After Busy Week, Flat Markets Indicate Resilient Assets

Buy into the dips and sell into the rallies continues to be the theme of 2018 as we enter the third week of June. While the market remains overbought it is important to monitor 50-day moving-averages on SPY and other major indices to pinpoint optimal entry and exit positions, something my seasonal charts are primed for. Continue monitoring these updates, and others, in order to stay on top of the ever rotating-market.

After a busier than usual week for investors, in terms of worldly and financial events to monitor, major U.S. indices fell mostly flat, with the S&P and Dow slightly down for the week while Nasdaq recorded modest gains. In a week that saw U.S. and Canada, as well as other G7 members, on shaky ground, the North Korean summit, and a Fed-Reserve meeting that ended in interest rate hike which ultimately signaled another two for 2018, U.S. assets came out almost unscathed. Big losses for the week amounted mostly to the winners of the federal court ruling which OK’d in principle the merger of AT&T and Time Warner, which cleared the way for a Fox buyout, for which both Disney and Comcast are interested in. The news supported Fox and Time Warner, while AT&T, Comcast, and Disney all took some losses. With these mergers come large debt inheritance which some analysts see as damaging regardless of the near-monopoly these corporations are setting up to dominate their sectors. These mergers are far from finished so investors should continue monitoring the action.

Elsewhere, U.S and China continue their tariff standoff as Trump announced another $50 billion in tariffs toward China, while China’s State Council announced retaliation by targeting high-value American exports. The news, which developed on Friday and through the weekend, could be seeing its effect on U.S. assets today as all three major indices are down for the day, while nine out of the eleven primary sectors of S&P are also down. Both S&P and Dow are modestly up for the year while Nasdaq has pushed north of 10% gains for the year. This should provide promise for investors as 2018 has surely had its waves of volatility and headline news but has not yet pushed major indices into negative territory.

Looking ahead at the week, we will hear from New York and Atlanta Fed Presidents this afternoon while a major Organization of the Petroleum Exporting Countries meeting is set for Friday of this week. Contracts to hold crude production back by 1.8 million barrels a day is set to expire and the organization will decide if they are interested in renewing the program. Overall, the turbulent nature of the market has European and Asian markets down while the dollar remains nearly flat for the day.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows mostly positive signals. Today’s vector figure of -0.13% moves to 0.07% tomorrow before climbing higher into positive territory. Today’s predicted support and resistance levels are 2,774.81 (±6.67) and 2,786.85 (± 6.70), respectively. The predicted close for tomorrow is 2,792.18. 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 June 14th, our ActiveTrader service produced a bearish recommendation for Vodafone Group Plc – American D (VOD). ActiveTrader, included in all paid Tradespoon membership plans, is designed for intraday trading.

Trade Breakdown

VOD closed near Entry 2 price range of $24.81 (± 0.14) in its fifth hour of trading and moved through its Target Price of $24.44 in its first hour of trading the following day. The Stop Loss was set at $24.44.

Tuesday Morning Featured Stock

Our featured stock for Tuesday is  CSX Corporation. (CSX). FFIV 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 +1.25% in seven 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 $66.28 at the time of publication, down 0.56% from the open with a +0.57% vector figure.

Tuesday’s prediction shows an open price of $67.12, a low of $65.46 and a high of $67.31.

The predicted close for Tuesday is $66.11. Vector figures stay positive and drive upward from there. 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

All eyes for the commodity traded will be on Friday’s meeting between the OPEC and 10-major non-OPEC members regarding renewing the contract to curb crude output going past 2018. With escalating trade tension between U.S. and China, along with the anticipation of Friday’s meeting, oil prices traded higher today. West Texas Intermediate for July delivery (CLN8) is priced at $65.17 per barrel, up .15% from the open, at the time of publication.

Looking at USO, a crude oil tracker, our 10-day prediction model shows mostly positive signals. The fund is trading at $13.315 at the time of publication, up 2.03% from the open. Tomorrow’s prediction sees support at $12.92 and resistance at $13.38. The predicted close for tomorrow is $13.36. Vector figures show -0.34% today, which turns 1.07% 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

After hitting a yearly low last week, gold trades slightly higher today. As geopolitical tension and conflict risk rises, the commodity should rise with it and move inversely of the dollar and other major currencies.  The price for August gold (GCQ8) is up 0.20% at $1,281.20 at the time of publication.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mostly positive signals. The gold proxy is trading at $121.265, down .06% at the time of publication. Tomorrow’s predicted low is $120.91 and the predicted high is $122.25. The predicted close for tomorrow is $121.41. Vector signals show -0.32% for today, reaching 0.31% 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

With so much geopolitical news, it comes as a pleasant surprise that U.S. bonds mostly remain flat. Investors should continue monitoring China-U.S. trade relations and look forward to speeches from Fed Presidents for a better indication of market direction. The yield on the 10-year Treasury note is up 0.13% at 2.92% at the time of publication. The yield on the 30-year Treasury note is up 0.40% at 3.06% 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 all negative signals in our 10-day prediction window. Today’s vector of -0.19% moves to -0.97% in three trading sessions before going further into negative territory. The ETF is priced at $120.14 at the time of publication, down 0.20%. The predicted close tomorrow is $119.50 with a low and high of $119.30and $120.64, 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 positive signals. The predicted close for tomorrow is 12.00 with a vector of -4.23%. The predicted lows and highs for tomorrow are 11.18 and 13.16, 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.