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Today's Trackdown: Wednesday - April 22, 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 -631.56 at 23018.88, Nasdaq -297.50 at 8263.24, S&P -86.60 at 2736.5


News to keep in mind Wednesday morning:

  • Virus headlines and the reaction to them will continue to run the markets.
  • Futures trade vs fair value were trading late Monday night.
  • Still unpredictable! But we have successfully held above the SPY 270 support level.
  • Dow +230, S&P +30, Nasdaq +125, Russell +15.
  • 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.

Today's Economic Calendar:

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

9:00 AM, FHFA House Price Index for February 2019. This was originally a GSE only repeat sales, however there is also an expanded index.

During the day: The AIA's Architecture Billings Index for March (a leading indicator for commercial real estate).


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 Tuesday as the oil markets continued to implode and virus fears are still ongoing. We had some minor changes to the charts. Due to the last two days of selling the Money Flow went from very positive to slightly positive. Our support level at 270 is still strong and we give it good chance of holding up. We believe there is a good chance the dip will be bought.

Keep watching the 50-day moving average. The 50-day MA is above us now, buy that line is moving in a downward direction. You can find the daily change of the 50-day MA just above the chart. It may be just a matter of time before we break back above it again. 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:

  • The Stochastics went from high to neutral.
  • The Money Flow went from very positive to slightly positive the last 2 days.

POSITIVES:

  • We are still way under the old highs.
  • We are over the 20-day moving average.
  • We have held support (270).
  • 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 Vix is still high.

OPINION:

  • We are no longer short-term overbought according to the Stochastics and the Money Flow is still a positive.
  • It appears the dip should be bought. (As hard as that is for some to believe).
  • 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). Some states are starting to open things back up, keep an eye on how this goes.
  • 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 will try to update this soon.

  • Current favorites: $AMRN - Amarin, $AUPH - Aurinia Pharma, $COLL - Collegium, $EPZM - Epizyme, $EXEL - Exelixis, $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:  Do not use MARGIN at this time unless absolutely certain of your trade!  *

INDICATORS:

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

MA +/-: The 50-day MA (282.60)(-1.15) and the 200-day MA (297.83)(-0.10)

On the 9-month chart below, we are looking at a severe and quick drop of the market and then a rebound.

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 (282.60). These are the two levels to either break back above or get turned back down by.

* 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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