Can Tech Stocks Rally from Here? 4-5-2024

Toni Turner
5 Apr 202414:41

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

00:00

📈 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.

05:01

💹 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.

10:01

🏦 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

The term 'Market' refers to the economic environment where buyers and sellers interact to exchange goods, services, or financial assets. In the context of the video, it specifically pertains to the stock market, where shares of publicly traded companies are bought and sold. The speaker, Tony Turner, discusses the performance of the market, particularly focusing on stock indexes and their response to economic data such as the March jobs report.

💡S&P 500

The S&P 500, or Standard & Poor's 500, is a stock market index that measures the performance of 500 large companies listed on stock exchanges in the United States. It is widely considered the best representation of the U.S. stock market and is used as a benchmark by many investors. In the video, the S&P 500 is referenced through the SPY ETF, which closely tracks the index.

💡Unemployment Rate

The 'Unemployment Rate' is a key economic indicator that represents the percentage of the labor force that is unemployed and actively seeking work. A lower unemployment rate typically signals a healthier economy, while a higher rate may indicate economic slowdown. In the video, the speaker discusses how the unemployment rate compared to expectations can influence the stock market.

💡Federal Reserve

The 'Federal Reserve', often referred to as the Fed, is the central banking system of the United States, responsible for implementing monetary policy to promote economic stability. The Fed's decisions on interest rates can significantly affect financial markets, including stock prices. In the video, the speaker mentions the Fed in the context of interest rate cuts and their potential impact on the stock market.

💡Moving Averages

Moving averages are technical analysis tools used to smooth out price data and identify trends by creating a constantly updated average price. In the video, the speaker references the 20-day, 50-day, and 200-day moving averages to analyze the trends of the S&P 500, NASDAQ 100, and Utilities sectors.

💡Investco QQQ

Investco QQQ, also known as the QQQ, is an exchange-traded fund (ETF) that tracks the NASDAQ 100 Index, which consists of the 100 largest non-financial companies listed on the NASDAQ stock market. These companies are typically technology and growth-oriented stocks. The QQQ is used by investors to gain exposure to the technology sector and is one of the largest ETFs by assets under management.

💡Earnings Season

Earnings season refers to the period when publicly traded companies release their financial results for a given quarter. This is a critical time for investors as the reported earnings can significantly influence stock prices and market sentiment. Companies that exceed expectations often see their stock prices rise, while those that fall short may experience a decline.

💡Sector Spider Utilities ETF

The Sector Spider Utilities ETF, symbol XLU, is an exchange-traded fund that tracks the utility sector of the S&P 500 Index. It includes companies that provide essential services such as electricity, natural gas, and water. Investors often view utility stocks as defensive plays due to their typically stable earnings and dividends, especially during times of market volatility.

💡Uptrend

An 'uptrend' in financial markets refers to a period when the price of a security is consistently rising, forming higher lows and higher highs. It indicates a positive market sentiment and is typically associated with a bull market. The video analyzes whether the S&P 500 and other indexes are maintaining an uptrend based on their price movements and interactions with moving averages.

💡Support and Resistance Levels

Support and resistance levels are price points in a financial chart that have historically shown a tendency to reverse or halt a price trend. Support is a price level where a downtrend may pause due to sufficient demand, while resistance is a level where an uptrend may slow due to increased supply. These levels are important for traders and investors to identify potential entry and exit points for trades.

💡Trading Portfolio

A 'trading portfolio' refers to the collection of financial instruments that an individual trader or investor holds for the purpose of managing risk and pursuing investment goals. It can include a variety of assets such as stocks, ETFs, options, and other securities. The video discusses adding positions to a trading portfolio based on market conditions and specific investment strategies.

💡Online Training Programs

Online training programs are structured courses delivered over the internet that aim to educate individuals on specific skills or knowledge areas. In the context of the video, these programs are focused on improving trading skills and understanding of financial markets. Tony Turner promotes his own training programs as a resource for viewers to enhance their trading abilities.

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.

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