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The DJIA
rallied +2.39% on Wednesday. The SPX +28.23, 1.15%, had been up more than 100
points during the day, pulled back about 80 points going into the close
as differences over unemployment provisions of the stimulus deal became
public. Differences were ultimately resolved,
and the Senate passed the bill late Wednesday evening. It now moves to the House for approval.
Eight
of eleven
sectors were higher on Wednesday, led by XLI, XLE and XLRE
SPY up 3.64 at 246.79 on 299.4
million shares, above average volume. Up
on higher volume.
VIX up 2.28 at 63.95
BA, UTX, NKE led the DJIA, 18 advancers, -11
AFL, NCLH, RCL, MPC led the SPX, 356 advancers
ROST, ALGN, UAL, EXPE led the NDX, 49 advancers
Two-year trend
term closed above 2018 support. 3-day short term trend
is up.
Up: DIA, SPY,
IWM,
Down: QQQ,
Breadth weakened
slightly on Wednesday as advancers led 2,423 to 587 on the NYSE and
led 2,208 to 1,134 on the NASDAQ
The SPX
MFC green line moved up to 12 and is a down-trend
counter-trend bounce.
Uptrend sectors:
Neutral sectors:
Down trend sectors: XLK,
XLV, XLU, XLRE, XLC, XLP, XLY, XLI, XLB, XLF, XLE,
The 6-month intermediate
trend is down. The ten-day trend is down.
3-month Intermediate Term Market Trend: Down
3-day Short Term Market Trend: Up
49 of 100 NDX stocks
closed higher on Wednesday.
2 NDX stock is above their 30 DMA: CTXS, JD,
NDX Stocks to Watch on Thursday:
Moving Above 30 DMA = 0
Moving Below 30 DMA = 2
GILD,
REGN,
Add Comments here:
3 comments:
Hi Dave, thanks for your analysis. V-bottom or bear flag and drawing a channel in SPY would see the last 2 days as a diagonal breakout. I tend to go with the bear flag. How do you tell apart?
Best regards
Mark
Mark, Thanks for the question.
When playing tennis, how does a player know when to attack the ball to their right and use a forehand or to attack the ball to their left and use a backhand? Clue: they never attack to the right with a forehand when the ball is going to their left.
V-bottom bounces go up and bear flag bounces go down. Watch the bounce and then go in the direction of the bounce.
Or as Dave always says, "trade what you see."
Best of success. Dave
Thanks Dave for taking the time to give me an answer. For me the bounce went through the FIB 23.6% resistance level and hence I consider it not a bear flag any more and traded neutral with a small +delta accordingly. In hindsight, of course, I wonder that lots of people went long already 2 days before (as 2 of your articles suggest).
In your seminars you say "price action discounts everything" if I remember and quote you correctly. Also I recall you saying something like market movements are indicative of the general developments which in the case of the Corona virus "crisis" could mean: the market has discounted that all in and from the point of view of the stock market that "crisis" is already over.
Best regards
Mark
PS Is Investools still active because that is how I came to know you years ago.
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