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Today's Trackdown: Friday - April 24, 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 +39.44 at 23515.26, Nasdaq -0.63 at 8494.76, S&P -1.51 at 2797.80


News to keep in mind Friday morning:

  • Virus headlines and the reaction to them will continue to run the markets.
  • Futures trade vs fair value were trading a bit lower late last night.
  • Still unpredictable! But we have successfully held above the SPY 270 support level.
  • Dow -170, S&P -25, Nasdaq -95, Russell -12.
  • 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. When the Vix peaks, the market bottoms.

Today's Economic Calendar:

8:30 AM ET, Durable Goods Orders for March from the Census Bureau. The consensus is for a 6.0% decrease in durable goods orders.

10:00 AM, University of Michigan's Consumer sentiment index (Final for April). The consensus is for a reading of 70.0.


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 mixed day on Thursday. We had only one significant change to our charts. The Money Flow dropped a bit to slightly negative. The good news is our support level at 270 is still strong and we think it will be holding up. As we have mentioned before, the market may have trouble with the 280 level and the 50-day moving average. For the last few trading session these two levels have been a place of resistance.

Keep watching the 50-day moving average. The 50-day MA is still just above us, but it is moving in a downward direction. So if we just go sideways we would get back above it. You can find the daily change of the 50-day MA just above our chart. Why is the 50-day MA so important? Keeping an eye on the 50-day MA is important as many market technicians use this as their main go to benchmark. It ism also well used by computer trading algorithms.

* We may stay under the control of virus headlines, so keep an eye on them.
* Much will depend on how soon the economy is opened back up and how much damage was caused by the shutdowns.

* Don't risk to much for awhile, there is still a lack of SANITY in the markets. For the moment, the market will still 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:

  • The Money Flow dipped to slightly negative.
  • 270 support still looking good.

POSITIVES:

  • We are still way under the old highs.
  • We are over the 20-day moving average.
  • We have held support (270).

NEGATIVES:

  • We are under the 50-day moving average
  • 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.

OPINION:

  • Currently we are just under resistance points of the 50-day MA and SPY 280. We are also above decent support at SPY 270. So at the moment we appear to be in a trading range until we break out of it.

  • Keep using caution, maybe defensive. We still have a bunch of uncertainties.
  • Look for trading opportunities with this high volatility!
  • Be aware that we are susceptible to large pullbacks or dips with the current high level of volatility.
  • The U.S. economy is uncertain. We must keep an eye on how much the virus slows it down and for how long. (Currently an unknown). Some states are starting to open things back up, keep an eye on how this goes.
  • After any big sell-offs or dips - look for names that are oversold to buy. Have your trading lists ready.


STOCKS: (Our most recent FULL Trading List was posted here). We will try to update this soon.

  • Current favorites: $AMRN - Amarin, $AUPH - Aurinia Pharma, $COLL - Collegium, $EPZM - Epizyme, $EXEL - Exelixis, $HZNP - Horizon Pharma (if under 32), $IOVA - Iovance (constant buyout rumors), $IMMU - Immunomedics (FDA approval Wednesday!), $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.

* 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 (280.44)(-1.09) and the 200-day MA (297.70)(-0.06)

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 would be a good technical sign for the markets if we stay above 270.

280 - Was the next obvious spot for resistance as well as the 50-day moving average (280.44). These are the two levels to either break back above or get turned back down by.

* Continue to use caution - Still many unknowns. *

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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