New Year. New Gains as tech shares lead major index moves past records

Upbeat market sentiments seem to be pushing into 2018 as all indices make gains today, following record numbers on Tuesday. Tech shares are seeing a boost in recent trading, leading gains today. Providing extra support today is a better-than-expected December manufacturing and construction activity report released today.  The December 12-13 FOMC minutes will be looked at for 2018 rate-hike signals. Overall, new capital flows should continue to funnel into equities for the start of 2018, which may put the Fed on alert depending on inflation figures. Some analysts suggest we’re overdue for a healthy pullback, but as of now the markets are following the path of least resistance upward.

In the short-term, investors should be monitoring the growing political unrest in Iran- which has turned deadly in recent days. Protests have grown to massive proportions, with broad civil ire directed toward Supreme Leader Ayatollah Ali Khamenei. Corruption, rising inflation and deep-seated socio-political concerns are the main factors driving the protests. Pro-government counter-protests have also begun, which can lead to a protracted conflict. Broader regional oil operations may be affected, so the crude oil markets will see an impact here. Geopolitical opportunities may present themselves as well, with hardliners within the Trump administration eyeing a time to leverage more pressure on Iran. This, coupled with yesterday’s inflamed rhetoric between President Trump and North Korea’s Kim Jong-un, will likely direct market sentiments in coming days.

At the time of publication, the DJIA is up 0.14%, or 35.37 points, at 24,860. The S&P 500 is trading at 2,707- up 0.40% from the open. The Nasdaq-100 is up 0.63% at 7,051.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows  slight negative vector signals. Today’s positive vector figure of +0.04% moves to -0.30% within three trading sessions.  Today’s predicted support and resistance is 2,673.54 (± 3.46) and 2,699.40 (± 3.49), respectively. The predicted close today is 2,693.46. 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 January 2, our ActiveTrader service- which is included in all Tradespoon membership plans- generated a bullish trade for Alcoa Corp. (AA). Our ActiveTrader service is designed for intraday trading.

Trade Breakdown

AA opened within the Entry 1 ($53.87, ± 0.27) price range and moved through its Target of $54.41 within the first hour of trading. The Stop Loss was set at $53.33.

Must-buy Stock for Thursday

Our must-buy stock for Thursday is Adobe Systems Inc. (ADBE). ADBE is showing near-term bullish signals 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 vector figures hitting +2.50% within the next two trading sessions. Our benchmark for vector figures is +1.00%.

*Please note: Our must-buy 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 $180.42 at the time of publication, up 1.53% from the open with a +1.83% vector figure.

Thursday’s  prediction shows an open price of $178.73, a low of $175.67 and a high of $180.60.

The predicted close for Thursday is $179.54. Vector figures show +1.12% for tomorrow, which hold positive before turning downward later in the forecast.  This is a good signal for trading opportunities, because the vectors are 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 relatively to 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 predicted direction of the Vector. The higher the value of the Vector the higher its momentum.

Oil

The aforementioned unrest in Iran is already showing its mark on the crude oil market today, as concerns mount over crude output disruptions. Iran is the third-largest member-country producer of OPEC. Although no real impact on output has occurred, the protests- and pro-government counter-protests- show no sign of abating. This concern is enough to provide firm support in per-barrel prices. 20 people are confirmed dead as of today, and there is no sign that tensions are easing and the conflict will likely worsen before calming. Another geopolitical factor to consider comes from the U.S. government; Trump administration hardliners against Iran may take this as an opportunity to impose stricter sanctions on the Islamic Republic, or use the situation as a device to push against the 2015 international agreement designed to impede Iran’s nuclear program.  

West Texas Intermediate for February delivery (CLG8) is priced at $61.41 per barrel at the time of publication, up 1.84% from the open.  

