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Today's Trackdown: Tuesday - April 28, 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 +358.51 at 24133.78, Nasdaq +95.64 at 8730.17, S&P +41.74 at 2878.48


News to keep in mind Tuesday 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 -105, S&P -13, Nasdaq -32, Russell -5.
  • 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, but has been slowly coming back down.

Today's Economic Calendar:

9:00 AM, S&P/Case-Shiller House Price Index for February. The consensus is for a 3.1% year-over-year increase in the Comp 20 index for February.

10:00 AM, Richmond Fed Survey of Manufacturing Activity for April. This is the last of regional manufacturing surveys for April.

10:00 AM, the Q1 2020 Housing Vacancies and Homeownership from the Census Bureau.


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 nice up day again on Monday. We are well over BOTH the 50-day moving average and the SPY 280 levels. They were marked as resistance points and obvious spots for the market rally to stall out or turnaround. But we managed to get over and so far stay over these levels.

Under normal circumstances we would point out a 'Bull Flag' formation. Of course seeing how far we have rebounded and the continued market uncertainty it is hard to have conviction in this possibility. But it is there! We shall see.

* Don't risk to much, there is still a lack of CERTAINTY in the markets. For the moment, the market may 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:

  • We stayed above the 50-day moving average.
  • We stayed above the resistance at SPY 280.
  • We broke above a 'Bull Flag' formation.

POSITIVES:

  • We are over the 20-day moving average.
  • We are over the 50-day moving average.
  • We have held support (270).

NEGATIVES:

  • The last two days of advance were with low volume.
  • 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 / above 20.


OPINION:

  • Currently we are above the 50-day MA and SPY 280. Very good.
  • Now if we stay above these levels for a while, they may become support. Bullish.
  • We marked a line at 287, could be resistance.

  • Keep using caution, as we still have a bunch of uncertainties.
  • Look for trading opportunities with the higher volatility!
  • Be aware that we are susceptible to large drops or dips with the current 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.


* 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 (278.43)(-0.96) and the 200-day MA (297.60)(-0.04)

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 is a good technical sign for the markets that  we have stayed above 270.

SPY 280 and the 50-day moving average (278.43) were the next obvious spots for resistance, but we have broken above them (287). Although on low volume, so keep an eye on those levels.

* Continue to use caution - Still many unknowns. *

STOCKS: (Our most recent FULL Trading List is posted here). We will be updating this later this week.

  • Current favorites: $AMRN - Amarin, $AUPH - Aurinia Pharma, $COLL - Collegium, $EPZM - Epizyme, $EXEL - Exelixis, $HZNP - Horizon Pharma (if under 34), $IOVA - Iovance (constant buyout rumors), $IMMU - Immunomedics (FDA approval last week!), $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.


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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