Tickers discussed: SPY QQQ IWM Strategy update
The Market Recap provides the stock market recap for the day. Key levels and trading locations for the indexes are provided, along with trading plans and timely commentary to keep you on the right side of the trade.
- Bond yields re-accelerated to the downside
- The VIX spiked to $43 before backing off to $39.60 into the close.
- Cruise and Airline stocks decimated.
Thoughts for Tomorrow
- Fridays have not been kind to equity markets in 2020.
- Hey guy’s…..let’s get long into a Corona weekend and a 1000 point gap down Monday morning! Just kidding, but you get the point.
- News flow gets worse before it gets better. The more Corona kits that get sent out means more testing and the more you test, the more you find.
- The bias should be lower but if price says higher, follow it.
- Watch oil. OPEC is in meetings. They say if no agreement can be reached, the bottom falls out. Cascading oil prices are never bullish for the market.
- A big IF, but IF we were to re-tag the prior lows, I’d be looking to cover shorts. We’d be oversold again and at least a marginal bounce would be expected.
- The exception would be a panic waterfall event that sliced through everything. That’s the one thing we have not seen is panic.
- Be careful of excessive exposure over the weekend.
Index Chart Review
Price made a brief run out of the gate but was stopped by the declining 8ema. As you can see the gap that remains yet to be filled. Once price went below the 200ema at $305.60 it went on to fill the gap the gap to $300 before bouncing. The key for tomorrow is $300. A break below opens the door to lower prices, possibly to the prior low although there is some support around $295
SPY 60 min
The 60 min view couldnt be more clear. $300 is the short term bull bear toggle. Notice the bear cross on the PPO. A check mark for the bears but not to the extent that the bulls couldnt reverse it tomorrow.
I wanted to show the 15min for 2 reasons. 1) THe break of the trendline gave a great sell signal. 2) Notice the double top price put in yesterday. A break of $300 triggers the double top formation. Not by coincidence, the measured move lower points to the prior low.
Price took a run at yesterday’s high but fell about $2 shy thus leaving a gap to be filled later. Price also made a solid run to fill the lower gap but again fell shy by about 60c. I think traders can use todays close as the bull / bear toggle. If price goes ahead and fills the gap to 209.48 and breaks below it should bring in more sellers.
QQQ 60min chart
Not a lot of technical support below 209.48. If that breaks I will be leaning in short and looking for a move towards the prior low. Note the bear PPO cross working .
Although I did not make the annotation, like SPY, price has a double top set up in the works. Also, today that break of the 15 min trend line gave a solid sell signal.
IWM Daily Chart
The chart is well annotated. I think the right posture is to fade rallies unless price clears $152. Above $152 get long. The big key is $144 which is long term support. It will offer chances to get long but if it ever breaks, flip short with size. I think it will go fast when / if it breaks.
To my eye $147.50 looks like an intermediate bull / bear toggle point. Above opens door to $150 and above 150 favors a gap fill to 152. But as long as price stays below $147.50, $144 remains in play..
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