Is The Coronavirus Fueling The Stocks’ Rally?

February 10, 2020

Mish's Daily

By Geoff Bysshe

Big cap stocks pushed the market higher today without any real notable catalyst.

Big cap stock indexes seem willing to rise so long as there isn’t a compelling reason for them to fall.

This type of price is usually associated with the dangerous condition of investor complacency.

The VXX however, did not break last week's lows and remains well off its January lows.

So is the market climbing a wall of worry ‘fueled’ by the coronavirus?

The unknown path to a resolution to the coronavirus could very well serve as a wall of worry that markets like to climb.

However, don’t mistake that for the market’s dismissing the situation as ‘transitory’ and no longer a concern.

In our Complete Trader system, we use the 10-day moving average as a good short-term directional trend measure. Above it is bullish, below it is bearish.

Of course, there’s more to defining at trade than just being above or below the average, but for now, as long as the markets stay over their 10-day moving averages it will be easier to trade on the long side than the short side.

Don’t let any upside surprise you.

Today's commentary was written by Geoff Bysshe

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S&P 500 (SPY) Closed at new all-time highs. 330 is pivotal with support at 327.87 

Russell 2000 (IWM) Sitting on the 50-DMA at 164.68. Prior daily high resistance at 166.36 then gap to 166.76.  If breaks today’s low, 164 area is next support.

Dow (DIA) 294.14 the all-time high and 289 underlying support

Nasdaq (QQQ) Strong move to new. Must hold 228.

KRE (Regional Banks) Sitting on 10-DMA. Needs to get back over 56.

SMH (Semiconductors) Sitting on 10-DMA, but needs to clear 147.  141 next support

IYT (Transportation) Compressing. 193.48-197.30 is the range to watch

IBB (Biotechnology) 119.90 support and still one of the better looking sectors right now

XRT (Retail) Watch that low 42.90 to hold and if can get back over 44.05 and hold, better

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