As part of our program to offer our readers a complete, comprehensive platform and to utilize the data gathering, analytical capabilities directed at hemp, we are broadening our research proficiency to include the capital markets. Originally, our algorithms remain focused on hemp, basically to uncover mistakes made in the emerging industry and design antiquate safeguards for our comprehensive and evolving business model. We have not moved away from our prime object to become a major CBD hemp liquids producer, but this new opportunity was uncovered somewhat by accident. By applying analytical to "best guess" answers to any question presented --- we originally asked: "What would happen to the hemp market if COVID 19 became a worldwide pandemic?" From our posted commentaries, our conclusions inevitably focused on the capital markets. In essence, every event was transmitted by us before the actual event transpired. From the level of the extensive statistics assembled, and the consequence of the COVID 19 pandemic, we have significant assets to uncover investment opportunities, and the resources to showcase our algorithms with the best Wall Street offers. And by our historical recorded remarks, we have been more accurate than all the respected reporting. Whether this performance continues is unknown, but the analytical cannot be denied.
Accordingly, we plan to broadcast the financial news exclusively on what are algorithms are declaring.
Expecting Volatility To Hang Around A While
Futures had rebounded +2% overnight, but have given up those gains pre-Thursday trade as they slide back into the red under yesterday's low. This keeps the down trend intact below falling 20-day moving averages for the majority of the market.
Note on the Index ETF proxies all have a bullish gap that is still open from March 24. It is quite possible that sellers will look to close that gap as each successive probe of a prior higher low will trigger a wave of "sell stop" orders.
The McClellan Oscillator had jumped to "overbought" territory late last week, putting the breaks on this rally. The VIX still remains very elevated around 50-60 area, so it is still a "risk-off" environment that is really suited towards "day-trading" only. The action remains "wide and loose" so investors need to be highly selective in what, when, and how much they are willing to commit.
Bottom line is the world remains at the mercy of this global pandemic that is affecting our health, lifestyles, and our wealth. The more vigilant we remain, as well as adapt to our new (and hopefully temporary) environments, then the better off we will make it through these worrisome times.
Below is the 60-min SPY chart displaying key Support & Resistance Zones to monitor.
Crude USO is bouncing back from recent multi-year lows.
Gold GLD remains fickle at best as it whipsaws up and down each day.
The US Dollar UUP appears to be stabilizing in the middle of its wide and loose March range.
Bonds TLT are hesitant on their recent rise to get above prior week's resistance.
It is important to note that on a Weekly chart, many Index and Sector ETFs managed to log bullish reversal signals. Some were "bullish engulfing," some a series of Higher Highs and Lower Lows. While there remains a ton of overhead resistance to overcome, it is a possible sign that a bottoming process could be underway. More confirmation of buyers thwarting off further selling pressures and lifting prices higher is needed to be certain. Given the fears surrounding the pandemic and its effect on the global economy remains front and center and a logical concern for all as both health and wealth are at risk. However, when the market goes to such extremes, it historically tends to do the "illogical" and rally against the fear. Admittedly, this time does feel different as we remain at the mercy of a global pandemic affect, so we must stay vigilant.
Technically, the market is at a short-term crossroad as Fibonacci retracements off this correction start to come into play. The S&P has to battle with 2650/2664 resistance which marks its 38% and 50% retracement off the February and March highs, respectively.
Another thing to note is the market has been using the spikes higher on "positive" headlines as an opportunity to sell into strength. Be aware of the day that the market fails to go lower or reverses on a "negative" headline, as it will assume the worst is already priced in. The reactions to data can be more telling than the data itself.
Support & Resistance Table for Thursday, April 2, 2020