Spread of the Chinese coronavirus continues to impact global markets as stocks lowered in early morning trading. Containment efforts in China are in progress while Chinese stock markets will be closed until Monday. Both European and Asian markets finished lower while all three major U.S. indices are on track to close in the red. Several key names have already been impacted by the viral outbreak, including declines in Delta Airlines, American Airlines, and Starbucks, due to tentative disruptions. Corporate earnings season is in full swing with reports from Facebook, Apple, and major banks already released. Microsoft and Tesla, which released earnings yesterday after market close, and Coca-Cola, released before market open today, are seeing shares grow off impressive earnings data. Amazon and Visa earnings are in focus today with both companies releasing after market close, while tomorrow’s key earnings include Chevron and Exxon. We believe the market will remain range-bound, between $320 and $333, for the next 2-4 weeks and we will look to buy near $320. The current SPY support level is at $320, which is the same as the 50-days M.A. on SPY, and we remain bullish during this earnings season. Additional pullbacks are expected and we expect a 2-5% correction in the marker next 4-6 weeks as the market is losing momentum, especially in the technology sector. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Markets retreated today after trading higher for two days behind optimism of the coronavirus containment and continued strong earnings. While earnings primarily remained positive, the viral outbreak in China continues to cause concern as the reaches over 80 dead and over 7,000 reported infected. Chinese markets have shut down and will remain closed until Monday while several U.S. stocks, as well as global markets, are seeing declines from the virus. Airlines, in particular, are seeing shares lower while Starbucks also saw shares dip. Globally, Asian and European markets closed in the red.
With all three major U.S. indices trading lower today after trading higher following the FOMC decision yesterday, attention once more turns to corporate earnings. Yesterday’s Microsoft, Tesla, and Boeing earnings topped expectations helping shares grow while today all eyes will be on Amazon’s aftermarket close release. Also releasing today will be Visa, while Coca-Cola, having already released this morning, rose over 2% following its strong earnings report. Next week, key earnings will include Google, Qualcomm, Disney, as well as Q4 reports from Metlife, Grubhub, Spotify, General Motors, Twitter, Abbvie, and more. Economic reports to track next week include motor vehicle sales, factory orders, trade deficit, Q4 productivity, and December consumer credit.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term negative outlook. Today’s vector figure of -0.68% moves to -2.24% in four 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 January 10th, our ActiveTrader service produced a bullish recommendation for Apple Inc. (AAPL). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
AAPL entered its forecasted Strategy B Entry 1 price range $309.63(± 1.05) in its third hour of trading that day and passed through its Target price of $312.73 in the second hour of trading the following trading. The Stop Loss price was set at $306.53.
*Please note: At the time of publication Vlad Karpel does have a position in the featured symbol, VXX. 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 iPath S&P 500 VIX Short-Term (VXX). VXX is showing a positive 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 $14.85 at the time of publication, with a -1.09% 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 $52.91 per barrel, down 0.81% 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 $11.08 at the time of publication. Vector figures show +0.63% today, which turns to +4.55% in three 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 0.12% at $1,572.30 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows negative signals. The gold proxy is trading at $148.47, at the time of publication. Vector signals show -0.81% 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 0.27% at 1.59% at the time of publication.
The yield on the 30-year Treasury note is up 0.87% at 2.05% 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 +042% moves to +2.20% 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 $14.85 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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