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Markets are maintaining gains following strong labor and consumer data as well as the latest U.S.-China trade developments. Yesterday, China announced tariff exemptions on certain goods while today President Trump declared he will delay the additional 5% tariffs that were set to kick in by two weeks. The European Central Bank met today and discussed interest rate cuts and economic stimulus; next week look out for the U.S. FOMC decision. With the SPY currently trading at $294-$302, we do not see the potential for the market to overshoot all-time high of $302. The market has broken out of the August range of $280-$295, short term support is at the 50-days MA on SPY $295, and the question remains: is a true breakout for a bull market or a fault breakout? Our belief is that the market is range-bound and not a true breakout until we see other key asset classes, such as XLU and DXY for example, breakout out of their existing trends. We will look to buy when SPY is near $282 and sell near $300. We encourage Market Commentary readers to maintain clearly defined stop levels for all positions as further volatility is expected. For reference, the SPY Seasonal Chart is shown below:
All three major U.S. indices are on track to close in the green today following strong economic data. Labor report for August showed an increase of 130,000 jobs while unemployment slightly dipped last week. Other reports today included core CPI, up 0.3%, bringing year-over-year inflation to 2.4% and consumer price index, up 0.1%. Broadcom reports corporate earnings after market close today, Adobe and General Mills report next week. Tomorrow, look for August retail sales and September consumer sentiment index. Federal Budget report, released today, showed deficit fell almost 7%, at $200 billion for August, and on track for $1 trillion in 2019. Also in the report, government spending was down last month by 1.1%
Globally, Asian markets closed to mix results while European markets were up. The European Central Bank held its monetary policy meeting today and decided to cut rates and restart its government bond purchasing program. This would aim to reduce long-term interest rates and comes one week ahead of the U.S. monetary policy decision by the FOMC, also likely to cut rates. Regarding U.S.-China relations, President Trump recently announced certain additional tariffs would be halted in anticipation of the coming negotiations. This follows yesterday’s tariff exemption by the Chinese government.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows positive signals. Today’s vector figure of +0.35% moves to +1.98% in five trading sessions. Prediction data is uploaded after the market close at 6 pm, CST. Today’s data is based on market signals from the previous trading session.
On September 6th, our ActiveTrader service produced a bullish recommendation for TJX Companies (TJX). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
TJX entered its forecasted Strategy B Entry 1 price range $55.77 (± 0.38) in its first hour of trading and passed through its Target price $56.33 in the first hour of trading that day. The Stop Loss price was set at $55.21
*Please note: At the time of publication we do not own the featured symbol, PEG. 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 own personal 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 personal picks, please click here.
Our featured symbol for Friday is Public Service Enterprise Group (PEG). PEG is showing a confident vector trend in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (A) indicating it ranks in the top 10th percentile for accuracy for predicted support and resistance, relative to our entire data universe.
The stock is trading at $61.56 at the time of publication, down 0.57% from the open with a +0.59% 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 the 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 Crude Oil delivery (CL.1) is priced at $55.09 per barrel, down 1.18% 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 $11.45 at the time of publication, down 1.97% from the open. Vector figures show -0.08% today, which turns +1.61% 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 the Gold Continuous Contract (GC00) is up 0.21% at $1,506.30 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 $141.43, up 0.28% at the time of publication. Vector signals show -0.87% 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 up 2.49% at 1.709% at the time of publication. The yield on the 30-year Treasury note is up 1.71% at 2.26% 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 -0.55% moves to -3.48% 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 2.11% at $14.19 at the time of publication, and our 10-day prediction window shows negative signals. The predicted close for tomorrow is $14.32 with a vector of -4.93%. 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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