The Closing Print live trading and financial blog during market hours.

We’re looking for a dead cat bounce this week after the S&P 500 registered a 5% drawdown to start the week. Investors sold high flying technology stocks over the news of increasing Coronavirus cases. That said, many stocks are rebounding this morning, with the “FAANNG” stocks set to open above VWAP to start the day.

What are our expectations today? Thanks to Charlie Bilello we have a graphic that supports our thoughts for a dead cat bounce.

Click to enlarge

Some investors will most likely take a few positions off into strength. We were doing that over the past few weeks while taking fewer swing positions. We prefer day trades at this time, due to heightened fear, elevated VIX and safety trade concerns reflected in gold and the USD.

Most mutual funds that track the S&P 500 performed similarly with SPY dipping 5.26% at Monday’s low. Momentum is still with the bears with MACD dropping rapidly with price action. RSI is approaching oversold levels as well, so a bounce would be normal.

Click to enlarge

SPY 320 (+/-) should hold today, given the looks of S&P futures in early trading. At one point last night, S&P was +30 handles, currently +18.

If for some reason fear returns, 61.8% Fibonacci and previous consolidation support is the next level to watch. A SPY pullback to 307.00 (+/-) equates to a drawdown of (-9.46%).

We are not touching our retirement account. We remain at 44% fixed assets, 45% equities, with the remaining 11% in cash and alternative investments managed by Cohen and Steers (CNS) Asset Group.

Finally, do remember the last major drawdown of late 2018. Even with a 20% shellacking, the markets rebounded shortly thereafter.

Click to enlarge

While we do not anticipate a similar occurrence, we would reassess would the situation warrant reallocation of funds in our mix of investments in the coming weeks.

Join us today in the trading room for our LIVESTREAM broadcast

during market hours, as we navigate the current environment. Watch, listen and trade from 9:20 AM to 4:15 PM Monday through Friday.

Happy Trading,


Want to become a member? Check details here:

Disclaimer:  Do your Own Research

Our content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional investment advisor in connection with, or independently research and verify, any information that you find on our Website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. Trades and or positions listed and taken from the watchlist are my own and should not be considered “advice” to enter any particular position or asset.

Investment Warnings

We would like to draw your attention to the following important investment warnings. The value of shares and investments and the income derived from them can go down as well as up; Investors may not get back the amount they invested – losing one’s shirt is a real risk; past performance is not a guide to future performance.

Live Sessions

Live broadcasts are educational in their content. Proper risk management is considered on every trade or asset mentioned. 

*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities. 

As always, the use of technical and fundamental analysis is encouraged in order to fine-tune entry and exit points to average seasonal trends. 

These mentions are stocks that we may or may not decide to trade as outlined in the watchlist. Always use a stop.