EB Daily Market Report - Monday, September 28, 2020
This will be very brief as I'm recovering from a severe tooth issue from over the weekend. I honestly don't know if there is anything more painful than a toothache, although our mom members might disagree! I'm doing better today than I was yesterday, but I'm still trying to relax the rest of the day. As a result, this DMR will be very, very brief. Also, just a heads up, but tomorrow morning's Trading Places at StockCharts will likely be a previous recording. I should be back to a normal schedule by mid-day Tuesday. Thanks for your understanding!
Because of this issue, we felt it was best to postpone the Q4 Market Outlook webinar to Wednesday, September 30th at 4:30pm ET. We record all of our webinars, so don't fret if you can't make the event live. We'll make sure you get a copy of the recording.
I've only looked at the market briefly today, but strong futures and decent follow through have sent most of our key indices back above their respective 20 day EMAs, a positive and necessary development to turn the bearish market behavior in September back to bullish. Let's see how we end the day as the final two hours is always more important than the first two hours. I'm watching the NASDAQ 100 ($NDX) most closely. Should we close above the 20 day EMA today, I believe we'll have our confirmation that the September low will not broken anytime soon. Moving averages like the 20 day EMA act as resistance during a downtrend. Once you break above the 20 day EMA, it begins to paint a picture of either (1) sideways consolidation in which the low has been established or (2) a resumption of the prior uptrend. If the latter occurs, I'd begin looking for a bullish continuation pattern like a cup with handle or possibly an inverse head & shoulders pattern. I'm not providing a guarantee of a bottom in place, just suggesting that the technical odds favor it.
From an individual stock perspective, I really like the breakout today on UPS. It's one of our Model Portfolio stocks and also one of the stocks I wrote about over the weekend at StockCharts.com in the ChartWatchers newsletter. I provided 3 stocks that I believe could have solid pre-earnings advances. The 3 stocks I discussed were UPS, INOV, and AMD. You can read my article HERE.
I'll check on the market periodically this afternoon, but I really like what I saw last week in terms of rotation and the follow through we're seeing today.
Happy trading!
Tom