|NYSE||Adv 997||Dec 1941||Vol 687.91 mln|
|Nasdaq||Adv 1001||Dec 1803||Vol 1703.45 mln|
IN THE NEWS HIGHLIGHTS:
- Bank of Japan surprises market by holding policy steady.
- Dollar tumbles against yen (Dollar Index also broke a vital support zone).
- Bloodbath in the market today.
- Q1 GDP Growth (0.5%; Briefing.com consensus 0.9%)
- Facebook (FB) beats analysts’ expectations for Q1.
- Quarterly earnings in focus.
- Increased M&A activity among health care names.
- Carl Icahn dumps AAPL causing shares to drop even further.
RECAP– A very interesting day. Technically, the major activity occurred last night as the Bank of Japan announced monetary policy. The market instantly clipped 20 points on the news. It looked to have mostly recovered after the morning opening bell only to give up its gains in the late morning and throughout the afternoon. This has been the most volatile day in the markets that we have had in weeks.
In-depth look of daily news at Briefing.com (CLICK HERE)
In-depth look at after hours movers (CLICK HERE)
- Monetary Policy Statement from the Bank of Japan – This technically came out last night at 11pm, but it had a major impact across the currencies, commodities, and equities markets. For detailed coverage on this, check out my detailed analysis here.
- Advance GDP q/q – Actual: +0.5% Forecast: +0.7% Previous: +1.4%
- The change in growth of the US GDP from quarter to quarter (reported in annualized form). This figure is slightly alarming as the trend for advanced data has been in a downward slope. Now, this figure is only a preliminary number and likely going to be revised, but even if you use final GDP data, the last 4 quarters have seen slower growth than the previous 4 quarters.
- April 29: No major news
FedWatch June 15 Rate Hike on Probability for April 28: 11.3% (View the probability chart here)
A Look At The S&P Futures Intraday Chart – KEY Levels
- BoJ Statement caused the ES Futures to break it’s support of the 92-94 range and clip 20 points almost instantly.
- Found new support around the 2074 mark.
- Retested the old support range (new resistance), crossing over briefly until precipitously falling to 2065.
- Hung around 2070 at the closing bell (4 pm).
- Continued to retrace to 2074 (old support and possible new resistance) after the closing bell.
- VIX spiked.
- TRIN did NOT close over 2. Usually TRIN closing over 2 on a down day is a market breadth indicator for a bullish reversal for the following day.
A Look Into the Heat Map
Bloodbath in the market today. AAPL dropped further causing the most damage as Carl Icahn announced that he is dumping shares. Aside from Facebook (FB) posting positive earnings, the only real safe havens in today’s selloff are in the Consumer Discretionary and Utilities sectors.
VIX – 15.22 – We saw an increase in volatility today, also a gauge of fear in the market.
Oil (USO) – Bull – Crude Oil reached an all new high today just above $46 and may be at resistance as it gave up some ground going into the close. Look out for a retest of resistance.
Ag (DBA) – Bear
GLD – Bull – We saw a decent spike in gold. This is due to a flight to safety as there is plenty of equity and currency risk in the market but also due to a collapse in the dollar making gold more expensive as it is price in USD.
SLV – Bull
UUP – USD weighted ETF – Bear – I am rather bemused that the BoJ Statement had a bigger impact on the US Dollar than the FOMC Statement did yesterday. As I mentioned in my other post today, the news from the Bank of Japan caused the dollar to drop precipitously. As seen in this intraday chart, the dollar proceeded to form a low base right on top of support at 94, formed a cup and handle pattern testing twice before finally breaking the 94 mark, and continuing to run. As you learn in Master Trader, old support becomes new resistance as the dollar tried to cross over again later this morning, but failed to do so.
Here are 5 observations I made on the Dollar Index on multiple different time frames:
1. It’s Bearish.
2. It’s kind of forming a double top (M) pattern on the 3 year/Weekly candlestick chart. As well as additional M’s within each top.
3. Broke key support at 94.
4. The 8/17/9 MACD on the weekly chart crossed under on March 7-March 14 and has already run a good 3-4% of its total value.
5. The 50 day MA crossed under the 200 day MA (daily chart) on 3/30/16.
SOLON’S TRADING THOUGHTS
Proceed cautiously. If you still have puts on your portfolio in preparation of yesterday’s FOMC Statement, it may be a good idea to keep them on. As Tim always says, “it’s never a bad idea to buy insurance when the VIX is at or below 15.” There’s really no telling what the market will do tomorrow and if it breaks that support zone at 2070 on the /ES futures chart, then it could run for quite a bit (ie. previously indicated support zones of 2040 or 2000). Current internals that I look at (being the VIX crossing over the Bollinger Band, the TRIN closing above 2.0, a huge spike in volume indicating support holding) aren’t showing a short term (bullish) reversal. For this reason, Tim’s words of wisdom hold especially true today.
You can follow daily trade adjustments and updates on Twitter, Facebook, or text “follow @tackletrading” to 40404 to get text alerts!
If you are not a Pro Member and following the Stock & Option Picks, then check it out! There is a Promo code for Free 15 day trial: THETA
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.