Sunday, May 17, 2020
Broader Market Review
Just another 1600 point swing in the Dow last week with the major averages closing slightly in the red. Not too bad really. The Dow and S&P 500 have been slowly rolling over during the past few weeks reducing upward trajectory which is actually a good thing. The reflective ascent angle off the March 23rd bottom was just unsustainable and the market needs to acclimate.
Current price levels in the Dow and S&P 500 are neutral, trading in the middle of the channel (green) from the low in 2009. In addition, they have been hovering around the halfway point between the February high and the Corona Crash low; neutral across both short and long term time frames.
Based on current data, the broader market is still vulnerable here and I wouldn’t be at all surprised to see the current drift lower to continue down into my labled Buy Zone. The reversal dip lower I forecast a few weeks ago off this neutral level has so far only been a drift.
Strength continues in the tech heavy Nasdaq which is only 6% from all time highs made just prior to the Corona Crash. Talk about a V shaped recovery! However, like the broader measures, Nasdaq is vulnerable as well and appears to be beginning a drift down into an opportunistic Buy Zone but may need a retest of resistance first.
SPDR Dow Jones Industrial Average ETF (DIA) weekly
SPDR Dow Jones Industrial Average ETF (DIA) daily
SPDR’s S&P 500 Trust Series ETF (SPY) daily
InvescoQQQ Ser 1 (QQQ) daily
Monday morning: Nasdaq is taking everything up as it has ripped right up into its resistance. The S&P 500 and Dow are now above their midpoints of the Corona Crash. Still vulnerable here but don’t trade against this strength.
Monday morning charts:
InvescoQQQ Ser 1 (QQQ)..5/18/20
SPDR Dow Jones Industrial Average ETF (DIA)..5/18/20
SPDR’s S&P 500 Trust Series ETF (SPY)..5/18/20
The Biotechnology Index Fund (IBB) I put on the Entry list on November 11th last year at $110 is currently trading at $134.35. I have a short term target of $142 that should hit this month, however, with the broader market being vulnerable at current levels this may get drawn down before getting there. Don’t get greedy. Longer term, IBB should continue to move higher.
iShares Nasdaq Biotechnology Index Fund ETF (IBB)..short term
iShares Nasdaq Biotechnology Index Fund ETF (IBB)..longer term
Have a good week,
Don