Monday Market Moves Show Promise, Caution

2020-04-27 | Simpler Trading Team

Markets opened positive and continued an upward grind to close out Monday on signs of hope in the face of the pandemic.

News of state economies reopening and coronavirus vaccine advances spurred the Dow to rise 358.51 points. The Nasdaq and S&P climbed 95.64 points and 41.74 points, respectively.

Oil, on the other hand, was hammered due to increasing storage limitations. Crude dropped more than 24 percent and a recovery may not be on the near horizon.

Despite internals showing a downward inclination since last week, it made sense not to fight Monday’s upward move across the board.

Simpler Trading tapped into promising trade setups to establish a plan for this week. The current play is to take what the market offers while looking ahead with caution.

There are continued warnings that the economy could contract as much as 30 percent in the second quarter. A potential reversal toward March lows in the next few months is a strong possibility to consider.

Despite the overall positive move Monday, key sectors like tech and other S&P leaders have struggled over the last few months.

It’s been a fickle and unpredictable market since the pandemic shutdown, and traders are having to adjust to shorter time frames for trade setups. Buy it and hold it may not be viable for some time.

Follow the market as it’s moving, but be alert to the potential for significant volatility.

We Saw: a positive move to open the week — 

  • Oil continuing to get hit with low outlook
  • Questions about tech sector holding its own
  • Data showing key S&P leaders struggling for months

We’re Watching: … for what the market gives —

  • How to trade with the market short term
  • Internals to indicate any sudden reversal to lows
  • Like everybody, news of reopening economies and a vaccine

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