Markets are edging higher today, on track for the fourth straight day of gains. All three major U.S. indices are up over 3% for the week and look to continue building off gains with several key earnings and economic reports still due this week. As containment efforts continue in China, the death toll has now risen to 500 and several companies are taking further precautions; Nike, for example, has closed down a majority of their stores in China. Next week, several parts of the U.S.-China trade deal are set to kick in as well as the continuation of earnings season which will include reports from Abbvie, Restaurant Brands, Lyft, Cisco, Alibaba, and many more. Today, earnings in focus include Twitter, Dunkin, Yum! Brands, and Uber. For the next 1-2 weeks, we believe the market will remain range-bound, $324-$333, and we will look for buying opportunities near $324. We remain bullish during this earnings season but expect a 1-2% correction in the next 4-6 weeks as the market loses moment. We will look to short market near $330-$333 level. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Markets are looking forward to next week’s tariff cuts as part of the U.S.-China “phase one” deal where China will cut tariffs on $75 billion worth of U.S. imports on February 14th. All three major U.S. indices remain on track to close the week with solid gains as news of the duty cuts and continued efforts to control the Coronavirus are offering some optimism following the initial wave of fear caused by the viral outbreak. Still, death and infected tolls continue to rise which has caused several retailers to shut down locations in China, including Starbucks and Nike. Also, researchers worldwide are continuing to work on treatments and vaccines. Globally, both Asian and European markets recorded solid gains today.
Earnings remain in focus today with this morning’s pre-market releases of Twitter, Philip Morris, Yum! Brands, Kellogg, Tyson Foods, and Spirit Airlines corporate earnings. After-market reports to watch for include Uber, T-Mobile, and Activision Blizzard. Twitter saw shares rise impressively, over 14%, behind strong earnings data while Dunkin’ Brands and Tyson Foods saw shares lower behind underwhelming reports. Tomorrow, additional January employment data will release; Federal Budget, Core CPI, and Retail Sales are due next week.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term positive outlook. Today’s vector figure of -0.26% moves to +1.04% 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 February 3rd, our ActiveTrader service produced a bullish recommendation for Pultegroup (PHM). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
PHM entered its forecasted Strategy A Entry 1 price range $44.65(± 0.20) in its first hour of trading that day and passed through its Target price of $45.10 in the fourth hour of trading on February 5th. The Stop Loss price was set at $44.20.
Our featured symbol for Friday is International Business Machines (IBM). IBM is showing a positive vector 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 current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $157.3 at the time of publication, with a +1.86% 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.
*Please note: At the time of publication Vlad Karpel does not have a position in the featured symbol, IBM. 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 $51.05 per barrel, up 0.61% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mostly positive signals. The fund is trading at $10.44 at the time of publication. Vector figures show -2.46% today, which turns to +2.08% 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 0.46% at $1,570.00 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive signals. The gold proxy is trading at $146.43, at the time of publication. Vector signals show +0.25% 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 down 0.01% at 1.65% at the time of publication.
The yield on the 30-year Treasury note is down 0.82% at 2.12% 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 +0.38% moves to +1.12% 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 $15.23 at the time of publication, and our 10-day prediction window shows positive 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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