Trading Notes for Today – April 24th

Today is about the major indexes from my view. The NASDAQ 100 index has moved quickly back near the previous high. In fact if you look at the chart the three days April 8, 9, 10 the look very similar to April 19, 22, 23. Do we break higher? IsĀ thereĀ enough conviction from investors to carry the index? I am not convinced and the move has come from mixed earning in technology stocks at best and solid moves in the large cap biotech stocks. For now I am looking at the downside test and we will see today how this plays out.

The S&P 500 index is in a similar position. The index cleared the 1573 resistance and is heading towards the previous high at 1597. Again the test is of the move higher the last three days. Tech has helped the push higher with healthcare, consumer discretionary and staples. If financials, industrials and telecom follow through on the moves from Tuesday, the index will make a move to the previous high.

Sector Moves of Note:

  1. Crude oil is still a trade as defined on the ONLYETF Watch List. UCO – Entry at $26.80.
  2. Europe is ready to move above the $40.22 level as the next resistance. Entry at $40.40 (ONLYETF Model)
  3. VIX index fell back to 13.4 Ā as the market continued higher with no worries in sight. Test of low at 12 play SVXY with Entry at $90 and target of $95. If volatility picks up short term lookĀ forĀ a trade with VXX – Entry at $19.55.
  4. Treasury bonds overbought? Watch for TBT to bounce off support at $59 with target at $63.80
  5. Semiconductors (SMH) watch for test of the break on Tuesday. Test of 35.60 is what I am look for to take the entry today. (ONLYETF Model)
  6. Longer term trade I am interested in is SH and/or PSQ. The short side is developing and this may be a good time for an old fashioned DCA (dollar cost averaging) trade to accumulate the shares. I am still working on the exact strategy for implementing the trade.

Earnings mixed… AGAIN! But, all eyes were on Apple in after-hours trading. The real proof will come in trading today. Apple ended the session selling back below the $400 level on what I thought was bad earnings. The initialĀ responseĀ was a trade up to $425, but then move back near $400 after hours. Watch how Apple impacts the NASDAQ 100 index as well as the Technology sector.

The buyers stepped into the technology large cap stocks with XLK moving back to the $30 mark on Tuesday. A move through this level may be an interesting play short term. Remember Apple above, if it is flat or higher the trade should work, but if lower pass on any look at XLK for now. Look for entry at $30.05 with a target up to $30.60 and stop at $29.85.