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Today's Trackdown: Wednesday - April 1, 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 -410.32 at 21917.22, Nasdaq -74.05 at 7699.45, S&P -42.06 at 2584.59


News to keep in mind Wednesday morning:

  • Futures trade vs fair value were trading a bit lower late last night.
  • Still unpredictable! But we have successfully held above SPY 240 support. 260 acts as resistance.
  • Dow -300, S&P -36, Nasdaq -87, Russell -23.
  • 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:

7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM, The ADP Employment Report for March. This report is for private payrolls only (no government). The consensus is for 154,000 payroll jobs lost in March, down from 183,000 added in February.

10:00 AM, ISM Manufacturing Index for March. The consensus is for the ISM to be at 45.0, down from 50.1 in February.

10:00 AM, Construction Spending for February. The consensus is for a 0.6% increase in construction spending.

Late, Light vehicle sales for March. The consensus is for light vehicle sales to be 11.9 million SAAR in March, down from 16.8 million in February (Seasonally Adjusted Annual Rate).


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 down a bit on Tuesday, which was not unexpected as we have mentioned the Stochastics are high. Our SPY 240 support level has lasted for 6 days and is now support. Keep remaining cautious though as the Vix has remained high. Volatility did drop a bit lately, but is still very high. Also we have seen SPY 260 act as a resistance level.

What we need in order to make an official bottom is 2 days in a row or more of gains (We got that) and for the Vix to start coming down *(We have NOT gotten this yet). Also bottoms are found when there is little market reaction to negative news. So we have a half a bottom and are now thinking there is a possibility that it will hold up. BUT... Virus fear or panic will keep this scenario at risk.

* 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

CHANGES:

  • The MACD is negative number, but had a positive crossover and is rising now.
  • Our 240 Support level is holding.
  • The Stochastics are getting a bit high/overbought, a brief pause/pullback is possible.

POSITIVES:

  • We are still oversold.
  • The MACD has bottomed and is rising.
  • Not technical - BUT it appears the Chinese are going back to work.
  • The Money Flow has turned 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.
  • The Stochastics are a bit high. (Short-term overbought).

    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. The Stochastics are high/overbought. The Money Flow is slightly positive.

MA +/-: The 50-day MA (298.38)(-1.44) and the 200-day MA (299.12)(-0.13)

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 see the possibility of the 240 area for support. With 6 days above it now, this level appears top be holding.

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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