Signals & Trading Plan for Tuesday 2/18/20

Market Expecting More Easy Money
The current rise in stocks is mostly fueled by easy money from the Fed.  The Fed, however, is engaged in some interesting maneuvers, taking money out of the system with the right hand, and putting it back in with the left hand.  The net result still appears to be increased liquidity.   This is most evident in market breadth.   It is climbing to higher highs most days for NYSE stocks.  

Furthermore, traders are expecting the Fed to come to the rescue when the economic impact of the coronavirus is realized.  Imagine how the market will react if the Fed suddenly decides that the situation doesn’t warrant a rate cut. Corona tantrum!

Keep this situation in mind as we discuss the long-term and short-term portfolios below.

The full article covers:
Market Internal Indicators

• Volatility & complacency
• Market breadth
• Level of bullishness
• Overbought / oversold levels
• Bullish / bearish divergence

Short-term Support & Resistance Levels

• For $SPX $NDX $RUT SPY QQQ TQQQ

Market Projections and Trading Plan

• For long-term portfolio
• For short-term trades

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