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Today's Trackdown: Monday - April 6, 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 -360.91 at 21052.53, Nasdaq -114.23 at 7373.08, S&P -38.25 at 2488.65


News to keep in mind Monday morning:

  • Futures trade vs fair value were trading higher late last night. New virus cases lower??
  • Still unpredictable! But we have successfully held above SPY 240 support. 260 acts as resistance.
  • Dow +630, S&P +70, Nasdaq +260, Russell +44.
  • The biggest factors in the market right now are; Coronavirus headlines, the Fed, the Oil price war, the Global Economy and Global Geopolitical conflicts.
  • Keeping an eye on the VIX - the CBOE Volatility Index is spiking due to virus fear and fear of economic fallout due to the virus. When the Vix peaks, the market bottoms.

Today's Economic Calendar:

No major economic releases scheduled.


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 went up a bit lower on Friday, but we did notice the Vix also went lower. This maybe a sign that a bottom or a support level can now be confirmed. The SPY 240 support level is now an official support line for us! BUT even so...keep remaining a bit cautious as the Vix remains high. Volatility did drop a bit lately, but is still a high number. In addition to 240 being support, we have marked SPY 260/270 as resistance levels.

* 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

IF your sure the market bottomed and want a high leveraged bet: The small cap 3x ETF is it.  $TNA

CHANGES:

  • The MACD is a negative number, but is rising now after a positive crossover.
  • Our 240 Support level is holding strong.
  • The Money Flow stayed slightly positive despite the decline Friday.

POSITIVES:

  • We are still oversold.
  • The MACD has bottomed and is rising.
  • Not technical - BUT it appears the Chinese are going back to work. If believed.
  • The Money Flow is slightly positive.

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 Vix remains high.

OPINION & STOCKS:

  • Short-term using caution, maybe defensive.
  • Look for trading opportunities with this high volatility!
  • Be aware that we are susceptible to large pullbacks or dips with this high level of volatility.
  • Keep using caution as the Coronavirus is not cured and continues to spark fears about an economic slowdown.
  • The U.S. economy is uncertain. (As far as we are told/know). We must keep an eye on how the virus might slow it down and by how much.
  • After any big sell-offs or dips - look for names that are oversold to buy. Have your trading list ready.

  • We like: $AMRN - Amarin (See recent news first), $AUPH - Aurinia Pharma, $CARA - Cara Therapeutics, $COLL - Collegium, $EPZM - Epizyme, $HZNP - Horizon Pharma (if under 30), $IOVA - Iovance (constant buyout rumors), $IMMU - Immunomedics (FDA approval date coming soon), $KPTI - Karyopharm, $TGTX - TG Therapeutics.
  • If your thinking longer-term: $T - AT&T is worth a look, high dividend yield.

* Currently some of the market action is "unpredictable or irrational". Keep that in mind if trading. *

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

VIX: Spikes on virus fears! Expect possible price swings. If the market has truly found a bottom or support the Vix will start coming back down.

INDICATORS: The MACD is negative, but rising. The Stochastics are neutral. The Money Flow is slightly positive.

MA +/-: The 50-day MA (293.53)(-1.62) and the 200-day MA (298.57)(-0.19)

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

We now mark the 240 line as support as we have spent 8 days now above it and consider this level 'confirmed'.

260 on this chart appears to be some resistance.

* Continue to use caution as we deal with the breaking down of the previous chart patterns.

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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