Can Tech Stocks Rally from Here? 4-5-2024
TLDRIn his market analysis, Tony Turner discusses the positive performance of Wall Street's main stock indexes, attributing the rise to stronger than expected March jobs data. He examines the S&P 500, Invesco QQQ, and the Utilities ETF (XLU), highlighting their movements in relation to key moving averages and their potential as investment opportunities. Turner also mentions his online training programs for traders interested in enhancing their skills.
Takeaways
- 📈 The major U.S. stock indexes rose after stronger than expected March jobs data indicated resilience in the labor market.
- 🧍 The unemployment rate stood at 3.8%, lower than the expected 3.9%.
- 💹 Average wages earned rose 3% on a monthly basis, in line with estimates.
- 📊 The S&P 500 ETF (SPY) closed near its 20-day moving average, just below the all-time closing high.
- 📈 SPY has been in a picture-perfect uptrend since its October intraday lows.
- 🔄 The 20-day, 50-day, and 200-day moving averages acted as support for SPY's upward movement.
- 📉 SPY broke the 20-day moving average for the first time in about 6 months but bounced back up.
- 💻 The Invesco QQQ ETF, which tracks the NASDAQ 100, closed just below its 20-day moving average and on top of its 50-day moving average.
- 📊 The QQQ had substantial volume in the last few weeks and its moving averages are closing in on each other, indicating potential price movement.
- 🔌 The Sector Spider Utilities ETF (XLU) is of interest due to its potential as a safer investment in case of a market slowdown.
- 🛒 Tony Turner plans to add a position in XLU if it stays above the 250-day moving average and considers adding more if it rises above $67.
Q & A
What was the main reason for the rise in Wall Street's main stock indexes on the day the transcript was recorded?
-The main reason for the rise in Wall Street's main stock indexes was the stronger than expected March jobs data, which indicated resilience in the labor market.
What was the unemployment rate announced on the day of the transcript, and how did it compare to expectations?
-The unemployment rate announced was 3.8%, compared to expectations that it would remain steady at 3.9%.
How did average wages perform in March according to the transcript?
-Average wages earned rose 3% on a monthly basis, which was in line with estimates.
What is the significance of the S&P 500 ETF (SPY) trading close to its 20-day moving average?
-The significance of the SPY trading close to its 20-day moving average is that it indicates the short-term trend of the ETF. Being close to this average suggests that the ETF's price is maintaining its recent upward momentum.
What was the SPY's intraday low in October, and how did this affect its subsequent performance?
-The SPY's intraday low in October was around $49. This low point was followed by a bounce back up when it seemed like interest rates were going to move down, leading to a quick rise in the SPY's value and the start of an uptrend.
What does the Invesco QQQ ETF track, and why is it significant?
-The Invesco QQQ ETF tracks the NASDAQ 100, which includes the top 100 non-financial stocks in the NASDAQ stock market. It is significant because it provides exposure to momentum stocks and large-cap tech companies like Nvidia, Meta, and Microsoft.
How did the QQQ perform relative to its 20-day and 50-day moving averages in the period covered in the transcript?
-The QQQ closed just below the 20-day moving average and on top of its 50-day moving average. There was concern about the 20-day moving average potentially crossing below the 50-day, which would indicate a bearish signal.
What is the importance of the XLU (Utilities ETF) in the context of the market discussed in the transcript?
-The XLU is important as it represents an area of the market that traders may turn to if there is a slowdown or a pullback. Utility stocks, which typically offer good dividends, can be a safe haven when interest rates are expected to decrease.
What was the Tony Turner's strategy for the XLU based on the script?
-Tony Turner planned to add a small position to his trading portfolio if the XLU stayed above its 250-day moving average, with a stop at $62.25. He also intended to add to his position if the XLU rose above $67, using a trailing stop.
What did Tony Turner suggest for viewers to improve their trading skills?
-Tony Turner suggested viewers check out his online training programs, which include courses like 'Seven Steps to Successful Trading', 'How to Swing Trade Successfully', and 'Trade the Trend of Profits'. These programs aim to help traders learn how to trade more profitably.
What was the price level at which Tony Turner considered adding to his XLU position?
-Tony Turner considered adding to his XLU position if and when it could rise above $67.
What was the date of the transcript recording?
-The transcript was recorded on Friday, April 5th.
Outlines
📈 Market Analysis with Tony Turner
In this segment, Tony Turner discusses the performance of Wall Street's main stock indexes after stronger than expected March jobs data. The unemployment rate stood at 3.8%, slightly lower than expected, and average wages earned rose 3% monthly. Tony reviews the S&P 500, symbolizing the market's resilience and its trading pattern, noting the significance of the 20-day, 50-day, and 200-day moving averages. He highlights the importance of the S&P 500 ETF (SPY) staying above the 20-day moving average to maintain an uptrend and expresses cautious optimism about the market's trajectory.
💹 QQQ Performance and Earnings Season Outlook
Tony Turner shifts focus to the Invesco QQQ, an ETF tracking the NASDAQ 100, emphasizing momentum stocks like Nvidia, Meta, and Microsoft. He notes the QQQ's position relative to its moving averages and the implications of these averages converging. Tony discusses the QQQ's October lows and its subsequent recovery, pointing out the ETF's volatility compared to broader market groups. As first-quarter earnings season approaches, he advises keeping a close eye on the QQQ, emphasizing the 50-day moving average as a key support level.
🏦 XLU Movements and Interest Rate Impact
In the final segment, Tony Turner examines the Sector Spider Utilities ETF (XLU), which includes major holdings like NextEra Energy and Southern Company. He describes the XLU's quick double bottom in October and its early upward movement compared to other indexes when interest rates seemed to be lowering. Tony outlines the significance of utilities as a safe haven for traders due to their dividends, especially when interest rates decrease. He provides a detailed analysis of the XLU's performance, focusing on its 20-day, 50-day, and 200-day moving averages. Tony concludes with a personal strategy for trading the XLU, considering its potential rise above past highs and his intention to add it to his trading portfolio.
Mindmap
Keywords
💡Market
💡S&P 500
💡Unemployment Rate
💡Federal Reserve
💡Moving Averages
💡Investco QQQ
💡Earnings Season
💡Sector Spider Utilities ETF
💡Uptrend
💡Support and Resistance Levels
💡Trading Portfolio
💡Online Training Programs
Highlights
Wall Street's main stock indexes rose after stronger than expected March jobs data.
The unemployment rate stood at 3.8%, lower than the expected 3.9%.
Average wages earned rose 3% on a monthly basis, in line with estimates.
The S&P 500 ETF (SPY) closed near its 20-day moving average, showing resilience in the market.
SPY has been in a picture-perfect uptrend since its October intraday lows.
The 20-day moving average acted as a strong support for SPY's price movement.
SPY broke the 20-day moving average for the first time in about 6 months but bounced back up.
The Invesco QQQ ETF, which follows the NASDAQ 100, had its October lows and has since shown a strong upward movement.
QQQ's 20-day moving average is converging with its 50-day, which could indicate a potential downward trend if they cross.
Big cap tech stocks, represented by QQQ, are typically more volatile than other market groups.
The Utilities ETF (XLU) is often a safe haven for traders during market downturns due to its high dividend yields.
XLU showed a quick double bottom in October and has since rebounded.
Tony Turner is considering adding a position in XLU to his trading portfolio if it stays above its 250-day moving average.
Tony Turner offers online trading training programs for traders looking to improve their skills.
The market's upward trend is expected to continue, with a focus on maintaining the uptrend for SPY and QQQ.
The coming week will be crucial for the market, with an emphasis on the performance of SPY, QQQ, and XLU.