Recap for Tuesday, May 15
Analysis from QuickTakesPro founder and Barron’s columnist Michael Kahn, CMT:
S&P 500 (SPX) – at the time of this broadcast, SPX was near 1342, up about 3 points from Monday. The neckline pattern that formed from the head and shoulder pattern on the SPX is broken to the downside. Also, the 50-day moving average has broken down. The support level of 1352 has been broken within today’s trading day, will be interesting to see if stays broken at the close. The MACD (Momentum) is also negative for the SPX.
VIX – at the time of this broadcast, VIX was around 21 down about a point on the day. VIX had been trading between the 50 day and 100 day moving average for weeks now, which is 17.38 and 18.49 respectively. It also broke hard out of this range when the SPX broke through the trendline that Michael mentioned. The jump to the 21-22 level has sustained since. The VIX futures for June and July are anticipating that these levels are here to stay through most of the summer or at least until some of the uncertainty within the Euro-zone gets cleared up.
Quick Takes Pro “Chart of the Day” – Visa (V)
Visa (V) at the time of this broadcast was 117.45 up 0.73 on the day. It is below its 50-day moving average of 119.01. It recently has tested what appears to be a support level a few times in the previous sessions at approximately 115.60. A trendline below that may also prove to be a support level at the 108.50 mark. The MACD is also negative for V. If V breaks down through current support level of 115.60, we could see it dip all the way to 108.50 because that is where it was before the jump in the stock back in February. Stock is looking kind of weak right now.
Macy’s (M) is a related stock to Visa. It too has broken down through it’s 50-day moving average, has negative momentum and is a consumer stock. At first glance Macy’s chart is very similar to Visa’s except the pattern has already broken to the downside and this may be an indication as to what is next for Visa.