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On Monday, stocks in the U.S. market soared as investors looked forward to corporate earnings announcements while the U.K.’s new tax policy caused a shift in bond markets worldwide. All three major U.S. indices booked gains as the latest earnings season appears to empower shares to trade higher. The U.K.’s new finance minister has announced a reversal on previously announced tax cuts while also scaling back energy support. This helped global markets move higher with European markets closing in the green. The $VIX is trading near the $35 level while gold moves slightly higher, and oil slightly lower.
Last week was a roller coaster for the stock market, with major indices see-sawing up and down. Stocks fell sharply on Thursday, then recovered to end the day up. But Friday brought more volatility, with sharp losses across the board. Also last week, we saw earnings season kick off with major banks JPMorgan Chase, Citigroup, Morgan Stanley, and Wells Fargo releasing earnings on Friday. This week, the latest earning season is set to be in full stride with marquee earnings data from Bank of America, Charles Schwab, Netflix, Johnson & Johnson, Tesla, AT&T, and Verizon next week. Additionally, the latest Beige Book will also be released.
We are watching overhead resistance levels in the SPY, which are presently at $370 and then $380. The $SPY support is at $355 and then $340. We would be a buyer into any further sell-offs and encourage subscribers not to chase the market to the downside. We expect the market to continue the bottoming process for the next 2-8 weeks. The short-term market is oversold and can stage a multiple sessions rally. We encourage all market commentary readers to maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Note: The Vector column calculates the change of the Forecasted Average Price for the next trading session relative to the average of actual prices for the last trading session. The column shows the 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.
*Please note: At the time of publication Vlad Karpel does have a position in the featured symbol, SPY. Our featured symbol is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his money in paid subscription services. If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, or MonthlyTrader recommendations. If you are interested in receiving Vlad’s picks, please click here.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $85.56 per barrel, down 0.06%, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $70.17 at the time of publication. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
The price for the Gold Continuous Contract (GC00) is up 0.41% at $1655.50 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $152.98 at the time of publication. Vector signals show -0.65% for today. Prediction data is uploaded after the 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 at 4.013% at the time of publication.
The yield on the 30-year Treasury note is flat at 4.019% 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. Prediction data is uploaded after the 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 $31.37 at the time of publication, and our 10-day prediction window shows mixed signals. Prediction data is uploaded after the market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
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