March 26, 2019
Mark Newton CMT, Newton Advisors, LLC
SPX Cash Index
Support: 2812-7, 2797-8, 2785
Resistance: 2829-30, 2846-8, 2860-2
Thanks for your recent patience (From most of you) I spent 5 days in China and Hong Kong and got home about an hour ago, after 15 hours of flight-time. My apologies on lack of timely notes. Having a VPN connection there (with China blocking Google) doesn't even guarantee that one can get a good connection !! But a fantastic trip, and good to be back. Today we'll address this morning's activity and service should be fine for Daily notes going forward, with Videos sent to Blog and to Private Twitter. Today's video is included given that i'm putting out a mid-day report.
Tuesday Technical Video
CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19
Replay Link-Thursday 3/14/19 Technical Webinar
SPX - (3-5 Days)- Bullish, Expect a rally to test and exceed 2860 before markets peak in early April. Under 2785 (SPX cash ) would postpone
EuroSTOXX 50- Bullish- Expect rallies into early April, but the break of the uptrend is a negative and rallies should be sold into late week. Under 3281 turns trend bearish
HSCEI- Minor bearish expecting former 11151 lows hold and allow for rally back to 11550-11600
Trading Longs: COP, DVN, CXO, XOP, USO, TSCO, LOW, HD, WYNN, DRI, AAP, DHR, HUM, AGN, CI, ALGN, BAC, GS, LNC, WFC, FLT, ISRG, DXCM, PCAR, GDDY
Trading Shorts: MHK, TRIP, BBBY, OSTK, WATT, BWA, CE, EXPE
Today's snapback higher on the heels of yesterday's strong close after early weakness is a positive if this can hold above today's open. Tuesday closes above 2812.66 should allow for further gains in the days ahead with a challenge of 2860 likely
Energy is leading all sectors while Healthcare and Technology are both showing gains of nearly 1%. Breadth is higher today by more than 3/1 and the movement in Crude oil should be noted, as this has now gotten back up above 60 and a bullish development.
Long XLY with targets at 118 and stops at 111.25
XOP- Crude's advance should lead XOP higher to near 32.50 -Stops under 29.75
Long FAANG stocks- NY FANG index likely to move to 2700-2750 before any stalling out
Long TLT- Target 126.50 Stops raised to 124
Additional charts and thoughts below.
Today's snapback is encouraging that prices likely will revisit prior highs and finish out the Demark exhasution counts before any reversal lower occurs. Prices managed to hold right where they needed to, as discussed in Monday's Weekly Technical Perspective, and the combination of yesterday's snapback to make a bullish close along with today's gains is a positive. Only on a close back down under Monday's lows would this change, which is at 2785. Until/unless that happens, it's right to lean long and expect a retest of highs.
Technology in particular is up nearly 1% the 3rd best performing sector today. Similar to SPX, i expect a test of highs in the S&P 500 Information Technology index, and in this case, there is substantial resistance just above that likely holds prices into April and causes a stallout. Thislevel has held going back since last August/September, so this has some importance. Look to sell gains into this area by late this week/early next.
Crude oils's gains have now risen back above $60 in WTI and should be able to exceed last week's 60.39 intra-day high which would help to drive a rally back to the mid-60's. Overall, Energy should be overweighted, and specifically, stocks like COP, DVN, HES, CXO look quite positive for further gains.