{"id":6134,"date":"2020-01-30T10:48:14","date_gmt":"2020-01-30T15:48:14","guid":{"rendered":"https:\/\/morpheustrading.com\/blog\/?p=6134"},"modified":"2022-04-06T15:04:57","modified_gmt":"2022-04-06T19:04:57","slug":"01-30-20-stock-update","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/01-30-20-stock-update\/","title":{"rendered":"Market Update: Where are Stocks Headed Next?"},"content":{"rendered":"<figure id=\"attachment_6156\" aria-describedby=\"caption-attachment-6156\" style=\"width: 900px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/app.hedgeye.com\/insights\/56238-cartoon-of-the-day-the-market-seesaw?type=cartoons\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-6156\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2020\/01\/Bear_bull_teeter_totter_12.27.2016.png\" alt=\"\" width=\"900\" height=\"506\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/01\/Bear_bull_teeter_totter_12.27.2016-110x62.png 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/01\/Bear_bull_teeter_totter_12.27.2016-300x169.png 300w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/01\/Bear_bull_teeter_totter_12.27.2016-768x432.png 768w\" sizes=\"auto, (max-width: 900px) 100vw, 900px\" \/><\/a><figcaption id=\"caption-attachment-6156\" class=\"wp-caption-text\">Source: Hedgeye.com<\/figcaption><\/figure>\n<h1>The major stock indices roared into the new year at fresh all-time highs, but have since entered into a short-term pullback that began January 24.<\/h1>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/01-30-20-stock-update\/#Check_out_our_%E2%80%9Cno_nonsense%E2%80%9D_market_analysis_here_to_see_where_stocks_may_be_headed_next\" >Check out our &#8220;no nonsense&#8221; market analysis here to see where stocks may be headed next.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/01-30-20-stock-update\/#Nasdaq_100_ETF_QQQ\" >Nasdaq 100 ETF ($QQQ)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/01-30-20-stock-update\/#Small-cap_Russell_2000_ETF_IWM\" >Small-cap Russell 2000 ETF ($IWM)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/morpheustrading.com\/blog\/01-30-20-stock-update\/#Apple_AAPL\" >Apple ($AAPL)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/morpheustrading.com\/blog\/01-30-20-stock-update\/#Whats_On_Todays_Watchlist\" >What&#8217;s On Today&#8217;s Watchlist?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/morpheustrading.com\/blog\/01-30-20-stock-update\/#Atlassian_TEAM\" >Atlassian ($TEAM)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/morpheustrading.com\/blog\/01-30-20-stock-update\/#Anaplan_PLAN\" >Anaplan ($PLAN)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/morpheustrading.com\/blog\/01-30-20-stock-update\/#Everquote_EVER\" >Everquote ($EVER)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/morpheustrading.com\/blog\/01-30-20-stock-update\/#Protecting_Gains_from_the_Sidelines\" >Protecting Gains from the Sidelines<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Check_out_our_%E2%80%9Cno_nonsense%E2%80%9D_market_analysis_here_to_see_where_stocks_may_be_headed_next\"><\/span>Check out our &#8220;no nonsense&#8221; market analysis here to see where stocks may be headed next.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<hr \/>\n<p><em>Editor&#8217;s Note: The following commentary and charts appeared in the January 29 issue of <a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener noreferrer\">The Wagner Daily<\/a>. Enjoy this complimentary &#8220;sneak peak&#8221; here on the Morpheus blog.<\/em><\/p>\n<hr \/>\n<h2><span class=\"ez-toc-section\" id=\"Nasdaq_100_ETF_QQQ\"><\/span>Nasdaq 100 ETF ($QQQ)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When stocks bounced back from their pullback lows on January 28, the move was led by a 1.6% gain in the tech-heavy Nasdaq 100 Index ($QQQ).<\/p>\n<p>$QQQ rallied into resistance of both its 10-day moving average <em>and<\/em> the low of the bearish engulfing candle from January 24.<\/p>\n<p>This convergence represents an <em>obvious area of short-term resistance.<\/em><\/p>\n<p>However, if enough investors believe the recent selloff is the beginning of a new bear market, then $QQQ could make another run to test its prior highs.<\/p>\n<p>Ideally, we&#8217;d love to see a few weeks of chop to produce new buy setups:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2019\/200129QQQ.png\" alt=\"$QQQ daily\" title=\"\"><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Small-cap_Russell_2000_ETF_IWM\"><\/span>Small-cap Russell 2000 ETF ($IWM)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The small-cap Russell 2000 ETF ($IWM) showed relative weakness by lagging behind both the S&amp;P 500 and Nasdaq Composite during the last rally.<\/p>\n<p>As such, $IWM is already testing key support of its rising 50-day moving average.<\/p>\n<p>The first test of the 50-day MA in a new uptrend is generally a reliable area of support that attracts mutual funds, hedge funds, and other institutional investors.<\/p>\n<p>Short-term resistance is found at both the 5 and 10-day moving averages, both of which are above the current price of $IWM:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2019\/200129IWM.png\" alt=\"$IWM daily\" title=\"\"><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Apple_AAPL\"><\/span>Apple ($AAPL)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Since Apple was a market leader during the previous rally, it is definitely worth monitoring as a leading indicator for the broad market&#8217;s next move.