The Dow 30 Industrials Index (DJI) closed today at $18,582 We have the next major price support level at $15,382. This represents approximately 53% of the Dow from the High of $29,568.57 back in February.
As the ongoing global financial markets continue to sell off, we can see, in the bottom panel of the stockchart below, that the relative strength of gold ETF (GLD) is way stronger than the S&P 500 Index ETF (SPY), over a 63 trading day average. On an absolute basis, gold is down Month over Month, but today it is beginning to rally. Next, we’ll look for higher weekly closing highs.
The Index is trading below the December 2018 Low of $21,713. Without a bounce we’ll be looking for lower prices.
The S&P 500 Index (SPX) today is headed down to test the support level of $2,856. We’ll see what happens then.
The Nasdaq 100 Index (NDX), today, has regained it’s long term Upward trend status. The Index has crossed the trend filter from below to above the 20% annualized rate of growth (CAGR) over a 200 day moving average. This trendinvesting method is for long term trading or investing. A trendinvestor, to smooth out ‘noise’, now will likely will use a channel breakout, or a Weekly close over last weeks’ High, to trigger an actual “Buy”. The stockchart below shows the indication. The S&P 500 Index (SPX) has not yet crossed above the trend filter.
We can see on the stockcharts bellow, there was ample advance warning as to the viability of airlines as an investment: 1) the Relative Strength of The Airlines Index (XAL) to the S&P 500 Index (SPX), crossed below, on a 200 day average, on December 27th, 2019. 2) The Airlines Index (XAL), was barely maintaining trend prior to the market crash this month. It broke below trend on February 18th., as shown on the stockchart below. Trend as defined as maintaining an annualized rate of growth over a 200 day average, of at least 20%.
Chart of the Airlines Index (XAL) relative to the S&P 500 Index, over 200 days:
Chart of the Airlines Index (XAL) relative to the trend of 20% annualized over 200 days:
At the end of the trading session today, we can see that The Dow 30 Index (DJI) has been slicing through support levels like a chain saw through Jello®. On the stock chart below, looking at Monthly look-backs, we can see the next major support is is approximately $21,713., .. the area of the sell off December 2018. So if this takes all Spring and Summer to resolve, we wouldn’t be surprised.
The S&P 500 Index (SPX) today, after the close, continued in “CRASH MODE” selling, breaking major long term support of $3025, as shown in the stock chart below.
Quote of the day: “Bottom fishing is the most expensive sport in the world” – Scott Minerd.
Carnival Cruise (CCL) looking back 3 years., at relative strength versus The S&P 500 Index (SPX), it unperformed starting in 2017… using a 200 day moving average of relative strength.
Carnival Cruise Lines (CCL) looking at the past year, issued numerous price reversals, in advance of the virus problem. The theory of the black Swan was debunked years ago.