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Today's Trackdown: Thursday - Oct. 29, 2020

SPY Charts and some Technical Analysis

News to keep in mind Today - Today's Economic Calendar - The Charts - Opinion - Stock Picks.


News to keep in mind Thursday morning:

  • Futures trade vs fair value were trading higher late last night. Note:  Wednesday was an example of why we have the "Use Caution" message on this site for a long while now.
    • Dow +275, S&P +35, Nasdaq +118, Russell +17. (1:20 am ET).
  • We look ok technically - But use "Caution" message has been on here for a while for a reason. (Quick sell-offs are a possibility at anytime - so we continue to leave this note).
  • The biggest factors in the market right now are; Coronavirus headlines, the economy, the Global Economy, China, and upcoming elections.
  • Watch the VIX - (CBOE Volatility Index) - spiked on the sell-off to around the 40 mark. We would think it will come back down from here.

Today's Economic Calendar:

8:30 AM ET, Gross Domestic Product, 3rd quarter 2020 (advance estimate). The consensus is that real GDP increased 31.9% annualized in Q3, up from negative 31.4% in Q2.

8:30 AM, The initial weekly unemployment claims report will be released. The consensus is initial claims increased to 800 thousand from 787 thousand last week.

10:00 AM, Pending Home Sales Index for September. The consensus is 4.5% increase in the index.


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.)

BRIEFING:

Brutal sell-off on Wednesday as the markets sold off on virus fears and the possibility that the increase in cases will slow the economy. The technicals look a bit weaker as the 50-day moving average is now declining. We have now marked our chart as being back in the previous SPY 320 to SPY 340 trading range. We maybe stuck in this range until more certainty about the elections, virus, etc.

Note: the political spat over a stimulus deal and the upcoming elections has added some uncertainty to the markets. With the election getting close we appear to be in an undecided place. Until the election is over and we get a bit of certainty we would expect a sideways/flat - wait and see kind of market. Some spikes in volatility are possible and could create trading opportunities for those willing to take some risk.

* Repeating.... "Our problems with the market now are the uncertainty about the upcoming elections and stimulus legislation, in addition to the valuations seeming a bit high."


* Don't risk to much, there is still a lack of CERTAINTY in the markets. *

IF wanting to gamble: Options trades on these ETFs will give you a way to place your bets. $TQQQ - $SQQQ - $SPXL - $SPXS.

* Beware - levered ETFs are subject to decay and are not for long-term holding. *


CHANGES:

  • The 50-day moving average is declining.

POSITIVES:

  • We are over the 200-day moving average, which is rising.

NEGATIVES:

  • We are under the 50-day moving average. (Bearish).
  • The MACD is declining.
  • The Money Flow is currently negative after selling pressure.
  • What about the Fundamentals, Valuations? Virus, Economy & Jobs, Elections, Politics, The FED, and China troubles?
  • A lot to think and worry about!
  • The Vix is still a bit high and may remain high for the foreseeable future.


OPINION:

  • Currently we are above the 200-day MA. (Bullish).
  • But below the 50-day MA. (Bearish).

  • We see a sideways - range bound type of market for the moment.

  • We still say "Use Caution" for a reason. Do not over risk yourself or over leverage yourself.
  • We are still susceptible to large drops or dips.
  • Look for trading opportunities that could result and have your trading lists ready.

* Do not use MARGIN at this time unless absolutely certain of your trade! *

INDICATORS:

The MACD is neutral/declining. The Stochastics are neutral. The Money Flow is negative.

MA +/- (slope): The 50-day MA (339.42)(-0.21) and the 200-day MA (310.25)(+0.02)

The 9-month chart (below).

We are well above the SPY 320 line, which is strong support. (Bullish).

We are below the SPY 340 resistance level. (Bearish).


STOCKS: (Our most recent FULL TRADING LIST is posted here).

< Favorites & Trade Ideas > <-- Click here for the quotes, details, news and opinions on our current Favorites and Trade Ideas!

  • Current trading favorites: AUPH - Aurinia Pharma (Their Lupus drug is on a path to approval), EPZM - Epizyme, EXEL - Exelixis, HZNP - Horizon Therapeutics (A big winner for us this year/tripled), IOVA - Iovance, KPTI - Karyopharm, TGTX - TG Therapeutics (Our Top Pick!).
  • If your thinking longer-term/income: T - AT&T (7%), XOM - ExxonMobil (10%) - high dividend yields.
  • Tech Picks: CRWD - CrowdStrike (Although be aware it has a high valuation now), DT - Dynatrace.

* 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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