Nasdaq (-0.26%) gapped lower in the morning but succeeded in snapping back up. The formed candle had a bottoming tail that might suggest buyers came in at the support area (marked on the graph). This area is a key one, if the price breaks down, we might see lower prices. Also, for the upside scenario, let’s watch if the price can close above yesterday’s high and then above the SMA50.
SP-500 (+0.30%) also gapped down but here buyers came in during the second part of the day (with volumes) and sent the price above Thursday’s close. It seems the support area is respected for now. Watching this level for a possible breaking down. For the reversal scenario: watching yesterday’s high and SMA50.
In the news
Twitter will finally let you edit tweets — if you pay.
Revisions confirm a steep decline in U.S. productivity in the second quarter.
Amazon took all U.S. solar rooftops offline last year after a flurry of fires and electrical explosions.
Netflix Seeks Top Dollar for Brands to Advertise on Its Service.
After selling Nvidia last month, Cathie Wood’s ARK snaps up the graphic chipmaker’s stock as it hits a 52-week low.
Sectors
Best yesterday sector: Healthcare, then Utilities. Worst sector: Basic Materials.
Best weekly sector: Utilities, then Consumer Defensive. Worst sector: Basic Materials.
Best monthly sector: Energy, then Utilities. Worst sector: Technology.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 32.36
VIX (neutral under 20): 25.56
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.98
CNN Fear & Greed: 44 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 33.70%
Stocks above SMA200 (neutral above 30): 25.59%
Number of stocks that increased yesterday by more than 4%: 117
Number of stocks that decreased yesterday by more than 4%: 397
McClellan Oscillator (neutral between -100 and 100): -208.78
Earnings Reports
Lululemon LULU 0.00%↑ jumps after it boosts its outlook and posts a strong earnings beat. Shares of the optical-networking hardware company Ciena CIEN 0.00%↑ fell 10% after reporting weaker-than-expected earnings.
No noteworthy earnings reports for today.
What to trade today
Market gapped down in the morning and during the evening some sectors came back to life (Bio, Pharma, Solar - it is very like to see the new TMLs, true market leaders, igniting from these groups of stocks).
We might see a reversal today, we are oversold now. Let’s wait for some volatility contraction, declining ATR and low volumes.
Identify strong stocks with earnings / sales acceleration and good accumulation in top sectors / industries and then look for patterns. Remember, no pattern, no trade.
In a bear market is common to see a few days advance and then an erase of all profits.
I personally do not see any good pattern with a low-risk entry in my watched list, therefore I will not plan to trade today. It is risky to trade back and forth, but if you do, just consider using a smaller position and a tighter stop.
Do your due diligence if or when placing a trade. All ideas stated here are my own and do not represent trading or investment advice.
In order to learn more about trading, you may want to read:
Thank you. Excellent advice in uncertain times. I am holding on to some energy stocks and keeping an eye out for volatility contraction in other sectors.