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All three major U.S. indices traded higher today following solid retail earnings but finished off their daily highs after the Senate passed a bill to delist Chinese companies on U.S.exchanges. Yesterday, Fed Chair Jerome Powell and U.S. Treasury Secretary Steve Mnuchin met with Senate Banking Committee, providing updates on the $2.2 trillion CARES Act. Both indicated additional job losses could be ahead while Powell stressed the importance of local economies; as it stands, Congress is working on an additional economic relief package. Minutes from last month’s FOMC were released today as well as earning results from Target, Lowes, and Analog Devices. Based on our models, the SPY will trade between $270-$310 level in the next 2-3 weeks. Most sectors have already broken through their recent overhead resistance levels, in turn, eliminating the potential for the market to retest $260 SPY level. With this in mind, we will be a buyer into any short term corrections and it is our opinion investors should continue considering hedging portfolios into the rallies. We will continue monitoring the VIX as the market can overshoot support and resistance levels when VIX is trading near $30 level. In the short term, we still believe the market is overbought; long-term investors can consider buying equities with dollar-cost averaging in mind. Market Commentary readers are always encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Oil moved higher alongside Gold while the dollar traded lower. Long-term U.S. Treasury notes saw yields edge lower. Globally, European markets edged higher while Asian markets closed to mixed results.
Key U.S. Economic Reports/Events This Week:
Key Corporate Earnings Out This Week:
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term mixed outlook. 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 May 6th, our ActiveTrader service produced a bullish recommendation for Equifax Inc (EFX). ActiveTrader is included in several Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
EFX entered its forecasted Strategy B Entry 1 price range $146.62(± 1.47) in the first hour of trading that day and passed through its Target price of $148.09 in the first hour of trading the following day. The Stop Loss price was set at $145.15.
Our featured symbol for Thursday is Morgan Stanley (MS). MS is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (C) indicating it ranks in the top 50th percentile for accuracy for current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $41.06, with a vector of -0.05% 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.
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 not have a position in the featured symbol, DIS. 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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $33.52 per barrel, up 4.88% 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 $24.31 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.
Gold
The price for the Gold Continuous Contract (GC00) is up 0.32% at $1,751.10 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 $162.69, at the time of publication. Vector signals show +0.06% 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 up, at 0.727% at the time of publication.
The yield on the 30-year Treasury note is up, at 1.438% 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.
Volatility
The CBOE Volatility Index (^VIX) is $29.3 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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