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Today, we are back with the first update of 2019. So, it is good to be back. And I trust and hope you had a great New Year.
Yesterday ended the day closing 3.18 points higher. This was after a major bearish gap of almost 30 points.
After the bearish gap, the S & P 500 found support at the low of the day which was 2,467.47. After that, the market proceeded to rally until 2:00 when it hit a high of 2,519.49.
From there, it pulled back a bit to close at 2,510.03. The range for the day ended up at 52.12. This was actually less than the average true range which is now 60.93.
Monday was actually the first close above the lower band on the daily chart. And yesterday actually dipped below it before recovering to close for the second day above it.
The lower band is 2,484.80.
So, this is a key level to watch again.
And the support level from yesterday's daily bar is in the 2,493 area, or about 8 points above the lower band.
And finally, the daily bar closed at 82% which puts the odds of violating yesterday high before the low at around 80%.
Pre open, the S & P 500 is trading about 32 points lower. This puts the projected open around 2,478 which is under the lower band. The key is if the market can reclaim the lower band.
I do want to review the December monthly price bar. The December monthly price bar had a range of 454 points. I want to point out that the December range was the largest of the year.
And not only was the December bar the largest of the year, but it was almost three times the average true range of 153 points.
Couple this with the fact that the monthly bar closed at 35% of the range, this does indicate that this sell off is not over.
In fact, I will say that this should set up a shorting opportunity once we do get a decent rally in the market. And I do believe we will get a rally because of how oversold the market is in the short term.
The first resistance level from the monthly bar is around 2,573. And the second resistance level is around 2,650. Both these levels are price areas to watch for resistance.
The upper band on the monthly chart is now 2,770.57 and should be resistance.
Continue to monitor the levels as I mentioned above.
Here are the Key Levels for the Markets:
$VIX:
Major level: 43.75
Minor level: 40.63
Minor level: 34.38
Major level: 31.25
Minor level: 29.69
Minor level: 26.56
Major level: 25.00
Minor level: 23.44 **
Minor level: 20.31
Major level: 18.75
The VIX closed at 23.14 for the day. It was down 2.28 on the day. The VIX continued to break under the upper band on the daily chart. That level is now 29.75 and should be resistance.
The VIX already took out the 25 level which would suggest that it should ne be resistance.
And a close today under 23.44 and the VIX should drop to 18.75.
21.88 is a minor support level.
SPX:
Major level: 2,578.10
Minor level: 2,558.58
Minor level: 2,519.53
Major level: 2,500.00 <
Minor level: 2,484.38
Minor level: 2,453.13 **
Major level: 2,437.50
Minor level: 2,421.88
Minor level: 2,390.63
Major level: 2,375.00
The S & P 500 did manage to close above 2,500. This should suggest that 2,484.38 should be support.
With a projected open just under this level, look to see if the market can reclaim it.
If the market cannot reclaim it and does close two days under it, it would suggest a drop to 2,437.
Watch to see if the lower band can be held on a retest.
The next minor level on the upside is 2,519.53.
2,468.80 is minor support.
QQQ:
Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Minor level: 160.94
Minor level: 157.81
Major level: 156.25 <
Minor level: 154.69
Minor level: 151.56 **
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
Major level: 143.75
The QQQ closed at 154.88. This QQQ managed to come within 50 cents of the 156.25 level.
The 150 level should offer support. No doubt the QQQ will be dragged down by the negative announcement coming from Apple.
If 150 cannot hold, look for support around 146.88.
IWM:
Minor level: 145.31
Major level: 143.75
Minor level: 142.19
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81 **
Major level: 131.25 <
Minor level: 129.69 **
Minor level: 126.56
Major level: 125.00
The IWM closed at 134.66. Yesterday it did manage to close above the lower band which is 133.02.
This now implies that if the IWM closes above 132.81, it should test 137.50.
Minor support is at 132.81 and 131.25.
TLT:
Major level: 123.44
Minor level: 123.05
Minor level: 122.27 **
Major level: 121.88 <
Minor level: 121.49
Minor level: 120.70
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75
Minor level: 118.36
The TLT closed at 122.15, up .64 on the day. 122.66 is a minor resistance level and if the TLT can clear it, I would expect it to move higher.
The daily chart continues to inch closer to an uptrend. It is now within 15 cents of crossing into an uptrend.
121.48 should be support.
GLD:
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88 <
Minor level: 121.10
Minor level: 119.53 **
Major level: 118.75
Minor level: 117.97
Minor level: 116.41
Major level: 115.63
The GLD closed at 121.33. The GLD did come within 6 cents of the 121.88 level.
The GLD will have to clear 121.88 to move higher. And minor resistance is at 123.44.
120.31 should be minor support.
XLE:
Major level: 68.75
Minor level: 67.97
Minor level: 66.41
Major level: 65.63
Minor level: 64.85
Minor level: 63.28
Major level: 62.50
Minor level: 61.72
Minor level: 60.16
Major level: 59.38
Minor level: 58.60
Minor level: 57.03 **
Major level: 56.25
The XLE closed at 58.48. Yesterday was actually the first close above the lower band on the daily chart. That level is 57.81.
Watch to see if the lower band can hold.
56.25 should offer support. And also minor support is at 57.81.
FXY:
Major level: 85.94 <<
Minor level: 85.75
Minor level: 85.36 **
Major level: 85.16
Minor level: 84.97
Minor level: 84.58
Major level: 84.38
Minor level: 84.18
Minor level: 83.79
Major level: 83.59
The FXY close at 87.65. It was up 0.54 on the day. It is moving up from the midband which is 86.70.
88.28 is minor resistance and 87.11 is minor support.
AAPL:
Minor level: 173.44
Minor level: 170.31
Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Minor level: 159.38
Minor level: 153.13
Major level: 150.00
Minor level: 146.88 **
Minor level: 140.63
Major level: 137.50
Apple closed yesterday up 18 cents on the day. It closed at 157.92.
But the big news this morning is the negative guidance from Apple. It appears set to open around $13 lower, around 144. Watch the minor support level at 140.63. And 146.88 should be resistance.
If Apple cannot reclaim 150, it should suggest if will head lower.
WATCH LIST:
Bullish Stocks: BGS, RCII, LSCC
Bearish Stocks: RTN, JAZZ, UTX, RACE, JACK, GILD, BG, CCL, KHC, PRGO, BCE, GIS, MD, TUP, ANDX, AL, JCI, CAG
Be sure to check earnings release dates.
