The 50-day MA (321.17)(+0.48) and the 200-day MA (299.20)(+0.23)

On the 9-month chart below, we remain in an uptrend channel that has lasted now for about 8 months! Caution though as we are currently above the upper trend line, which is an overbought look. In many cases we drop back into the channel either by a pullback or by going sideways until the upper trend line catches up.

* We may discontinue this channel soon and use the rising wedge pattern that is also showing in the background. *

  • Nasdaq Composite +6.0% YTD
  • S&P 500 +3.2% YTD
  • Dow Jones Industrial Average +2.6% YTD
  • Russell 2000 +0.8% YTD


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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