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Today's Trackdown: Monday - April 20, 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 +704.81 at 24242.49, Nasdaq +117.78 at 8650.15, S&P +75.01 at 2874.56


News to keep in mind Monday morning:

  • Virus headlines and the reaction to them will continue to run the markets.
  • Futures trade vs fair value were trading a bit lower Sunday night.
  • Still unpredictable! But we have successfully held above the SPY 270 support and broken over the resistance at 280. (Wow).
  • Dow -165, S&P -16, Nasdaq -69, Russell -9.
  • 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. (Looks like this has already happened).

Today's Economic Calendar:

8:30 AM ET: Chicago Fed National Activity Index for March. This is a composite index of other data.

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 up much higher on Friday led by the Dow and the small caps. We have some positive changes to our charts. We have crossed over the 50-day moving average and our support level has been raised up to 270. Although we will continue to mark 280 as 'wow' and will wait and see what happens next there. We may have gotten to extended to the upside to quickly and choose to be a bit more cautious with what might happen with the 280 level. Also be aware the Stochastics are high/overbought.

Watch the 50-day moving average. The 50-day MA is just below us now after we jumped OVER it Friday! This MA is also still declining so be aware we could stay above it based on that alone for a while. 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 as well as 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:

  • We jumped above the 5-day moving average.
  • We raised our support level up to 270.
  • The Money Flow has gone to very positive.

POSITIVES:

  • We are still way under the old highs.
  • The MACD is rising.
  • We are over the 20-day moving average.
  • We are over the 50-day moving average.
  • We have held support (270) and broken over resistance (280).
  • The Money Flow is currently positive.

NEGATIVES:

  • The 50-day moving average is declining.
  • We are under the 200-day moving average
  • The Stochastics are high/overbought.
  • The Vix still is high, even though it has come down some.

OPINION:

  • Beware we are short-term overbought according to the Stochastics. But, the MACD is currently strong and the Money Flow has gone very positive due to recent rallies.
  • 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).
  • 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 like: $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 date coming soon), $KPTI - Karyopharm, $TGTX - TG Therapeutics.
  • If your thinking longer-term/income: $T - AT&T is worth a look - high dividend yield.
  • New ideas: $CVS, $BFYT - Benefytt Tech, $CRWD - CrowdStrike.

* Feel free to share your list/picks in the comments below.

* Using some caution: Meaning - Do not use MARGIN at this time unless absolutely certain of your trade!. *

INDICATORS:

The MACD is rising. The Stochastics are high/overbought. The Money Flow is very positive.

MA +/-: The 50-day MA (284.75)(-0.89) and the 200-day MA (298.00)(-0.02)

On the 9-month chart below, we are looking at a severe and quick drop of the market and the rebound. All previous patterns were broken and voided.

The 270 support line is now considered 'confirmed' as 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 (284.75). But the market bolted higher on Friday and is now over those resistance lines.

* 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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