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Stock Market Analysis - 4/1/2020Markets have shown us what direction it wants to go and the direction is down. Since the last analysis, markets were continuing an impressive but overextended bounce. The markets continued this action on Monday and through mid Tuesday. By late Tuesday, there were some big red flags that markets were cracking and this recent bounce may be over. On the SPY I have been calling out the 260 area as a key level of resistance to watch. On Monday I had expected SPY to pullback to the 5DMA however what we got instead was a continuation move right below 260. Tuesday was a continuation of Monday's move, however SPY cracked when price fell below 260, retested it, and then closed LOD. Notice where we rejected; price rejected off a declining 20DMA, a clear signal that the longer term bear trend is still valid. This was actually an excellent area to get short after the 20DMA reject on Tuesday. For tomorrow, I expect SPY to continue this short term downtrend, however I will be watching the 237 level closely for support. The action on QQQ is a reflection of SPY however QQQ suffered a little less pain in terms of downside. I'll be watching the 178 area as a level of support. Again, I won't go over IWM and DIA since the price action is pretty much the same as SPY. IWM did suffer the worst pain with a -6.81% drawdown. VIX is probably the most interesting case study for today. Despite the impressive downside we experienced today, VIX did not react as severely as it did in the past. It seems as though volatility has already reached a peak - a good bullish sign. However, VIX is currently consolidating and could just be building up energy for a more powerful move in the near future. Tread carefully. Overall, the short term trend is currently bearish. If you are bullish, I would not try to fight this trend till we see clear signs of bottoming. We are not guaranteed to see a retest of the lows however I would definitely not want to be long right now. Short trades can be taken however with tight stops and quick profit taking. Yesterday and today were perfect days to initiate a short trade (See my AMD short on 3/31/2020).
AMEX:SPY
by Trader_Kaji
A NEW IDEA ON LEVERAGED INVERSE ETF SQQQSQQQ goes up when the market goes down . Since this is a leveraged ETF, the position size is one-third of your normal position. The recommended position size is up to 7% of full core position size, but reduce it based on your own risk preference. This is suitable only for super aggressive experienced investors because the risk of loss is high but rewards are also high. This is a short term trade. The buy zone is $19 to $20.27. it is trading at $20.27 as of this writing. Stop zone is $17.11 to $18.23. The first target zone is $24 to $25.68. The second target zone is $27 to $32. ------------------------------------------------------------------------------------------ 200,000 Deaths Dr. Fauci says there may be 100,000 to 200,000 American deaths due to coronavirus. The stock market is discounting (assuming) less than 25,000 deaths. The 80% probability of the 'mother of support' zones holding that we have been sharing with you is based on the model at The Arora Report that is assuming 100,000 - 150,000 deaths. Trump Relents Trump has relented on opening the country by Easter. He has extended social distancing to April 30. Science May Triumph At one time futures were down 4%. A lot of buying is coming in on potential good news on the science front. We all want coronavirus to end. It is the government’s job to spin the reality to keep the morale of the country up. It is the prudent investor’s job to discern the truth. Science may triumph and cause the stock market to bottom. Where Is The Bottom? The mother of support zones has 80% probability of holding – this along with RSI should be the main reference points to look for a bottom. There is simply too much optimism in the stock market and in many cases investors are buying without doing research. Here are a few examples: - Abbott Laboratories (ABT) has come up with a coronavirus test that takes five minutes. The revenues from coronavirus test will dwarf against the revenues Abbott is likely to lose due to issues related to coronavirus. Investors are running up the stock. - Johnson & Johnson (JNJ) is making great progress on a coronavirus vaccine. Johnson & Johnson is likely to sell the vaccine at cost. This will have no material increase in earnings yet investors are running up the stock. - General Motors (GM) will make ventilators. General Motors is selling them at cost. Again this will have no impact on earnings yet investors have run up the stock on the news. - Medtronic (MDT) makes ventilators but ventilators are a very small portion of its business. At the same time, Medtronic is suffering because its sales are likely to drop due to postponement of none essential surgeries. Without understanding the whole picture investors have run up the stock. The foregoing shows that there is simply too much optimism and investors are buying without doing research. In my over 30 years, I have never seen a bottom when investors behave this way.
