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Big name earnings continue today with Amazon and GE reporting after close while yesterday saw strong earnings from Microsoft and Facebook. Major U.S. indices are currently split with S&P and Nasdaq in the green while the Dow is on track to close modestly lower. Key trade talks begin today in D.C. between the U.S. and China, ahead agreed upon March 1st deadline to resolve trade deficit and tariff concerns. Based off most technical indicators, the market remains overbought. We dissuade chasing the market and encourage our members to buy when the market sells off. The market has potential to revert to $254-257 level for SPY and should not retest December lows until summer of 2019. A rebound could see the market reach $274-280 level by the end of the first quarter if earnings continue to return positively and global trade tensions do not escalate. For reference, the SPY Seasonal Chart is shown below:
Yesterday, in the midst of a busy earnings week, Facebook, Tesla, Microsoft, Alibaba, and Visa reported their quarterly earnings to mostly positive results, meeting or beating expectations. Tesla, however, missed expectations, causing shares to drop noticeably. Microsoft earnings returned in-line with expectations, though clouding services exceeded expectations with revenue growing 20%, but is currently down over 1%. Amazon, who ranks first in cloud services, will report earnings today after the market closes. Facebook, also reporting yesterday, beat expectations and saw its shares rise after earnings were released. Currently, up 12% and rising, shares of the social media giant are up 22% from their December lows. Tomorrow, look for earnings from oil heavyweights Exxon and Chevron while other big names such as Sony, Honeywell, and Honda are also scheduled to report.
In D.C., delegates from China and U.S. will discuss trade and tariff concerns and will look to come to a resolution that will appease the guidelines both nations set during the G20 summit. President Trump will be involved in today’s meeting with Chinese officials while more talks are scheduled in the days to come. A full deal is unlikely to be brokered any time soon but the talks are a positive step forward and one in reaching a deal before the March 1st deadline. Tariffs will resume and increase on March 1st. Global markets closed higher today, with both European and Asian markets modestly up.
Several economic reports were released today, some which were delayed due to the government shutdown. New home sales for the month of November rose while wages also grew in the fourth quarter of 2018. Unemployment applications were up last week while more labor data will release tomorrow. December personal income, consumer spending, and core inflation reports remain delayed.
Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows mixed signals. Today’s vector figure of +0.76% moves to -1.50% in five trading sessions. The predicted close for tomorrow is 2,698.73. 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.
See today’s action below and how we trade this volatile market and what you can expect in our next Live Trading Room.
During today’s session, we were able to hedge and make money in a down market. We recorded 4 of 5 winning trades, ranging from 21% to over 75% ROI!
Symbol Net Gain%
| PG (Option) | 21.74% |
| VIX (Option) | 75.26% |
| UTX (Option) | 45.45% |
| IBM | 47.75% |
| CAT (Option) | -47.54% |
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On January 23rd, our ActiveTrader service produced a bullish recommendation for The AES Corporation (AES). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
AES opened in its forecasted Strategy B Entry 1 price range $15.61 (± 0.11) and passed through its Target price $15.77 within the second hour of trading, reaching a high of $15.84. The Stop Loss price was set at $15.45.
Our featured stock for Friday is Procter and Gamble Co. (PG). PG is showing a confident vector trend 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.
*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 $96.15 at the time of publication, up 1.73% from the open with a +0.32% vector figure.
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 the 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.
West Texas Intermediate for March delivery (CLH9) is priced at $53.86 per barrel, down 0.72% from the open, at the time of publication. Looking at USO, a crude oil tracker, our 10-day prediction model shows positive signals. The fund is trading at $11.29 at the time of publication, down 0.96% from the open. Vector figures show +2.21% today, which turns +9.50% in five 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.
The price for April gold (GCJ9) is up 0.69% at $1,324.70 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 negative signals. The gold proxy is trading at $124.70, up 0.01% at the time of publication. Vector signals show +0.49% for today. 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.
The yield on the 10-year Treasury note is down 1.9o% at 2.63% at the time of publication. The yield on the 30-year Treasury note is down 1.23% at 2.99% 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 negative signals in our 10-day prediction window. Today’s vector of +0.06% moves to -2.04% in three 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.
The CBOE Volatility Index (^VIX) is down 3.06% at $17.12 at the time of publication, and our 10-day prediction window shows positive signals. The predicted close for tomorrow is $18.26 with a vector of +2.01%. 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.
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