Looking at USO, a crude oil tracker, our 10-day prediction model shows increasing positive signals. The fund is trading at $12.28 at the time of publication, up 1.74% from the open. Today’s prediction sees support at $12.03 (± 0.05) and resistance at $12.27 (± 0.05). The predicted close for today is $12.14. Vector figures show +0.54% today, moving to +0.70% in three 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 February gold (GCG8) is up 0.14% at $1,317.90 a troy ounce at the time of publication. A variety of factors are contributing to the safe-haven asset’s trek into a possible 9-day streak of gains. Speculation and some skepticism around the tax reform bill’s real tangible impact on the economy, coupled with a slumped dollar, are driving funds into gold. The Fed’s announcement of 2018 interest rate hikes, as well as the tax bill, have not yet boosted the U.S. dollar because enhanced economic performance- outside of corporate share prices- has yet to be seen. Geopolitical worries in Iran, as well as North Korea, have also provided firm support for the yellow metal. Investors are also starting to anticipating a natural correction for the consistent equities rallies in recent weeks and months. These price movements have not yet made their way into proxy ETF’s, however.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows strong positive signals. The gold proxy is trading at $124.91, down 0.19% at the time of publication. Today’s predicted low is $125.15 (± 0.23) and the predicted high is $126.03 (± 0.23). The predicted close today is $125.77. 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 are sliding today amidst the December 12-13 FOMC minutes other factors. The minutes will give investors further signals on interest-rate hikes as investors monitor underwhelming inflation figures. Geopolitical troubles are in focus, as well as a weakened U.S. dollar despite the GOP tax-reform bill. The yield on the 10-year Treasury note is down 0.77% at 2.44% at the time of publication.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see mixed signals in our 10-day prediction window. Today’s vector of -0.40% holds negative before turning positive in six trading sessions. The ETF is priced at $125.89 at the time of publication, up 0.32%. The predicted close today is $125.08 with a low and high of $124.72 (± 0.22) and $126.29 (± 0.23), 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.

Cryptocurrencies

Bitcoin prices are showing recovery after pulling back somewhat following a Tuesday climb. The spot price for a single bitcoin (BTCUSD) is up 1.77% at $15,061.47 at the time of publication. Tuesday’s report from the Wall Street Journal indicating venture investor Peter Thiel’s Founder Fund had accumulated hundreds of millions of dollars in the leading cryptocurrency had stalled gains in both the spot price and futures contracts. In other news, we’re seeing record numbers for Ripple, a growing contender to Bitcoin and a global No. 2. Bitcoin’s current market cap is around $250 billion, representing 35% of the entire cryptocurrency universe. Ripple, with a single-coin spot price of around $2.70 today- arrives at a total value of $105 billion.

As futures contracts continue to pop up on various exchanges- and venture funds and institutional capital flows into the emerging industry- expect to see rapid rises and falls in contender currencies. Expect also to see in the longer-term, the creation of industry-specific currencies and blockchain technology applications. We’ll most likely see adoption in supply-chain management and global logistics at the forefront.

CME Group’s BTCF8 futures contract for January is up 0.98% at $15,075 at the time of publication. opened at $20,000 on Sunday and is currently down 3.08%, or $600.00, at $18,900.

Using Grayscale’s Bitcoin Investment Trust (GBTC) as a Bitcoin tracker in our Stock Forecast Toolbox, we see overall negative signals in our 10-day prediction window. Today’s vector of -4.19% fluctuates in mostly negative territory for the duration of the forecast. The trust is priced at $2,354.00 at the time of publication, up 4.09% or $92.50. The predicted close today is $1,809.80 with a low and high of $1,779.83 (± 108.16) and $2,261.50 (± 137.43), 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 6.45% from the open at 9.14 at the time of publication, and our 10-day prediction window shows building positive movement.  The predicted close today is 10.12 with a positive vector of +4.16%, which moves to +10.45% in four trading sessions. Today’s predicted lows and highs are 9.08 (± 0.20) and 10.67 (± 0.24), 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.