NASDAQ:SQQQLong
by sickgains
4
DIA Monthly Chart is indicating bottom level @ 160 !I applied Elliot Wave, Fibonacci and Trend Analysis on the Monthly chart of DIA. RSI of DIA was creating a negative divergence from 2018 and signaling for a huge correction ! So Market was searching a correction point and Corona Virus helped the market for that. Now question is how much correction will happen ! Here there are two reasons for correction- 1. Natural correction needs, 2. Corona Virus impact and Economic loss of the whole world. So obviously we will not get rid of the bear market very easily ! According to my analysis there is another 25% of correction needed to get the potential bottom which is around 160 level. 160 Level is very much strong for some reasons- 1. Monthly Fibonacci 161% ratio support, 2. Previous strong Support, 3. Trending line Support. I believe DIA will recover from 160 level strongly and start rally again ! Thanks.
AMEX:DIAShort
by TanzirHasan
1
Stock Market Analysis - 3/25/2020 - $SPY $DIA $QQQ $VIXIt seems like the overall market outlook has changed and for the better. With a looming $2 trillion stimulus on the horizon, markets have broke the intermediate trend and looks to be in a stage of recovery. Since my last analysis, I expected markets to start to consolidate at this level and this looks to be the case. Although the downtrend has terminated, this does not mean a uptrend has started. The intermediate trend is now neutral and we need to start looking for clues (higher lows and higher highs) that could initiate a new uptrend. Fundamentally, we still do not know what toll this virus will put on the economy. This will become more clear as unemployment, consumer sentiment, and industrial numbers for the quarter are released in the near future. First, lets look at the SPY. Yesterday, SPY gapped up and broke above the downsloping trendline and closed at HOD - a good sign for a followthrough day. Today we got a somewhat flaky followthrough day as we closed at the middle on the range following a large selloff at the end of the day. The intermediate term trend is currently neutral. For a bullish case, I would like to see SPY test the 235-238 area where the 5DMA and Anchored VWAP from the lows align. Otherwise we could easily a retest of lows. I won't go too in depth with QQQ and DIA today as they all look very similar to the action on SPY; however it is important to note today's changes in each index. QQQ closed red at -0.74%, DIA closed green at +2.54%. Notice the relative strength in DIA and relative weakness in QQQ. During Bear markets, it is common to see rotation out of previous leading sectors such as Technology (QQQ) and into utilities and industrials (DIA). A quick google search about Sector Rotation can better explain this phenomena. This type of price action are clear indicators we are in a bear market and until we see rotation back into leading sectors such as technology, this bear market will continue to persist. The price action on VIX is quite telling for what the future could hold. Although we had a nice reaction bounce yesterday and today, VIX recovered it's initial gap down and closed green today. VIX looks like it is consolidating and could breakout tomorrow. I expect VIX to retest highs. Overall, the intermediate trend and the short term trend are both neutral and volatility is still high. These are not favorable conditions for the swing trader. Until we see trending conditions, now is not the time to put on new trades. Instead, as a swing trader you should use this time to start looking for new long or short ideas. When markets start to trend, you will be ready to take advantage of the new leg up or down.
