Investors prepare for today’s interest-rate announcement from the Fed, U.S crude supplies drop for the first time in 10 weeks

March 15, 2017
By Vlad Karpel

Investors are anticipating the pending decision from this week’s Fed meeting. Interest rates are expected to be raised, turning attention away from slides in oil prices. The recent slump in the crude market has contributed to some pullbacks on major indexes- which seem to making back losses today.  

Investors are continuing to monitor today’s election in the Netherlands. The poll performance of controversial far-right politician Geert Wilders- sometimes referred to as the “Dutch Trump”- will serve as a bellwether for the country’s level of ‘euroscepticism’. The outcome will have an effect on investor opinion on the future integrity of the Euro, the common currency of EU member nations.  

The DJIA is currently up 0.23% at 20,886.02. The Nasdaq-100 is up 0.21% at 5,869.10 and the S&P 500 is currently trading at 2,373.61 which is up 0.34% from the open.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows consistent signals for downward momentum. Negative vector figures climb from -0.25% today past  -0.70% in the next four trading sessions. Today’s support and resistance is 2,346.31 (± 3.13) and 2,365.45 (± 3.16), respectively. The predicted close today is 2,360.25.   



After per-barrel prices for light, sweet crude dropped below $50 this week, new U.S domestic production figures show a drop in supplies. The U.S. Energy Information Administration announced a drop of 200,000 barrels for the week ending March 10. This marked the first decline in 10 weeks. Investors are still worried that rising U.S supplies will offset the global production cuts enacted by OPEC last November.  West Texas Intermediate for April delivery is currently priced at $48.45 per barrel, up 1.78% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows strong negative signals. Vector figures show -0.94% for today, followed by incremental downward moves past -10% in the next four trading sessions. All vector figures are based on today’s market conditions. The fund is currently trading at 10.33, which is up 1.37% from the open. Today’s prediction sees support at 9.79 (± 0.05) and resistance at 10.19 (± 0.05). The predicted close for today is 9.98.  



Gold for April delivery has dropped below the $1,200 level today, down 0.19% at $1,199.40 a troy ounce. A looming interest rate hike announcement from the Fed today has implications for a stronger dollar- which will adversely impact gold prices. An interest rate hike will lend strength to the U.S. dollar, which makes gold less attractive to investors using other currencies.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows strong downward momentum for gold prices. Relative to today’s conditions, the negative vector values pass -3% within six trading sessions.  The gold proxy is currently trading at 114.24, up 0.11%. Today’s predicted low is 112.72 (± 0.30) and the predicted high is 114.12 (± 0.30). The predicted close today is 113.51 with a vector value of -0.70%.  



Yields on treasury bonds are sliding today and bond prices are up ahead of today’s impending rate hike announcement from the Fed. The yield on the 10-year Treasury note is currently at 2.58%, down 0.98% from the open.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see consistent negative signals in our 10-day prediction window. Relative to today’s conditions, we see vector figures climbing to hover around -1%.  The ETF is currently priced at $117.73- up 0.57% from the open. The predicted close today is $116.67 with a low and high of 115.64 (± 0.37) and 117.09 (± 0.38), respectively.  



The CBOE Volatility Index (VIX) is currently down 4.80% at 11.71. Relative to today’s conditions, the 10-day prediction window shows negative movement followed by positive corrections. The predicted close today is 12.15 with a positive vector of +0.90%. Today’s predicted lows and highs are 11.15 (± 0.18) and 12.34 (± 0.20), respectively.


Other News

Oracle (ORCL), Williams-Sonoma (WSM), and Guess (GES) are set to report earnings after today’s market close.

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