FOMC Keeps Interest Rate Unchanged, Positive Earnings Power Markets

January 30, 2019
By Vlad Karpel

All three major U.S. indices are on the move up today with early morning support from strong pre-market earnings and an afternoon boost from the first Fed Policy update of 2019. Interest rates were unmoved by the FOMC while pre-market earnings of Boeing and Alibaba beat expectations to help shares of each respective company, and subsequently markets throughout, rise. Microsoft, Tesla, and Visa are scheduled to report after market close today. Looking ahead, our methodology remains the same: avoid chasing the market, buy the selloffs. The market could rebound to $275-$280 level by the end of Q1 2019; however, for the next few weeks we could see the market revert to $254-257 level for the SPY. For reference, the SPY Seasonal Chart is shown below:

Today, Fed officials finished a two day meeting which concluded with no interest rate hike. The current major consensus is that there will be two hikes in 2019 and the first one should be expected closer to summer. A major theme reports and analysts alike noticed was the reaffirmation of patience. Both within the Fed policy and in Powell’s comments after the meeting, patience was stressed as the current mode of the Fed in regards to interpreting the market and making adjustments. Slowing global growth, inflation, and the balance sheet estimates were hotly discussed after the meeting conclusion when Powell took questions from the press. Again, Powell stressed patience and that better understanding and definition of the current economic climate can only come in “hindsight.” This troubled reports and eased markets off their gains, but only minimally. After the press conference, major U.S. indices lowered from their daily highs but remain in the green for today.

Earnings are playing a major role in moving markets today as yesterday plush Apple earnings and this morning positive Boeing numbers are supporting U.S. markets nicely. Apple is currently up 7% after earnings released yesterday topped expectations. Boeing, released in before market open today, also topped expectations to go up 5% today. Elsewhere, Alibaba stock rose 5.5% behind strong earnings that showed revenue and profit were up for the quarter while McDonalds beat earnings expectations but not revenue estimates, causing the fast-food chain to lower over 2%. Microsoft, Visa, Tesla, and Qualcomm Inc. are scheduled to report after close while tomorrow we will see earnings from Amazon, Mastercard, and GE.

Globally, Asian markets closed to mixed results while European markets finished higher throughout. The dollar is on the move down today while oil goes up behind the Venezuela sanctions. Gasoline stockpiles lowered last week while looking at the yearly movement of the commodity, oil prices noticeably rose in 2018.

Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows positive signals. Today’s vector figure of +0.11% moves to +0.44% in five trading sessions. The predicted close for tomorrow is 2,636.84. 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 Performance

See how we traded in volatile conditions and what you might 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%

Our Live Trading Room is open every trading day from 9:15 am Eastern Time, but these Live Trading Sessions are only available for Premium Members.

We wanted to share the recording with you so you can see the profits you might be missing- even during volatile markets.


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Highlight of a Recent Winning Trade

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.


Thursday Morning Featured Stock

Our featured stock for Thursday 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 $94.52 at the time of publication, up 1.05% from the open with a +0.40% 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.


Oil

March Brent Crude (LCOH9) is priced at $61.73 per barrel, up 072% from the open, 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 $15.06 at the time of publication, down 2.08% from the open. Vector figures show -0.16% today, which turns -0.36% 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.

Gold

The price for February gold (GCG9) is up 0.76% at $1,318.80 at the time of publication. Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mostly negative signals. The gold proxy is trading at $115.54, up 2.36% at the time of publication. Vector signals show +0.02% 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.  

Treasuries

The yield on the 10-year Treasury note is down 1.00% at 2.69% at the time of publication. The yield on the 30-year Treasury note is up 0.01% at 3.04% 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 -0.20% moves to -1.15% 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.

Volatility

The CBOE Volatility Index (^VIX) is down 2.61% at $22.36 at the time of publication, and our 10-day prediction window shows negative signals. The predicted close for tomorrow is $17.15 with a vector of -17.87%. 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.

 


OFFER OF A LIFETIME:  Trailing 18-month return. . . 1,064%!

That can turn $100,000 into $1,164,415 in just 18 months!                                                    

  •      No way this offer will ever be repeated!
  •      Prices are going up significantly soon!
  •      One-time offer expires midnight tonight.

Click Here for a brief outline of what you get…


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