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Today's Trackdown: Thursday - Jan. 30, 2020

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

In Wednesday's action:    Jan. 29, 2020

Dow 28734.36 +11.60 (0.04%)
Nasdaq 9275.18 +5.48 (0.06%)
SP 500 3273.40 -2.84 (-0.09%)

The markets ended flat after starting the day higher and fading after the Fed announcement. More push and pull after the close as Microsoft $MSFT rose on good earnings as Facebook $FB declined sharply after reporting earnings, but became a 'sell-the-news' event.


News to keep in mind Thursday morning:

  • Futures trade vs fair value were trading a bit lower late last night. More Coronavirus fears.
  • Dow -93, S&P -14, Nasdaq -31, Russell -8.
  • 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 may go a bit higher on fear.
  • CHINA TRADE news is still something to be aware of and can create instant volatility.

Today's Economic Calendar:

8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 215,000 initial claims, up from 211,000 last week.

8:30 AM, Gross Domestic Product, 4th quarter 2019 (Advance estimate). The consensus is that real GDP increased 2.1% annualized in Q4, the same as in Q3.

10:00 AM, the Q4 2019 Housing Vacancies and Home ownership from the Census Bureau.


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 near unchanged on Wednesday, but ended up making a red candle as we started higher in the morning and declined later in the day. We are still pointing out the 'Bearish Engulfing' candle that was formed 3 trading days ago. This candle sometimes marks a short-term top or change in trend. We are just above the tight stop/support level at 325.

* The charts mean a bit less currently as the coronairus news in the headlines sparks fear and selling fits. *

On the 9-month chart, we are still well above the uptrend line. This will keep us cautious. 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.

We are above the 50-day and 200-day moving averages, but we have weakness with the 20-day MA. We will be still bullish as long as we stay above the much watched and used 50-day MA.

* Keep in mind - we would not use excessive margin or open any new large positions currently. *

The Vix will need to be watched more closely. It did spike a bit on virus fears and the market pullback, but still under the 20 level which means 'don't panic' just yet.

The MACD is positive/declining. The Stochastics are neutral. The Money Flow is neutral/declining. We are above the 50-day MA.

The 50-day MA (319.45)(+0.37) and the 200-day MA (298.17)(+0.20)

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 +3.4% YTD
  • S&P 500 +1.3% YTD
  • Dow Jones Industrial Average +0.7% YTD
  • Russell 2000 -1.2% 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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