Mid-Week Commentary for 1/9/2019

WEEKLY MARKET ANALYSIS

Stocks opened modestly higher but the advance reversed and accelerated during the day into the close. The Dow Jones Industrial Average ETF DIA was down 0 points on the day and closed at 238. For the S&P 500, there is support near 2535 and 2502. Resistance levels are currently at 2599 and 2632.

GLOBAL ASSETS UPDATE

TWELVE SECTOR ANALYSIS

VOLATILITY UPDATE

On Wall Street, 9 of the 12 major market sectors are seeing green today. The biggest gainers are Consumer Staples (XLP), Real Estate (XLRE), and Utilities (XLU). The weakest sector today has been Financial (XLF) which has declined -1.0%.

The CBOE Volatility Index (VIX) is down $-0.49 going from $20.96 to $20.47 today. Call volumes are above average today but Put volumes are lower than average. The ratio of puts to calls for the current at-the-money strike of $21 is below average which means that traders are favoring Calls over Puts currently.

MARKET HEAT

A NASDAQ stock with unusually high volume today is Nektar Therapeutics (NKTR). On the AMEX VirnetX Holding Corporation (VHC) has had significant interest, and on the NYSE Maxar Technologies Ltd (MAXR) has had unusual volume.

The biggest mover out of other high-volume stocks is VirnetX Holding Corporation (VHC) which has moved up over 65% recently on volume of over 7 million shares. The chart below shows the performance of VHC over the last year. VirnetX Holding Corporation is an Internet security software and technology Company with a technology for secure communications, including fourth-generation (4G) long term evolution (LTE) security.

DARWIN VIRNETX HOLDING CORPORATION FORECAST

The performance of VirnetX Holding Corporation (VHC) will be worth watching in the near term for a number of reasons. The forecast for the coming week on VHC is for the price to go down. The correlation of VHC to the S&P 500 recently has been 0.7 which is a moderate positive correlation. The key level to watch for VHC is downside support at the $3 price point.

Trade smart,

Paul "Bulldog" Hudson, Chief Investment Officer
Darwin Investing Network