<\/p>\n<p>When leading stocks start to fizzle out and are not quickly replaced with new market leadership, that&#8217;s typically a bearish sign for the broad market.<\/p>\n<p>If $AAPL manages to hold above its 10-day MA and sets a new high, then $QQQ could follow:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2019\/200129AAPL.png\" alt=\"$AAPL daily\" title=\"\"><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Whats_On_Todays_Watchlist\"><\/span>What&#8217;s On Today&#8217;s Watchlist?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Our daily Watchlist that shows the exact entry, stop, and target prices of each new trade setup is restricted to <strong><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener noreferrer\"><em>Wagner Daily<\/em><\/a><\/strong> subscribers.<\/p>\n<p>However, given the extent of the recent rally, there are <em>currently<\/em> <em>not many low-risk trade setups <\/em>out there.<\/p>\n<p>Most stocks on our internal watchlist are extended near their highs and will likely need a healthy market to move significantly higher.<\/p>\n<p>Three such examples of these stocks are: Atlassian ($TEAM), Anaplan ($PLAN), and Everquote ($EVER).<\/p>\n<p>Although the charts look good, these stocks will probably only chop around (at best) <em>if<\/em> overall market conditions continue to weaken:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Atlassian_TEAM\"><\/span>Atlassian ($TEAM)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2019\/200129TEAM.png\" alt=\"$TEAM daily\" title=\"\"><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Anaplan_PLAN\"><\/span>Anaplan ($PLAN)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2019\/200129PLAN.png\" alt=\"$PLAN daily\" title=\"\"><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Everquote_EVER\"><\/span>Everquote ($EVER)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2019\/200129EVER.png\" alt=\"$EVER daily\" title=\"\"><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Protecting_Gains_from_the_Sidelines\"><\/span>Protecting Gains from the Sidelines<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>After recently locking in some big gains on <a href=\"https:\/\/new.morpheustrading.com\/blog\/breakouts-2020-ddog-snap\/\" target=\"_blank\" rel=\"noopener noreferrer\">winners such as $SNAP<\/a>, we are now laying low with regard to new trade entries.<\/p>\n<p>Our current overall game plan remains the same&#8211;we are content to hold current open positions (below), while waiting for conditions to improve and new trade setups to emerge.<\/p>\n<p>We are also focused on carefully <a href=\"https:\/\/new.morpheustrading.com\/blog\/how-manage-winning-trades\/\" target=\"_blank\" rel=\"noopener noreferrer\">managing existing winning positions<\/a>, such as our +17% gain in $SE, to lock in profits in case of further market weakness:<\/p>\n<p><img decoding=\"async\" title=\"todays watchlist\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2019\/200129open.png\" alt=\"$open positions\"\/><\/p>\n<p>We are <strong>not comfortable adding new exposure<\/strong> to our model portfolio now, although that <em>could<\/em> change within the next few days.<\/p>\n<p>Keep in mind the meat of earnings season is approaching. With it, be prepared for the usual surprises that fuel increased daily market volatility.<\/p>\n<p>Above all, remember to always <em>trade what you see, not what you think!<\/em><\/p>\n<p>Good trading to you!<\/p>\n<p>Deron<\/p>\n<p><span style=\"font-size: 10px;\">DISCLAIMER: Past results are not necessarily indicative of future results. There is a high degree of risk for substantial losses in trading securities. All data and material on this website and\/or electronically delivered to individuals is for informational purposes only, and should not be construed as an offer or solicitation of an offer to buy or sell any securities.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The major stock indices roared into the new year at fresh all-time highs, but have since entered into a short-term pullback that began January 24. Check out our &#8220;no nonsense&#8221; market analysis here to see where stocks may be headed next. Editor&#8217;s Note: The following commentary and charts appeared in the January 29 issue of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[3],"tags":[],"class_list":["post-6134","post","type-post","status-publish","format-standard","hentry","category-stock-trading-strategy"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/6134","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=6134"}],"version-history":[{"count":13,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/6134\/revisions"}],"predecessor-version":[{"id":11176,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/6134\/revisions\/11176"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=6134"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=6134"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=6134"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}