Nasdaq Market Update for 10/19

19 окт. 2020 г.

Trend lines drawn from 9/3 (32d), 9/24 bottom (18d), 10/12 pivot day (6d), 10/13 (5d), and today 10/19 (1 day).

Monday, October 19, 2020
Pray tomorrow takes me higher

Facts: 1.65% lower, Volume higher, Closing range: 8%, Red Body: 78%
Good: Held above 21d EMA , volume still not super high
Bad: Almost everything, start up 1% but go down the whole day
Candle: 78% red body with 8% closing range.
Advance/Decline: 0.35, twice as many stocks declining than advancing
Sectors: All sectors were down, but Utilities ( XLU ) was the best performing of the day. Energy ( XLE ) led with gains in the morning. Technology ( XLK ) and Communications ( XLC ) were worst of day.
Expectation: Sideways or Lower

The stock market opened the week on a sour note on Monday. After being up 1% at open, the market quickly turned and trended downward the entire day. The Nasdaq finished the day -1.65% lower on higher volume (my indicator above is from QQQ ). The candle is a large red body of 78%, with a short upper wick from the morning gains. A closing range of 8% shows we ended the day at the bottom. There were twice as many declining stocks than advancing. Although volume was higher, it is still lower than recent average volume . The index is testing the October support area as well as the 21d EMA .

The S&P500 lost 1.63% on the day. None of the sectors ended the day with gains. Utilities ( XLU ) performed the best. Energy ( XLE ) had early morning gains before pivoting and losing ground. Communications ( XLC ) and Technology ( XLK ) were the worst performing of the day.

If the 21d EMA support can hold, then a small gain around 0.80% might be expected. That would continue the trend from the 10/12 pivot and also meet up with the 5d line and the trend line from the 9/23 bottom. With good news on stimulus or the pandemic, that could bring the index back to it's longer trend from early September which points to a 4.21% gain. However, the index is trading in the lower half of that regression channel.

Continuing today's downward trend would take the index below the 21d EMA for a -1.93% loss. It would likely get support at the 50d MA as well as the September support area of 11,300. Going further than that would be a very negative signal and we would put our eye on the July support area of 10,600.

I'm keeping the June Support line in view, but its 9% below the Friday close and there are 4 key support levels that the index would have to break thru. If we have a significant downside that takes the index below 11,300, then I'll add that possibility back to the chart.