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Today's Trackdown: Tuesday - April 21, 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 -592.05 at 23650.44, Nasdaq -89.41 at 8560.74, S&P -51.40 at 2823.16


News to keep in mind Tuesday morning:

  • Virus headlines and the reaction to them will continue to run the markets.
  • Futures trade vs fair value were trading a bit flat/mixed late Monday night.
  • Still unpredictable! But we have successfully held above the SPY 270 support and broken over the resistance at 280. (Wow).
  • Dow -4, S&P +1, Nasdaq -2, Russell +4.
  • The biggest factors in the market right now are; Coronavirus headlines, when the economy will re-open, the Fed, the Global Economy and Global Geopolitical conflicts.
  • Keeping an eye on the VIX - the CBOE Volatility Index had spiked due to virus fears. When the Vix peaks, the market bottoms. (Looks like this has already happened).

Today's Economic Calendar:

10:00 AM ET, Existing Home Sales for March from the National Association of Realtors (NAR). The consensus is for 5.30 million SAAR, down from 5.77 million.


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 fell on Monday as the oil markets imploded. We had a few notable changes. We dipped back below the 50-day moving average and the Money Flow went from very positive to positive. Our support level at 270 is still intact and 280 is still hanging in there with a question mark.

Watch the 50-day moving average. The 50-day MA is just above us now after we dipped back under it Monday. Why is the 50-day MA so important? Keeping an eye on the 50-day MA is important as many market technicians use this as their main go to benchmark as well as computer trading algorithms.

* We may stay under the control of virus headlines, so keep an eye on them.
* Much will depend on how soon the economy is opened back up and how much damage was caused by the shutdowns.

* 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 - $TNA.

* Beware - levered ETFs are subject to decay and are not for long-term holding. *

CHANGES:

  • We dipped just below the 50-day moving average.
  • The Money Flow has gone to just positive from very positive.

POSITIVES:

  • We are still way under the old highs.
  • The MACD is rising.
  • We are over the 20-day moving average.
  • We have held support (270) and broken over resistance (280).
  • The Money Flow is 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 Stochastics are high.
  • The Vix is still high.

OPINION:

  • We are short-term a bit high according to the Stochastics. But, the MACD is currently strong and the Money Flow is positive. So a mixed picture.
  • Keep using caution, maybe defensive. We still have a bunch of uncertainties.
  • Look for trading opportunities with this high volatility!
  • Be aware that we are susceptible to large pullbacks or dips with the current high level of volatility.
  • The U.S. economy is uncertain. We must keep an eye on how much the virus slows it down and for how long. (Currently an unknown).
  • After any big sell-offs or dips - look for names that are oversold to buy. Have your trading lists ready.


STOCKS: (Our most recent FULL Trading List was posted here).

  • We like: $AMRN - Amarin, $AUPH - Aurinia Pharma, $COLL - Collegium, $EPZM - Epizyme, $EXEL - Exelixis (Just had a huge up 25% day on good Kidney cancer drug news!), $HZNP - Horizon Pharma (if under 32), $IOVA - Iovance (constant buyout rumors), $IMMU - Immunomedics (FDA approval date coming soon), $KPTI - Karyopharm, $TGTX - TG Therapeutics.
    If your thinking longer-term/income: $T - AT&T is worth a look - high dividend yield.
    New ideas: $CVS, $BFYT - Benefytt Tech, $CRWD - CrowdStrike.

* Feel free to share your list/picks in the comments below.

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

INDICATORS:

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

MA +/-: The 50-day MA (283.75)(-1.00) and the 200-day MA (297.93)(-0.07)

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

The 270 support line is now considered as 'confirmed' support. It would be a good technical sign for the markets if we stay above 270.

280 - Was the next obvious spot for resistance as well as the 50-day moving average (283.75). But the market is now higher than 280, but below the 50-day MA.

* Continue to use caution - Still many unknowns. *

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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