Amidst Global Turmoil, U.S. Markets Show Resilience

Major indices rose by about 1% on Friday after a shaky week and look to continue their rise today as U.S. labor reports for May provided optimism for investors, enough to overshadow the usual geopolitical tension that seemed to bog down markets. With unemployment at an 18-year low, payroll on the rise, and a strong month for employment in May, trade tension and tariff talks could not slow down the Dow from gaining 200 points on Friday. Though these political headlines are valid concerns for investors and should continue to be monitored, the market’s resilience is once again proving itself. As we weather the volatility, I recommend traders use my Seasonal Charts, shown below, for finding optimal entry and exit target. We are approaching February highs and investors should look to sell into the market rallies.

While global trade war concerns linger with the newly implemented steel and aluminum tariffs, all three major indices look to make modest gains today. Last week, Italy’s election uncertainty and anti-establishment worries rocked global markets and sent investors into havens such as gold and bonds. This point of concern for investor faded away Thursday night as a deal was struck to form a coalition government, ending months of political unease. Still, markets are not issue-free. Uncertainty with the North Korea Summit and the possibility of a global trade war remain; however, riding off the tail end of a strong earnings season, a labor report that beat all expectations seemed to bolster American economy and the investor optimism in it. Investors should continue monitoring trade talks between the U.S. and China, which thus far have had the strongest impact on global markets.

In earnings news, Costco, Abercrombie & Fitch, and Big Lots all slumped after earnings underperformed last week while Lululemon Athletica, Ultra Beauty Co., and Zuora Inc. impressively rose after strong reports. All eyes will be on next week’s FOMC meeting where an interest rate hike will likely be implemented and the general state of economy and Fed official attitudes will be relayed.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows mostly negative signals. Today’s vector figure of +0.03% moves to -0.84% in two trading sessions, before dipping further into negative territory. Today’s predicted support and resistance levels are 2,711.90 (±7.68) and 2,734.62 (± 7.74), respectively. The predicted close for tomorrow is 2,701.51. Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.  

Highlight of a Recent Winning Trade

On May 31st, our ActiveTrader service produced a bearish recommendation to short The Goodyear Tire and Rubber Company(GT). ActiveTrader, included in all paid Tradespoon membership plans, is designed for intraday trading.

Trade Breakdown

GT opened within Entry 1 price range of $24.74 (± 0.23), moved through its Target Price of $24.49 in its first hour of trading, reaching a low of $24.24 in its third hour of trading. The Stop Loss was set at $24.99.

Tuesday Morning Buy Alert!

Our featured stock for Tuesday is  Salesforce.com Inc (CRM). CRM is showing a confident uptrend in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (B)– indicating it ranks in the top 25th percentile for accuracy for predicted support and resistance, relative to our entire data universe. Our 10-day prediction model shows positive vector figure reaching +1.52% in four trading sessions which then incrementally builds throughout the 10-day forecast. Our benchmark for vector figures is +1.00%.

*Please note: Our featured stock is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his own personal money in paid subscription services.  If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader or ActiveInvestor recommendations. If you are interested in receiving Vlad’s personal picks please click here.

The stock is trading at $131.78 at the time of publication, up 0.97% from the open with a +1.26% vector figure.

Tuesday’s prediction shows an open price of $127.77, a low of $17.19 and a high of $134.50

The predicted close for Tuesday is $131.75. Vector figures stay positive and drive upward from Friday This is a good signal for trading opportunities because we use vectors as a primary factor in determining price movements for stocks and ETF.

Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.

Note: The Vector column calculates the change of the Forecasted Average Price for next trading session relative to the average of actual prices for last trading session. The column shows expected average price movement “Up or Down”, in percent. Trend traders should trade along the predicted direction of the Vector. The higher the value of the Vector the higher its momentum.

Oil

West Texas Intermediate for July delivery (CLN8) is priced at $65.02 per barrel, down 1.23% from the open, at the time of publication. The commodity continues to rapidly fluctuate, after hitting a high of $80 per barrel last month, oil has fallen 5% so far in June. Also putting prices under pressure is last week’s U.S. Energy Information report that showed U.S. crude production continues to rise, reaching a weekly high of 10.47 barrels per day.

Looking at USO, a crude oil tracker, our 10-day prediction model shows all negative signals. The fund is trading at $13.15 at the time of publication, down 0.75% from the open. Tomorrow’s prediction sees support at $12.91 and resistance at $13.28. The predicted close for tomorrow is $12.92. Vector figures show -0.93% today, which turns -3.36% in two trading sessions.  Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.

Gold

The price for August gold (GCQ8) is down 0.12% at $1,297.80 at the time of publication. With a sliding dollar, gold made modest gains in early trading, possibly steaming from continued trade war concerns with the U.S. and China. However, the dollar has since subtly rebounded, stifling gold gains and taking both the dollar and gold for slight losses.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows all positive signals. The gold proxy is trading at $122.555, up .05% at the time of publication. Tomorrow’s predicted low is $123.42 and the predicted high is $124.25. The predicted close for tomorrow is $123.62. Vector signals show 0.26% for today, reaching 1.11% in two trading sessions. Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.  

Treasuries

Yields rose today as prices declined amidst global uncertainty regarding Chinese-U.S. tension and recently installed steel and aluminum tariffs. Bonds also seem to be recoiling from last week’s Italian scare which was resolved by week’s end. The yield on the 10-year Treasury note is up 0.66% at 2.92% at the time of publication. The yield on the 30-year Treasury note is up 0.52% from the open at 3.07%.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see mostly positive signals in our 10-day prediction window. Today’s vector of 0.32% moves to -0.25% in tomorrow before returning to positive territory the following day. The ETF is priced at $119.82 at the time of publication, down 0.40%. The predicted close tomorrow is $119.62 with a low and high of $119.34 and $120.79, respectively. Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.

Volatility

The CBOE Volatility Index (^VIX) is down 3.05% at 13.05 at the time of publication, and our 10-day prediction window shows mostly all negative signals. The predicted close for tomorrow is 13.20 with a vector of 1.33%. The predicted lows and highs for tomorrow are 12.48 and 15.17, respectively. Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.