Stocks Trade Lower But Remain Resilient in the Face of Coronavirus - Chaikin Analytics
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Stocks Trade Lower But Remain Resilient in the Face of Coronavirus

US equities finished mostly lower in Tuesday trading but ended off the worst levels of the day. Energy and Financials trailed the market. Communication Services and Consumer Discretionary outperformed along with Utilities. The revenue warning from AAPL weighed on the Technology sector. Treasuries were stronger with the curve steepening. The dollar was stronger on the euro cross but flat vs the yen. Gold finished up 1.1%. WTI Crude closed flat on the day.

  • Outperformers: Utilities +0.79%, Communication Svcs. +0.40%, Consumer Disc. +0.08%, REITs (0.14%), Materials (0.23%)
  • Underperformers: Financials (0.89%), Energy (0.83%), Industrials (0.56%), Consumer Spls. (0.41%), Healthcare (0.37%), Tech (0.35%)

S&P futures are up 0.2% in early Wednesday trading. Asian equities were mostly higher overnight with Japan up nearly 1% but China closed lower. European markets are higher. Treasuries are mixed with the curve flattening. The dollar is stronger vs the yen but weaker on the the euro cross. Gold is up 0.6%. WTI Crude is up 1.4%.

Mid-Week Market Update

The SPDR S&P 500 ETF (SPY) has a Bullish Chaikin Power Gauge ETF Rating and continues to outperform the broader IWV (Russell 3000 ETF). The OB / OS Indicator is now in an overbought condition and Chaikin Money Flow remains bullish. SPY is above the rising long-term trend line and is trading just below the record levels that were achieved last week. The Power Bar Ratio is bullish at 137 to 64.    

In the near-term, there is price-based support in the $325 – $330 range. Below that, the next key zone is in the area between $300 and $310  which holds the breakout level of the July – October consolidation for SPY. 

The iShares Russell 2000 ETF (IWM) maintained a Bullish Chaikin Power Gauge ETF Rating this week but continues to lag the SPY. The fund failed to trade to a new record high last week with its large cap peers and Chaikin Money Flow has become mixed. IWM is above the rising long-term trend line and has a bullish Power Bar Ratio at 473 to 277. 

Based on the breakout, there is upside potential to the $176 level should the $160 level hold as support.

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