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Today's Trackdown: Tuesday - Jan. 14, 2020

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

In Monday's action:    Jan. 13, 2020

Dow 28906.96 +83.28 (0.29%)
Nasdaq 9273.95 +95.07 (1.04%)
SP 500 3288.13 +22.78 (0.70%)

The S&P 500 and Nasdaq close at record highs as the bullish momentum continues  with high expectations for earnings season and little in the way of negative news. Also helping, the U.S. will remove China from its currency manipulator list.


News to keep in mind Tuesday morning:

  • Futures trade vs fair value were trading a bit higher late last night.
  • Dow +44, S&P +5, Nasdaq +19, Russell +2.
  • The biggest factors in the market right now are; the Fed, the Global Economy and Global Geopolitical conflicts/Iran.
  • Keeping an eye on the VIX - The CBOE Volatility Index is back under 13, this is a risk on level. But may spike on any war news/headlines obviously.
  • CHINA TRADE news is still something to be aware of and can create instant volatility.
  • Middle East tensions are going to be a bit higher and in the headlines.

Today's Economic Calendar:

6:00 AM, NFIB Small Business Optimism Index for December.

8:30 AM, The Consumer Price Index for December from the BLS. The consensus is for 0.2% increase in CPI, and a 0.2% increase in core CPI.


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 ended higher on Monday with the S&P 500 and Nasdaq making new all-time highs. Yesterdays 'Bearish Engulfing' candle was completely voided. Besides that not much change, if any in the charts. We are still dealing with our biggest concern. Which is seen on the 9-month chart, where we are well over the uptrend line. So we still will stay a bit cautious.

Keep in mind we have come up a long way and a pause (sideways) or a pullback could happen at anytime. Our support levels remain the same, with the first support level being marked at 320. This level could be used as a 'stop' for some positions if you have a low risk tolerance. Much stronger support is at 310.

 [Again] We still view the current set-up under 'normal conditions' is still telling us we should continue to move sideways or up. We notice the 20, 50, and 200 day moving averages are all in alignment and are all moving higher. The current price is also above the 20, 50, 200 MAs, which is good.

BUT - Keep in mind and how far we have risen and how fast we have gotten this high, a bit of caution is needed.  Although at the same time, there is nothing saying we won't just keep drifting to new highs for the rest of the year and start of the next. As we previously written, you can let winners run, but we would not use excessive margin or open any new large positions.  [/Again]

The Vix is back top really low numbers in the 12s, normally a full 'risk-on' area.

The MACD is positive. The Stochastics are neutral/high. The Money Flow is positive. We are above the 50-day MA. The 20,50,200 day moving averages are in a positive alignment and heading higher.

The 50-day MA (314.43)(+0.51) and the 200-day MA (295.65)(+0.26)

On the 9-month chart below, we remain in an uptrend channel that has lasted now for 7-8 months! Caution though as we are currently above the upper trend line, which is an overbought look. In many cases we drop back down into the channel either by a pullback or by going sideways until under the upper trend line catches up.

  • Nasdaq Composite +3.4% YTD
  • S&P 500 +1.8% YTD
  • Dow Jones Industrial Average +1.3% YTD
  • Russell 2000 +0.1% YTD

$DIA $SPY $QQQ $IWM

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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