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INDEX Targets: Scenario For The S&P, Russell, Semis

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From recent all-time highs to the lows, the stock market fell over 25% in three weeks. This is the quickest drop in history. Thursday, March 12th saw the biggest decline (over 2000 points on the Dow) since the crash of 1987. Investors are panicking and running for cover, but many are also wondering if the stock market has bottomed. There are key factors every investor needs to look for. If done correctly, the profits can be insane. 

  1. Investors and stock traders need to monitor fear. The higher the VIX goes, the more likely the market is nearing a bottom. In 2008, the VIX traded between 70-95. On Thursday, when the stock market had its biggest drop since the crash of ’87, the VIX went over 75.

  2. Control your own emotions and recognize the more fearful you feel, the more likely is the time to buy. Fear was palpable over the last few trading days. In fact, it was full out panic. Talking heads on TV were panicking, people were mobbing the the stores for hand sanitizer and food/toilet paper.

  3. Look at technical levels. This is insanely important. Find a major pivot on the chart, look for a bottoming tail and isolate a huge volume day. When three things like this happen on the same day and the markets are down 25% in three weeks, you likely have at least a near-term bottom.

  4. Start small. Markets in full panic can pierce key technical levels. The smartest investors know they won't nail the bottom to the penny so they start buying small. They know they want to accumulate a total of XX position. But they start with buying 1/3 of that or 1/2 of that. This keeps stress down and often will give the investor an overall better average.

  5. Go with quality names, not non profitable small caps. Stocks like American Express and Disney are down 30%+ in just weeks, these are quality stocks that should be considered versus high risk small caps that make no money. Same thing applies with Apple, Microsoft, Alphabet…ect.

The bottom line is, while $137 billion was pulled out of the stock market last week by small investors, the right signal may have been to buy the markets. Think about it like this. Three weeks ago the stock market was at all-time highs. Investors were praying for a 3% pullback to buy. Now they have a 25% pull back and are afraid to buy. Smart money looks for quality stocks and inches into them at key technical levels. That is how a fortune is built.

 

Gareth Soloway

Chief Market Strategist

InTheMoneyStocks

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Good idea for a thread

/ 2 /

Maybe just do the opposite of whatever this over-celebrated Lefty economist suggests.

I think he is always wrong

GettyImages-493571738-e1578522023911-640

Paul Krugman, the Nobel Prize-winning trade economist and New York Times columnist, celebrated the sharp decline of the stock market due to the coronavirus on the grounds that, in his opinion, it would hurt President Donald Trump.

“Economists, myself included, often make a point of saying that the stock market is not the economy, which it isn’t. It *is,” however, pretty much the Trump presidency,” Krugman tweeted. “Take away his magic talisman and there’s nothing left.”

. . . Krugman was one of the most prominent economists to predict that markets would collapse following the election of Donald Trump.

> https://www.breitbart.com/economy/2020/03/16/paul-krugman-celebrates-stock-market-rout-because-he-thinks-it-hurts-trump/

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10 year chart - suggests some important support at about 235

spy - 10yr : 10d / last: $238.  day low : $236

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if it does not bounce from near here, the bear is truly vicious

: 10d /

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Shares of the semiconductor ETF (SMH) tagged a long-term trend line yesterday when it breached $96. This can be seen on the technical chart below. While the panic continues over Covid-19, the semiconductor ETF signals a near-term bounce at least. This likely means the markets could see near-term relief as well, as the semi’s are a leading market indicator. In terms of S&P ETF (SPY) upside, look for a bounce at least back to $271.00. There is a key gap fill at that point that will be big resistance.

See the chart here: https://inthemoneystocks.com/semi-etf-smh-hits-long-term-support-level/

Gareth Soloway
InTheMoneyStocks
Chief Market Strategist
 

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At this time, the markets are looking for a TARP deal out of the Congress. Over the weekend, the U.S. Senate was unable to agree on a stimulus deal. This news caused the S&P 500 futures to trade limit down in overnight trading. Another procedural vote on a stimulus package in the Senate will take place at noon today. A failed vote could send the markets sharply lower again.

Earlier today, the Federal Reserve announced an open-ended quantitative easing program. They will buy corporate bonds in the primary and secondary markets. They will also buy Agency Commercial Mortgage Backed Securities. This news helped the markets to stabilize and actually rally before the opening bell. Now the markets seem to be waiting on the politicians once again. Watch the charts and be ready for the action!

See the chart here: https://inthemoneystocks.com/markets-are-hoping-for-a-stimulus-deal/

Nick Santiago
InTheMoneyStocks
Chief Market Strategist

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i am confused.

I thought you were saying it was Time to Buy?

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Market crashes have occurred throughout history. What is happening now has happened before. As written in the book of Ecclesiastes, there is nothing new under the sun. Every market crash at some point will also experience a bounce. This current market crash has seen the Dow Jones Industrial Average (DJIA) fall by as much as 34% in just six weeks. So when a bounce does actually arrive it can be fast and sharp.

