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Markets moved lower in early morning trading with all three major indices in the red ahead of the conclusion of the two-day Federal Open Market Committee policy meeting. Following the meeting, the Fed announced the third straight rate cut with Fed Chair Jerome Powell meeting with the press. Following the FOMC, earnings will take center stage following the market close as Apple, Facebook, and Starbucks are due to report Q3 reports. Other key data released today include Q3 GDP and October Employment data, while tomorrow looks out for September Consumer Spending and Core Inflation. Under the current market conditions, we will buy when SPY is near $294-$296 level and continue following the semiconductor sector as we approach a strong seasonal trend. The market just broke through 52 weeks high but, with further volatility expected, we recommend readers maintain clearly defined stop levels for all positions. Overhead resistance is near $302-$305 level and there is little evidence the market will retest its 200 days MA. For reference, the SPY Seasonal Chart is shown below:
After the announcement of the rate cut, all three major U.S. indices reversed course and are on track to close in the green. The 75 basis point rate cute was the third state cut this year and was followed by a press conference by Fed Chair Jerome Powell. Consumer data and activity were a major point for the cut with Powell stating it is the “driving growth” of the overall economy. Also addressed during the conference were the latest global trade developments. The first phase of the China-U.S. trade deal, announced earlier this month, was addressed as a possible reducer of risk going forward. Similarly, Brexit risks have also lowered with the latest extension bringing the new Brexit date three months from now. Powell also stated the Fed, currently, did not see a decline in business investment as a negative factor in job growth, consumer spending, or income. When asked about whether the Fed will raise rates in the future, Powell stated the Fed was not currently considering it. As usual, Powell reiterated the Fed is focused on maintaining a 2% inflation level and will continue using it as a guide for Fed decisions.
After the market close, look out for Apple and Facebook earnings which will surely impact markets. General Electric, Sony, and the Southern Corporation released reports before the market opened and saw shares initially rise off their results. GE has since reversed course and is trading slightly lower. Going into their Q3 earnings tonight, both Apple and Facebook are trading slightly higher. Tomorrow, look for Royal Dutch Shell and Bristol Myers to report; Alibaba, Abbvie, Chevron, Exxon, and Berkshire are set to release data on Friday. Additional data to monitor as the week wraps up includes September Personal Income and Consumer Spending reports, as well as Core Inflation and October labor data. Globally, Asian markets closed lower while European markets were mixed.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows positive signals. Today’s vector figure of +0.10% moves to +0.80% in five trading sessions. Prediction data is uploaded after the market closes at 6 p.m. CST. Today’s data is based on market signals from the previous trading session.
On October 10th, our ActiveTrader service produced a bullish recommendation for Wal-Mart Stores (WMT). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
WMT entered its forecasted Strategy B Entry 1 price range $118.93 (± 0.36) in its first hour of trading and passed through its Target price of $120.12 in the second hour of trading the following trading day. The Stop Loss price was set at $117.74.
*Please note: At the time of publication we do own the featured symbol, BMY. 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 Thursday is Bristol-Myers(BMY). BMY 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 55.77 at the time of publication, with a +0.96% vector figure.
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.
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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $54.98 per barrel, down 1.17% 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 $11.58 at the time of publication. Vector figures show +1.11% today, which turns +4.65% in five trading sessions. 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 0.42% at $1,496.80 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive signals. The gold proxy is trading at $140.25, at the time of publication. Vector signals show +0.15% 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 3.31% at 1.78% at the time of publication. The yield on the 30-year Treasury note is down 3.28% 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 positive signals in our 10-day prediction window. Today’s vector of +0.14% moves to+1.68% in three sessions. 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 down 6.59% at $12.33 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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