Global and Market Reactions After Iran Deal Pull Out

May 9, 2018
By Vlad Karpel

The Iran nuclear deal looks to be done. We didn’t have to wait until the end-of-the-week deadline to get a decision from President Trump. Pulling out of the deal will mean resumed sanctions on Iran while inevitably affecting oil and possibly setting off some further geopolitical reactions. While some American allies, and fellow Iran deal members, discouraged the U.S. from pulling out, the White House administration stated it is not simply pulling out, but pulling out in hope of restructuring a better deal. For now, look for oil prices to continue rising with a possible disruption to global supplies.

Currently, the SPY is sitting right at the 50-day moving average with little room to the upside. As we look forward toward to the final few days of significant earnings, investors should look to sell into the rallies. Earnings season is winding down and there appears to be no catalyst to the upside. That’s why investors should look to sell into the rallies. And based on my seasonal charts, we’re looking at a SPY that has little probability of going over $272-$275 in the next few months.

Overall, U.S. stocks were on the rise today, with all three major indices making gains for the day. Energy sector looks to gain the most, another possible response to the Iran deal. Tuesday’s decision certainly had an impact on markets and assets and saw global reactions. Saudi Arabia, long-time Iran rival, pledged to help stabilize oil markets and prevent any potential supply shortages. The reinstated sanctions will take some time to materialize but expect further reaction to the deal to come in the next few months. Boeing looks to be one of the first majors affected, with GE right alongside it. A $20 billion deal will likely be revoked as the U.S. withdrawal signals harsh penalties for business transactions with the out-of-favor country. Another possible implication of this withdrawal is the stance the U.S. might take while meeting with North Korea later this month, specifically Trump’s diplomatic and global approach and the policies to come from it.

Earnings season heads into its final days, with some big names reporting so far this week. Disney posted stronger-than-expected earnings but closed lower. Other top earnings performers include Groupon and TripAdvisor, which both saw substantial +5.00% gains. Papa John’s and ADT reported below expectation and saw negative effects to its ticker. Electronic Arts Inc. saw modest gains after a positive report, bringing its gains for the year to 29%.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows mostly positive signals. Today’s vector figure of -0.20% moves to +0.43% in three trading sessions and rives upward from there. Today’s predicted support and resistance levels are 2,645.54 (±8.69) and 2,671.92 (± 8.78), respectively. The predicted close for tomorrow is 2,669.33. 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.  

Highlight of a Recent Winning Trade

On May 8th, our ActiveTrader service produced a bullish recommendation for Whiting Petroleum Corporation (WLL). ActiveTrader, included in all paid Tradespoon membership plans, is designed for intraday trading.

Trade Breakdown

WLL opened near Entry 1 price range of $45.05 (± 0.32), moving through its Target Price of $45.50 in its last two hours of trading, reaching $46.40. The Stop Loss was set at $44.60.

Thursday Morning- Buy, Buy, Buy

Our featured stock for Thursday is ConcoPhillips (COP). COP is showing a confident uptrend 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 predicted support and resistance, relative to our entire data universe. Our 10-day prediction model shows positive vector figure reaching +1.00% in one trading session which then incrementally build throughout the 10-day forecast. Our benchmark for vector figures is +1.00%

*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 $69.37 at the time of publication, up 2.41% from the open with a +0.89% vector figure.

Thursday’s prediction shows an open price of $67.59, a low of $66.24 and a high of $68.85.

The predicted close for Thursday is $68.29. Vector figures jump to +1.21% on Thursday and drive upward from there. This is a good signal for trading opportunities because we use vectors as a primary factor in determining price movements for stocks and ETF.

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 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.

Live Trading Room Update

When the market was down this week, see how we traded in volatile conditions and what you might expect in our next Live Trading Room. During recent volatility, we held Live Trading Room Session on 5/7/18 where our winning trades ranged -82.91% to 50% ROI!

Symbol Net Gain %
JPM 44.14%
SPY(OPTION) 38.73%
SPY(OPTION) 20.77%
ZION 39.34%
ZION 23.19%
ROST -82.91%
JNPR 50.00%

Our Live Trading Room is open every trading day from 9:15 am Eastern Time, but Live Trading Room 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 very volatile markets.

Click Here to Watch How I Generate Profits During this Volatile Market!

Oil

West Texas Intermediate for June delivery (CLM8) is priced at $70.98 per barrel, up 2.85% from the open, at the time of publication. The widespread assumption that began to manifest on Monday proved true Tuesday when Trump pulled the U.S. out of the Iran deal. Investors are expecting a disruption in crude oil supplies, which will continue the current multi-year high we’ve reached with oil prices. Oil futures have been significantly sliding.

Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $14.37 at the time of publication, up 2.20% from the open. Tomorrow’s prediction sees support at $13.43 and resistance at $13.49. The predicted close for tomorrow is $13.82. Vector figures show -0.86% today, which turns positive, 0.36%, in four 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

Although the dollar slowed its recent stellar run, gold has yet to recover or build on any gains. Reporting a third straight day of sliding, gold demand looks to also be tempered by the Iran deal developments. The price for June gold (GCM8) is up 0.02% at $1,313.70 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 $124.43, down .13% at the time of publication. Tomorrow’s predicted low is $124.06 and the predicted high is $125.08. The predicted close for tomorrow is $124.61. Vector signals show +0.44% for today, turning negative, -0.27%, 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.  

Treasuries

Yields jumped today as Investors prepare for the multi-billion bond auctions scheduled for the rest of the week. Rapidly rising oil prices could boost inflation which, in turn, puts pressure on Feds to announce more interest rate hikes. The yield on the 10-year Treasury note is up 0.82% at 3.00% at the time of publication. The yield on the 30-year Treasury note is up .56% from the open at 3.15%.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see all positive signals in our 10-day prediction window. Today’s vector of 0.39% moves to +1.48% in four trading sessions. The ETF is priced at $118.286 at the time of publication, down 0.34%. The predicted close for tomorrow is $119.86 with a low and high of $118.63 and $120.16, respectively. 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 4.96% at 13.98 at the time of publication, and our 10-day prediction window shows mixed signals. The predicted close for tomorrow is 14.98 with a vector of +2.99%. The predicted lows and highs for tomorrow are 13.60 and 16.55, respectively. 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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