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Today's Trackdown: Tuesday - Dec. 3, 2019

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

In Monday's action:    Dec. 2, 2019

Dow 27782.95 -268.37 (-0.96%)
Nasdaq 8567.98 -97.48 (-1.12%)
SP 500 3113.87 -27.11 (-0.86%)

The S&P 500 dropped 27 points on Monday, as weak manufacturing data and some trade worries contributed to a bad start to December. The mood on the street wasn't as negative as the losses would suggest, though. The market had a great month of November, so Monday might have been driven by some profit taking.


News to keep in mind Tuesday morning:

  • Futures trade vs fair value was trading slightly higher late last night.
  • Dow +42, S&P +5, Nasdaq +14, Russell +5.
  • The biggest factors in the market right now are; the Global Economy, China trade talks, Fed speak, and the US Treasury markets.
  • Keep an eye on the VIX - The CBOE Volatility Index is near 13, this is a risk on/neutral level.
  • CHINA TRADE WAR is still something to be aware of.

Today's Economic Calendar:

All day: Light vehicle sales for November. The consensus is for 16.8 million SAAR in November, up from the BEA estimate of 16.6 million SAAR in October 2019 (Seasonally Adjusted Annual Rate).

10:00 AM, Corelogic House Price index for October.


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 lower on Monday, as we renewed negative trade war headlines and received a poor ISM number. Due top the size of down volume today, the Money Flow went down from very positive to just positive. We still have a possible support level marked at 310. We shall see if that holds this week it appears.We do think there is a good chance we remain above it, if not 304 is the next level to look at.

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 all three 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.

The Vix did spike up Monday, but that has only brought it to a more neutral reading just under 15. This is still a risk on level, but with a bit of caution.

The MACD is positive. The Stochastics are neutral/high. 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 (302.64)(+.27) and the 200-day MA (290.88)(+.19)

On the 9-month chart below, we have broken out to new highs with the previous tops line near 302.50 marked as our support level. We remain in an uptrend channel, but be aware at the top end of the channel. use caution as we have poked above the top of the channel, in many cases we bounce back down into the channel.

  • Nasdaq Composite +29.1% YTD
  • S&P 500 +24.2% YTD
  • Russell 2000 +19.2% YTD
  • Dow Jones Industrial Average +19.1% 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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