US Market update - Friday, April 17, 2020

US: Wall Street ends week on high note, Dow closes up 3%

DJIA closed above its 50% Fibonacci retracement level, by raising 2.99% (704.81 points) to close at 24242.50.
- This was the highest since 11th March. However there was a slightly bearish rising wedge pattern seen because the volume has not declined as it moved higher.
- Watch 24681 level as resistance level.

DJIA weekly chart :
- DJIA had closed (24242.50 points) above its 200ma after its 1st attempt last week. 
- This is the 4th week DJIA rebounded from 2013-2016 consolidation zone top. It is testing to re-enter back into its top consolidation / supply zone.
- Note that it has closed near to its weekly high (24264.21) with sustained high volume.

S&P500 was up 2.68% (75.01 points) to close at 2874.57 points with increasing volume. 2914.81 could be the resistance to test.

SP500 weekly chart : 
- See that SP 500 at supply zone until 2940 level. Expect volatility this week.

VIX back at demand zone having covered its recent gap up, having shed 4.89% (1.96 points) to close at 38.15.

Nasdaq just closed its bearish gap by gapping to open on it. 
- It then faded until 2nd half session saw the stocks recovered its losses to close 117.78 points higher at 8650.14.
- Note that it is near its 90 day MA above.
- It has also closed above its 61.8% retracement from its bottom. Nasdaq has arrived where it previously was a major support.

Russell 2000 rose 4.33% (+51.009 PONTS) to close at 1229.098. 
- 38.2% retracement level remains its immediate resistance

US: Wall Street ends week on high note, Dow closes up 3%
18 Apr 2020 06:20

[NEW YORK] Wall Street stocks finished sharply higher Friday, closing out a second week of gains as US officials moved forward with plans to gradually reopen the economy.

The Dow Jones Industrial Average added more than 700 points, or 3 per cent, ending at 24,242.49.

The broad-based S&P 500 gained 2.7 per cent to 2,874.56, while the tech-rich Nasdaq Composite Index advanced 1.4 per cent to 8,650.14.

Analysts pointed to a number of positive catalysts, including a report of promising research on a Gilead Sciences drug to treat coronavirus, Boeing's announcement that it will resume US commercial plane production and the release of a White House blueprint to reopen the economy.

In one of the first moves by a major US state, Texas governor Greg Abbott approved retailers to employ a "to go" model that requires reopened stores to deliver items to customers' cars or homes.

But Mr Abbott said Texas schools would remain closed for the remainder of the 2019-2020 school year.

TD Ameritrade chief market strategist JJ Kinahan cautioned investors not to expect the recovery to come quickly.

"Investors seem optimistic that there's light at the end of the tunnel," Mr Kinahan said. "Investors should be cautious though, as the 'getting going' might end up being slower than expected."

All three major US indices finished the week higher, shrugging off atrocious economic data, including another spike in jobless claims and a big drop in retail sales.

Boeing jumped 14.5 per cent after announcing it will begin to ramp production back up at its Washington state commercial plane plants, bringing back around 27,000 workers.

Gilead surged 9.7 per cent following a news report about promising research on an antiviral medication from the drugmaker being tested to treat the coronavirus.

Apple dropped 1.4 per cent following a downgrade from Goldman Sachs, which predicted weak demand for iPhones due to the economic slowdown.

Source 

https://www.investing.com/markets/united-states
https://www.investing.com/indices
https://www.finviz.com
https://money.cnn.com/investing/about-fear-greed-tool/index.html
https://money.cnn.com/data/fear-and-greed

Fear and Greed Index

On this page, you will find our latest updates on the CNN Fear and Greed Index.

The CNN Fear and Greed Index in its purest form answers the question, “What is the predominant emotion of the stock market right now?”

It’s a sentiment indicator that tells if equities are undervalued or overvalued. The logic behind it is that too much greed can push stock prices beyond their fair price, while too much fear can cause stocks to slip well below their intrinsic price, as traders don’t act rationally in the short-term.

The Fear and Greed index uses seven indicators to conclude the extent of the market’s fear and greed and measures the market’s sentiment based on these two emotions on a daily, weekly, monthly, and annual basis. The following metrics compose the index and aim to provide a holistic view of the market’s emotions:

1. Put and Call Options: How much have put options lagged behind call options?
2. Market Momentum: Where is the S&P 500 relative to its 125-day average?
3. Stock Price Strength: It counts the number of stocks that have touched 52-week highs vs. 52-week lows on the New York Stock Exchange (NYSE).
4. Stock Price Breadth: The McClellan Volume Summation Index compares the volumes on rising stocks versus declining ones.
5. Safe Haven Demand: How well are stocks performing compared to safe-haven assets like US Treasury bonds?
6. Market Volatility: It uses the Chicago Board Options Exchange Volatility Index (VIX) relative to its 50-moving average.
7. Junk Bond Demand: What is the spread between junk bonds and safer, investment-grade corporate bonds?

How to use the Fear and Greed Index?

The seven metrics are individually-measured on a scale of 0-100 with lower numbers indicating fear while higher figures pointing to greed. They are then weighted equally to calculate the Fear and Greed Index.

The index is a great tool to help investors and traders get an idea of when it is time to enter the markets. When the Fear and Greed index is trading near its recent extreme lows it hints that a significant bottom in the market is pending. The index should be interpreted with the help of technical analysis to improve entry signals. It is also possible to use the index to figure out when the market is overbought, but at least historically, the indicator is less useful to predict significant highs.

DISCLAIMER:

Hello,
All information updates, tables and charts are for informational purposes only; they are not intended for trading purposes or advice.
We do not and cannot guarantee the accuracy of the information.
Please consult your broker or financial representative to verify pricing before executing any trade.
We are not liable for any actions taken in reliance on information contained herein.

With best regards,
Martin