EB Daily Market Report - Thursday, April 2, 2020
Special Friday WebinAR (WAR) Room
We've decided to host a WAR Room for tomorrow, inviting our entire EB community. We intend to do these for our paid members every Friday for the foreseeable future (in lieu of the DMR) to hopefully provide a calmness during a stock market period that is anything but calm. I plan to discuss how I approach the stock market each and every day and share ideas and knowledge. When the stock market is in bull market mode, things are a lot easier and we, as traders, don't necessarily need to be all that smarter than the trader next to us. In this market, however, knowledge and patience will help us flourish. While most view this sudden pandemic with either a "run for the hills and never buy another stock ever again" or "bury my head in the sand and don't look at my statements" approach, I believe those who are willing to study and learn will emerge from this crisis much better intact financially, and will be poised to benefit from paradigm shifts as we move into a new bull market phase. I truly believe that once this cyclical bear market is behind us, much, much brighter days are ahead. That's what I'm personally focusing on as the next few months could be a "bridge" to get us to the bullish side of this mess. Effectively managing our resources could present tremendous opportunities as purchasing power will be paramount.
Tomorrow's session will feature a discussion as to why I remain bullish, detail some of my current research techniques, and illustrate how I'm organizing my ChartList. I'll discuss the types of trades I favor and where and how I'm looking for those trades. It should be quite educational. The timing should work well as many of us are bottled up at home and could use a more positive outlook. We value the loyalty of all of our EarningsBeats.com members and look forward to serving you all for many years to come. The event will start at 10am EST and we'll make sure everyone is provided a link to our WebinAR room. Join us tomorrow if you can!
Executive Market Summary
- Futures were lower, but rallied into the open where our major indices actually turned positive just after the opening bell
- Initial jobless claims soared to 6.65 million, up from last week's revised 3.31 million, and well above estimates
- February factory orders were flat and slightly shy of the expected 0.2% increase
- Crude oil is up 22% to $24.73 per barrel
- The 10 year treasury yield ($TNX) is off its earlier low, but still down a basis point to 0.62%
- Gold (GLD) and silver (SLV) are both jumping higher, along with a rising dollar
- Fear remains a big problem with the Volatility Index ($VIX) down 6% today, but still well into the 50s
- We have no active trade alerts at this time
Market Outlook
The S&P 500 moved back below its 20 hour EMA earlier this week and hasn't been able to recapture it yet. Until it does, I'd have to expect that we're in the midst of another leg lower. Here's that 60 minute chart:
If we can negotiate the 20 hour EMA to the upside, then I've reflected 3 key price resistance levels to watch for potential reversals. We remain in an incredibly volatile market with a wide trading range from roughly 2450-2750.
Trading Ideas
I'm currently preparing ChartLists that I will go over with everyone tomorrow morning in our Special WAR Room event.
I will mention, however, that energy (XLE) is having a huge day, rising 6.44% at last check. It did fail at its first critical level, though, which is its 20 day EMA. Check out this chart:
This points out one obvious thing that everyone must be aware of in a volatile environment. Chasing rallies like today's can be extremely painful on a reversal. The XLE, at its intraday high, touched 31.76. At its current price, it's already fallen 7% off its peak in just 3 hours. Rallies come and go, so don't hesitate to take small, quick profits in a market like this one.
I'll be back tomorrow to share my research, strategies, and short-term trading techniques with you.
Happy trading!
Tom