Send me real-time posts from this site at my email

Today's Trackdown: Monday - March 2, 2020

  • SPY Charts and some Technical Analysis

Recap of the previous market day....  (click here)....   Dow -357.28 at 25409.33, Nasdaq +0.89 at 8567.37, S&P -24.54 at 2954.22

Previous Day's Cartoon


News to keep in mind Monday morning:

  • Futures trade vs fair value were trading a bit higher late last night. Still unpredictable...
  • Dow +168, S&P +19, Nasdaq +61, Russell +13.
  • The biggest factors in the market right now are; Coronavirus headlines, the Fed, 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:

10:00 AM ET, ISM Manufacturing Index for January. The consensus is for the ISM to be at 50.4, down from 50.9 in January.

10:00 AM, Construction Spending for December. The consensus is for a 0.7% increase in construction spending.


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 charts mean a bit less currently as the Coronavirus news is in the headlines and can spark fears. *

* Due to the virus and the fears/headlines charts may only really show what possible support levels might be. *

The markets were lower again on Friday, but there was a roar of late day buying into the close. The Nasdaq actually ended very slightly positive. So did we find a bottom or some kind of support? Our indicators are all oversold. The Money Flow had taken a nose dive and is extremely oversold. We are now under the 50-day moving average and even the 200-day moving average, which is a big negative from the technical standpoint.

CHANGES:

  • The Money Flow bounced a bit with the late day buying Friday, but is still very oversold.
  • The Stochastics are oversold, but maybe curling up signalling a short-term bottom.

POSITIVES:

  • We usually would be considered VERY oversold here!
  • There is a possibility with the very heavy volume on Friday a lot selling has been washed out now.
  • The Stochastics may have bottomed.

NEGATIVES:

  • The MACD is declining.
  • The Money Flow is very negative.
  • We are under the 50-day moving average.
  • We are under the 200-day moving average.
  • The 50-day moving average is declining.

OPINION:

  • Short-term using caution, maybe defensive. We are susceptible to large pullbacks or dips and may see increased volatility.
  • Keep using some caution as the Coronavirus is not cured and continues to spark fears about an economic slowdown. We would still buy the dips in individual stocks that we favor which become very oversold.
  • The  U.S. economy is still doing well, have to keep an eye on how the virus might slow it down and how much.
  • After any big sell-offs or dips - look for names that are oversold to buy. Have your trade list ready.
  •  * Currently much 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. *

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/declining. The Stochastics are oversold. The Money Flow is very oversold.

MA +/-:   The 50-day MA (325.88)(-0.43) and the 200-day MA (302.49)(+0.08)

On the 9-month chart below, we were looking at a severe and quick drop of the market. All patterns were broken and voided. Next step is to find some sort of support level that actually holds. We have marked 290 as our next line in the sand. With the big buying finish late Friday we closed above it.

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.

If you liked this article, please click the LIKE (thumbs up) button.

Feel free to leave any comments, question, or opinions. (Sign-up if you haven't already done so).

Follow us/bookmark us and check back occasionally for additional articles or comments on our page...

Wild Tiger Trading - start/main page.

With our Daily Trackdowns, check back for additional analysis/observations during the trading day in the comments by us or our readers.

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue