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Today's Trackdown: Friday - Jan. 24, 2020

  • Brief Recap and Updates on the Markets
  • SPY Charts and some Technical Analysis

In Thursday's action:    Jan. 23, 2020

Dow 29160.00 -26.18 (-0.09%)
Nasdaq 9402.50 +18.71 (0.20%)
SP 500 3325.54 +3.79 (0.11%)

Stocks rebound from early intraday losses with the Nasdaq closing at a record high.


News to keep in mind Friday morning:

  • Futures trade vs fair value were trading a bit higher late last night.
  • Dow +36, S&P +3, Nasdaq +39, Russell +2.
  • The biggest factors in the market right now are; coronavirus headlines, the Fed, the Global Economy and Global Geopolitical conflicts/Iran.
  • Keeping an eye on the VIX - The CBOE Volatility Index is still under 13, this is a risk on level.
  • CHINA TRADE news is still something to be aware of and can create instant volatility.

Today's Economic Calendar:

10:00 AM: State Employment and Unemployment (Monthly) for December 2019


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 ended mixed again on Thursday with the Nasdaq making a new record high as the early day dip was bought.  We were watching the Vix and did not see any kind of spike or panic. Which tells us the market is just trying to alleviate a short-term overbought condition. We still favor that we are going to drift higher. The Stochastics at still at a high/overbought level and we still do have a concern with the 9-month chart. On that chart we are well over the uptrend line. So we still will stay a bit cautious. We now draw a tight stop/support line at 325 for those who like those things. So we expect the market to keep going higher, but expect we need to correct at times when overbought conditions persist.

Our support levels remain the same, with the first support level being marked at 320. This level could also be used as a 'stop' for some positions if you have a low risk tolerance. Much stronger support is at 310.

 [Again] We still view the current set-up under 'normal conditions' is still telling us we should continue to move sideways or up. We notice the 20, 50, and 200 day moving averages are all in alignment and are all moving higher. The current price is also above the 20, 50, 200 MAs, which is good.

BUT - Keep in mind and how far we have risen and how fast we have gotten this high, a bit of caution is needed.  Although at the same time, there is nothing saying we won't just keep drifting to new highs for the rest of the year and start of the next. As we previously written, you can let winners run, but we would not use excessive margin or open any new large positions.  [/Again]

The Vix is still down in the 12s, normally a full 'risk-on' area.

The MACD is positive. The Stochastics are high/overbought. The Money Flow is positive. We are above the 50-day MA. The 20,50,200 day moving averages are in a positive alignment and heading higher.

The 50-day MA (317.93)(+0.48) and the 200-day MA (297.33)(+0.23)

On the 9-month chart below, we remain in an uptrend channel that has lasted now for about 8 months! Caution though as we are currently above the upper trend line, which is an overbought look. In many cases we drop back down into the channel either by a pullback or by going sideways until the upper trend line catches up.

* For those who like to use stops or lock in profits, we would use the upper trend line as the place to do that, currently just above 322. *

  • Nasdaq Composite +4.8% YTD
  • S&P 500 +2.9% YTD
  • Dow Jones Industrial Average +2.2% YTD
  • Russell 2000 +1.0% YTD

$DIA $SPY $QQQ $IWM

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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