While most investors will talk in terms of points when a bounce begins, I prefer to look at retraces. A simple 0.382 retrace will take the DJIA back up to 22,550 level. So this is a very good target for traders to watch. More conservative traders should note that a simple 0.25 retrace takes the DJIA to 21,000. Either way, these are some short term targets that I’m watching for right now. Note the chart below and trade accordingly…

See the chart here: https://inthemoneystocks.com/what-kind-of-bounce-can-we-expect/

Nick Santiago
InTheMoneyStocks
Chief Market Strategist

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DEAD CAT

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Shares of the Russell 2000 ETF (IWM are bouncing for the second day in a row. The big question is, what is the bounce target? To answer this we turn to technical analysis. This epic collapse in the Russell 2000 started at $169 on February 20th, 2020. By March 19th, 2020 it tagged $95.50. This was an huge collapse of 43.50% in one month. A drop of this magnitude, this quickly is almost unheard of. In any case, the collapse percentage does give us some great information technically. When we do our Fibonacci retrace lines, we find that a 38.2% retrace is near $124.00 (current price is $111.00). In addition there is a major gap fill $126.00. When two major technical levels are so close together, it gives investors a good idea that will be an ideal target near-term.

To summarize, the Russell 2000 ETF (IWM) will likely bounce to $124-$126 in the coming weeks before stalling and possibly turned back down.

Check out the chart below... https://inthemoneystocks.com/how-high-can-the-russell-2000-etf-iwm-bounce/

Gareth Soloway
InTheMoneyStocks
Chief Market Strategist

How High Can The Russell 2000 ETF (IWM) Bounce - In The Money Stocks
https://inthemoneystocks.com


Sindhuja, 00:15
Hey Bryan, I understand that you want Ravi to find out the platforms and people who interviews on Stock market. then reach out to them using your email address with the draft given by you. While we continue this task, we need to create a google sheet to track the companies or shows we contacted, track their responses basically everything up to date

So, Ravi can research this for you but is this limited to any particular location or anywhere in US? 

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LOL Dr B, made me smile but that seems about the most succinct answer you can give right now.

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ONE OR TWO threads for this poster?

He never responds to comments

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Believe it or not, the Russell 2000 Index has shown leadership over the past week. Even today, the iShares Russell 2000 ETF (IWM) is trading higher by more than 6.0% on the session. Trader should remember that the Russell 2000 Index represents small capitalization companies in the United States. When that index shows leadership it is very big positive for the markets and the country. It should be noted that the Russell 2000 Index was the weakest index during the recent February and March stock market crash. It declined the the most and the fastest. The recent rally in the IWM is certainly a change in character for the small cap stocks and the stock market.

Check out the chart below... https://inthemoneystocks.com/the-russell-2000-index-iwm-is-showing-leadership/

Nick Santiago
InTheMoneyStocks
Chief Market Strategist

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As the stock market bounces sharply over the last few days, many investors are wondering if the worst is over. The answer is likely no. This bounce is based on massive money printing as well as the hope that Trump can somehow open the economy in 14 days. That will not happen. Cases may not even have peaked in 14 days, let alone started to go lower. In fact, experts expect there to be as much of a year of social distancing required, perhaps more.

There is a worst case scenario for the S&P and investors should pay attention. The government can only print so much money and send so much in stimulus checks before it becomes insolvent. The Federal Reserve is in the same boat. The longer business suffers, the more likely corporate debt creates a major credit crisis. In fact, the Federal Reserve has already been putting out fires everywhere in the credit markets. The system has so much debt in it, from individual to corporations, all the way to governments, it may totally collapse in  the worst case scenario for the S&P.

If this happens, at a minimum the S&P (SPY) will trade down to its 2007 highs. This 2007 high was a double top from the 2000 high. Resistance (double top) now becomes epic support. The price point at this key level is $155.00 on the SPY (tracking ETF for the S&P). That means from the current level, there is as much as another 47% downside in the market.

However, there is AMAZING news. Swing traders like us will make fortunes during the ups/downs of these moves. Just like I made a killing over the last month, there will be at least a year of insanity to bank millions on. The key is to be nimble, quick and buy key levels, and sell into resistance. Learn and profit. That is the way to turn this epic collapse into a defining moment in your financial career.

Check out the chart below... https://inthemoneystocks.com/here-is-the-worst-case-scenario-for-the-sp/

Gareth Soloway
InTheMoneyStocks
Chief Market Strategist

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Investors need to trade the charts. If you can shut down emotion and just trade the charts you can profit in bull and bear markets. Emotion is the great profit killer. To put it to use, let’s look at the current S&P tracking ETF (SPY). We are currently attacking the $263.00, the same highs we knocked up against a week-plus ago. The last time the S&P traded into this level, it failed. This tells investors and traders that if the $SPY can close above $263.00, it will have broken out. The upside is likely to $274.00 as a minimum, this is a key gap fill. I even think the SPY could push through to the 50% Fibonacci retrace level at $280.00.

By using the charts, you can position your portfolio for these monster moves that will likely take place in just days. The gains that members have seen just compound how key using the charts are. Trade the charts and profit for life.

See the chart here: https://inthemoneystocks.com/trade-the-charts-sp-500-attacking-key-level/

Gareth Soloway
InTheMoneyStocks
Chief Market Strategist

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( i can be more specific than that - don't think the Close OVER 263 gives an sign of the rally continuing):

STALL COMING here?  And a slide down to a retest the Lows coming?

SPY fell by 35.7%, 120.82 points, from 218.26 to 339.08

Rally of 38.12% of that drop ... 120.82 x.3812= 46.05 pt./ + L-218.26 = SPY 264.31

Yesterday we saw: 264.86 +16.67, +6.72%.  No gtees, of course !

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VIX is 47% off its Yr.High of 85.47/ Last: 45.24 -1.56, -3.33%

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===

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