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Today's Trackdown: Thursday - Jan. 28, 2021

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 a bit lower late last night.  -- Trading is a bit irrational and wacky, use caution --  Some important economic news out this morning.
    • Dow -35, S&P -7, Nasdaq -38, Russell -3. (11:00 pm ET).
  • We look good technically - But use "Caution" message has been on here for a while for a reason. (Quick sell-offs and/or getting overbought are a possibility at anytime - so we continue to leave this note).
  • The biggest factors in the market right now are; Coronavirus headlines, the US economy, the Global Economy, any political drama.
  • Watch the VIX - (CBOE Volatility Index) - Sudden huge spike! If this stays high the markets will be a bit rocky. It would be expected that the market recovers eventually and quiets down some then the Vix will drift back down.

Today's Economic Calendar:

8:30 AM ET, Gross Domestic Product, 4th quarter 2020 (Advance estimate). The consensus is that real GDP increased 4.3% annualized in Q4.

8:30 AM, The initial weekly unemployment claims report will be released. The consensus is for an decrease to 880 thousand from 900 thousand last week.

10:00 AM, New Home Sales for December from the Census Bureau. The consensus is for 860 thousand SAAR, up from 841 thousand in November.

11:00 AM, the Kansas City Fed manufacturing survey for January. This is the last of regional manufacturing surveys for January.

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:

The markets took a beat down on Wednesday. Trading news featured big tech earnings, Fed news, and wacky short squeezes.  There was some changes to our chart indicators. We broke down below the 20-day moving average and started declines in both the MACD and the Money Flow. We are just below our questionable SPY 375 support area. How much damage is done, we have to wait and see. On the longer term 8-month chart, we remain inside the dominant longer term uptrend. Good news is we are still above our strong support line at SPY 365.

- Repeating - Everything looks good, but we do keep asking - are we going to be near a top or up against resistance someday? How long can this continue?

Note: The Russell 2000 (small caps) are definitely leading the markets so far this year. Their positive uptrend is still intact.

Technically alone, we are still looking at a positive chart for the market. We are still trading well above our SPY 365 support line.

"The possibility of a consolidation, sideways market, or pullback of some kind may happen at some point." But not necessarily. Positive momentum and easy money can keep driving us to new highs.

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:

  • We broke below the 20-day moving average.

POSITIVES:

  • The MACD is positive.
  • The Money Flow is positive.
  • We are over the 50-day moving average, which is rising.
  • We are over the 200-day moving average, which is rising.

NEGATIVES:

  • We are under the 20-day moving average.
  • Stochastics are high.
  • Possible market top? Getting overbought or to high to fast?
  • * Note: The 50-day moving average has gotten way ahead of the 200-day. This can be an overbought issue.
  • What about the Fundamentals, Valuations, Virus news, the Economy, Jobs, Election issues, Politics, The FED, etc.?
  • Some things out there to worry about still! Or a wall of worry to climb as the saying goes.


OPINION:

  • Currently we are above the 50-day and 200-day MAs. (Bullish).
  • But.. below the shorter term 20-day MA. (Short-term Bearish).

  • The possibility of settling into a trading range for a while is a good possibility.
  • The bottom line being the SPY 365 is strong support and the top maybe 380ish.

  • Charts alone without thinking about the Fed, politics, vaccine, virus, etc looks good.
  • But those risks should be kept in mind.

  • 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.

* Be careful if using MARGIN at this time, be certain of your trade! *

INDICATORS:

The MACD is positive. The Stochastics are high. The Money Flow is positive.

MA +/- (slope): The 50-day MA (369.52)(+0.46) and the 200-day MA (331.25)(+0.51)

The 8-month chart (below).

We are above the SPY 365 support level.

The market has been in an impressive up-channel since June. Technically looking well.


STOCKS: < 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 last year), IOVA - Iovance, KPTI - Karyopharm, SGMO - Sangamo, TGTX - TG Therapeutics (Our Top Pick!).
  • Tech Picks: CRWD - CrowdStrike (Although be aware it has a high valuation now).
  • Also watching: DT, OMER, SRNE, TRIL, VKTX.

* 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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