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Today's Trackdown: Tuesday - April 7, 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 +1,627.46 at 22679.99, Nasdaq +540.15 at 7913.23, S&P +175.03 at 2663.68


News to keep in mind Tuesday morning:

  • Virus headlines and the reaction to them are running the markets.
  • Futures trade vs fair value were trading lower late last night. Expected pullback or profit taking after the huge jump on Monday.
  • Still unpredictable! But we have successfully held above SPY 240 support and broke over 260. Resistance is at 270.
  • Dow -190, S&P -20, Nasdaq -95, Russell -13.
  • The biggest factors in the market right now are; Coronavirus headlines, the Fed, the Oil price war, the Global Economy and Global Geopolitical conflicts.
  • Keeping an eye on the VIX - the CBOE Volatility Index is spiking due to virus fear and fear of economic fallout due to the virus. When the Vix peaks, the market bottoms.

Today's Economic Calendar:

8:00 AM ET, Corelogic House Price index for February.

10:00 AM, Job Openings and Labor Turnover Survey for February from the BLS.

3:00 PM, Consumer Credit from the Federal Reserve.


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 went up BIG on Monday and did make some positive changes to the chart. The Money Flow has gone from slightly positive to positive for the moment at least! Many did not think this could happen. BUT.. notice we are just below 270. This is a resistance level on our 4-month chart. Also due to the huge jump on Monday, it is almost expected to pullback a bit the next day or 2.

* We may stay under the control of virus headlines, so keep an eye on them.

* 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

IF your sure the market bottomed and want a high leveraged bet: The small cap 3x ETF is it. $TNA

CHANGES:

  • The MACD is a negative number, but is still rising now after a positive crossover.
  • Our 240 Support level is confirmed.
  • The Money Flow has turned positive.

POSITIVES:

  • We are still way under the old highs.
  • The MACD has bottomed and is rising.
  • Not technical - BUT it appears the Chinese are going back to work. If believed.
  • 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 remains high.

OPINION & STOCKS:

  • Short-term using caution, maybe defensive.
  • Look for trading opportunities with this high volatility!
  • Be aware that we are susceptible to large pullbacks or dips with a high level of volatility.
  • Keep using caution as the Coronavirus is not cured and continues to spark fears about an economic slowdown.
  • 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.

  • We like: $AMRN - Amarin (See recent news), $AUPH - Aurinia Pharma, $CARA - Cara Therapeutics, $COLL - Collegium, $EPZM - Epizyme, $HZNP - Horizon Pharma (if under 30), $IOVA - Iovance (constant buyout rumors), $IMMU - Immunomedics (FDA approval date coming soon, see recent news!), $KPTI - Karyopharm, $TGTX - TG Therapeutics.
  • If your thinking longer-term: $T - AT&T is worth a look, high dividend yield.

* Currently some of the market action is "unpredictable or irrational". Keep that in mind if trading. *

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

VIX: Spikes on virus fears! Expect possible price swings. If the market has truly found a bottom or support the Vix will start coming back down.

INDICATORS: The MACD is negative, but rising. The Stochastics are neutral. The Money Flow is positive.

MA +/-: The 50-day MA (292.29)(-1.24) and the 200-day MA (298.44)(-0.13)

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

The 240 support line is now considered 'confirmed'.

260 on this chart appeared to be some resistance, although we got above it on Monday.

* 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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