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The selling slowed on Friday. The day closed out down 51.57 points. The S & P 500 closed at 2,972.37.
But, for the second consecutive day, the S & P opened with a bearish gap greater than 50 points.
The bear gap on Friday was a massive 69.74 points.
And the range for the day was 84.39 points. The range was virtually the daily average true range, which is now 82 points.
But, Friday, the S & P managed to rally back late in the day to close at 84% of the range of the daily bar.
Having said that, the market will definitely not move above the high before the low today.
This is before pre open, the S & P is crashing because of the virus fears.
As I write this, the S & P is trading to the downside 145 points. There is a drop of almost 5% from Friday's close.
A 145 drop would project to an open of around 2,827. This to me suggests the S & P is well in its way to the lower band on its daily chart. That price is 2,604 and the open would put the market about 200 points of it.
The DOW is trading about 1,300 points lower. And oil is down almost 20%.
The TLT is trading almost $14 higher pre open. It is around $180 and Friday it closed at 166.77. This move puts the TLT about $24 above the upper band on its daily chart.
The shame of this panic move is that we never got an entry to get short. And clearly this is panic in the markets.
I say this because last week closed out with an inside day on the weekly chart.
This was even with a range of 235.18 points on the weekly chart.
But, the inside bar suggests there would be an expansion and certainly we are getting that this morning.
But with panic comes opportunity. The question is when and at what price?
Quite frankly, at this point, I expect a drop to the lower band on the daily chart for the S & P.
The main issue at that level is will it hold?
The XLE is trading well under its lower band on the daily chart. The lower band for the XLE is 48.68 points. And the XLE should open around $32, which is about 33% below the lower band.
And as I mentioned above, the TLT, after the open, would be trading about 15% above its upper band.
These markets are already at extremes. And the major indexes are not.
The markets are all trading lock limit down. The open will most likely be delayed.
The only good news is that with panic, comes opportunity. It always does.
ADBE reports Thursday after the close and DOCU also reports the same day.
Here are the Key Levels for the Markets:
$VIX:
Major level: 40.62
Minor level: 39.84 **
Minor level: 38.28
Major level: 37.50
Minor level: 36.72
Minor level: 35.16
Major level: 34.38
Minor level: 33.60
Minor level: 32.03
Major level: 31.25
Minor level: 30.48
Minor level: 28.91
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
Major level: 25.00
The VIX closed at 41.94, closing 2.32 points higher on the day. The VIX closed above the major 40.62 level.
With the pre market move, the VIX should no doubt open with a massive spike. A move to the 75 handle would not be out of the question.
The VIX is trading well above the upper band on its daily chart, which is 27.46.
S & P 500:
Major level: 3,427.40
Minor level: 3,398.35
Minor level: 3,320.25
Major level: 3,281.20
Minor level: 3,242.15
Minor level: 3,164.08
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80
Minor level: 2,929.75 **
Minor level: 2,851.65
Major level: 2,812.50
The S & P closed at 2,972.37. Friday's low dropped below the minor 2,929.75 level.
And today's projected open would be well under that level and almost at the major 2,812.50 level. The 145 point drop projects to an open around 2,827 or about 15 points above the major 2,812.50 level.
2,911 is the lower band on the 60 minute chart. And the market will open almost 100 points under it.
The violation of the lower band tells us that selling is not over.
QQQ:
Major level: 221.85
Minor level: 221.07
Minor level: 219.50
Major level: 218.75
Minor level: 217.97
Minor level: 216.43
Major level: 215.65
Minor level: 214.87
Minor level: 213.30
Major level: 212.50
Minor level: 211.72 **
Minor level: 210.16
Major level: 209.38 <
Minor level: 208.60
Minor level: 207.03
Major level: 206.25
The QQQ closed at 208.02. The QQQ dropped under the 209 level as expected.
I expect a move to the midband, which is 195. If this cannot hold, it paves the way to a drop to the lower band, which is 155.
The lower band on the 60 minute us 201. This level should be tested at the open.
IWM:
Major level: 175.00
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: 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 IWM closed at 144.40. The IWM did hit the 143.75 target. Friday's low was 140.99.
The lower band on the daily chart is 142.78 and the IWM should open below this.
Of course, a drop under the lower band would suggest we will have another retest of it after it closes back inside it.
The 150 area should now offer technical resistance.
TLT:
Major level: 159.38
Minor level: 158.60
Minor level: 157.03
Major level: 156.25
Minor level: 155.48
Minor level: 153.91
Major level: 153.13
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.66
Major level: 146.88
The TLT closed at 166.77. The upper band is 157.99 and Friday's close took out the upper band.
And as I said above, the TLT should open higher. Clearly panic.
The upper band on the 60 minute chart is 162.55 and the TLT should open well above it. It would be support until the TLT closes under it.
GLD:
Major level: 159.38
Minor level: 158.60
Minor level: 157.03 **
Major level: 156.25
Minor level: 155.47
Minor level: 153.91
Major level: 153.13
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.67
Major level: 146.89
Minor level: 146.11
The GLD closed at 157.49. The GLD closed above the major 156 level.
The upper band on the daily chart is 161.57. And I would expect a move above it based on these panic markets.
158.93 is the upper band on the 60 minute chart. This should be resistance. But, if the GLD takes it out, it should be support.
152 should be technical support.
XLE:
Major level: 56.25
Minor level: 55.47
Minor level: 53.90
Major level: 53.12
Minor level: 52.34
Minor level: 50.78
Major level: 50.00
Minor level: 49.22
Minor level: 47.65
Major level: 46.88
Minor level: 46.09 **
Minor level: 44.53
Major level: 43.75 <
The XLE closed at 42.50. Still trading well under the lower band on the daily chart, which is 48.68.
And based on the pre market selling, it should open even more below the lower band.
Clearly another market in panic selling mode.
41.66 is the lower band on the 60 minute chart. And the market should open under this level as well.
These two measurements demonstrate how oversold the XLE is.
AAPL:
Major level: 325.00
Minor level: 321.88
Minor level: 315.63
Major level: 312.50
Minor level: 309.38
Minor level: 303.13
Major level: 300.00
Minor level: 296.88 **
Minor level: 290.63
Major level: 287.50 <
Minor level: 284.38
Minor level: 278.13
Major level: 275.00
Minor level: 271.88
Apple closed at 289.03. Apple did take out 287.50. It hit a low of 281.23.
The midband is 232.70 on the daily chart and I expect Apple to test it.
The lower band on the 60 minute chart is 273 and should offer support. A drop under this level would tell us to expect a retest of it if it can close inside the lower band.
WATCH LIST:
Bullish Stocks: REGN, DXCM, CME, CLX, GLD, TLT, LSI, TREX
Bearish Stocks: BA, PANW, WEX, WDAY, CBRL, FDX, IT, VMW, MLNX, TWLO, CHKP, GWPH, ALXN, DLTR, WING, DIN, ATHM, ZEN, BLUE