AMEX:SPY
by Trader_Kaji
2
Have A Look At The Dow Jones $DJIThis is a WEEKLY chart. Each candle represents one week of price activity. Although I don't typically trade the DJI, the major media outlets publicize "The Dow" levels every day. I think this chart is important for the average investor. In 2013, The Dow got to the 16,000 level. Ever since then, the 16,000 level has been support. You can see that in Oct 2014, Aug & Sept of 2015, and Jan 2016 this 16,000 level is where The Dow turned higher after a decline. Round numbers show up in many places in investing. They should be respected and they should be considered. Keeping this discussion simple, a round number may wind up being the place where The Dow shows us support again. The Dow has already given up the level it was at when the current president (Pres #45) became president. That is 3+ years of market gains given back in a four week period of time... If you ask me, that says a lot about how "strong" the economy has been. I could go on for a bit about this topic. But I won't. Let me just say that you can't only listen to the narrative from politicians about the market & the economy. You have to pay attention to details. Pay attention to charts. It is a learning process. It will take time. It will feel like a college class that you fell behind in. But no one can pay attention to your money like you can... How low will The Dow go? Honestly. I have no clue. All I can do is pay attention to the past and look for clues about the future. No one can answer this question for you. You just have to pay attention to some details. Dow 18,000 is a place that The Dow met resistance and then some time later found support. Dow 16,000 is a place that The Dow didn't find much resistance but it found support many times. Is there a clue in here about where The Dow will find support. Maybe. I have never been a part of history where our economy has shut down. I watched the tech bubble burst but I wasn't investing at the time. It is so hard to fathom that our government has chosen to shut down the economy... It is also hard to fathom how low The Dow will go because of the decisions our government has made. Let's hope that The Dow turns around somewhere between where it is today and 16,000. Let's watch the chart for more clues. Clues like an inside week that resolved to the upside. Clues like a weekly candle with a higher high and a higher low than the last weekly candle. Clues like a weekly candle that dips below the previous candle's low but then closes the week above the previous candle's low. These are only clues. They are not tell tale signs of a clear turn in the market. Keep watching. Keep learning. Don't give up. This may be another on of those "best time to buy stocks in our lifetime" moments. Then again, it could be something else...
DJ:DJI
by TheTrendLineInvestor
Current global markets situation and everything you need to knowTo gain an edge, this is what you need to know now. 1) Yields on 10 and 30-year Treasury bonds stayed way above their lows as the stock market fell to new lows. This is a big positive. 2)Oil held way above its Sunday lows. This is a big positive. 3) The Fed is providing unprecedented liquidity of as much as $1.5 trillion. The stock market first rallied 6% on the news and then gave it all back. This indicates that the Fed is not going to be able to save this market. However, Fed's move will stop several potential dislocations in the financial markets and that is a positive. 4) This afternoon near the lows, smart money was lightly and selectively buying. 5) Big part of the selling was due to margin calls. This is a positive because margin calls eventually exhaust themselves. Gold Central bank selling in gold continues. Here are the key points. - Central bank selling in gold, perhaps from Russia, appears to have continued. - There are rumors that Italy is selling gold to pay for coronavirus expenses. - When the stock market was halted, gold market was still trading. Over extended investors desperate to raise money sold gold to pay for margin calls in the stock market. - Now that the momentum in gold has reversed, the momo crowd is aggressively selling gold. - As gold miner stocks have pulled back on selling in gold, there is a bloodbath in ETFs GDX and NUGT on margin calls. Smart money continues to buy gold and gold miner stocks on dips. Complacency My proprietary indicators are showing that there is still too much complacency among investors. Many investors continue to believe that the market always goes up after brief dips. Such investors are not selling. "Buy the dip crowd is still alive and well." Until these two groups of investors start selling, there is only a low probability of a lasting bottom unless there is a good news on coronavirus.
OANDA:SPX500USD
by sickgains
1
SPX Support Levels (Nearing buy levels)SPX has been hit hard lately but I think we are now closer to support levels that should be watched closely. I have a few stocks with market cap slashed in half and/or are more than 50% down that I am watching. As I mentioned in my last $AAPL idea, this downturn will move fast now before the fed rate cut and any stimulus package. I believe that we hold the 200MA (second support in the chart) if not then we have a long way down to Dec 2018 lows. I know the expert will blame corona virus but digging deeper, the market was overly overvalued and needed to sell off with or without the corona virus. Now, the corona virus could lead us into a recession in which case whatever extended bounce we get with the stimulus package and rate cut will be temporary.
SP:SPXShort
by UnknownUnicorn3272672