Markets Continue Rally As China Claims No Retaliatory Tariffs 

August 29, 2019
By Vlad Karpel

Markets are trading higher following indication China is not planning on imposing retaliatory tariffs and the latest GDP revision data. China recently stated they would like to avert any further escalation and would not immediately respond to additional U.S. tariffs while GDP revision reported the U.S. economy growing at 2% annual rate. Several retailers are releasing quarterly earnings data today, including Best Buy and Dollar Tree, while tomorrow look out for July consumer spending, core inflation, and personal income data. We see the potential for the market to overshoot SPY 50-days MA, $293-$294, and will look to buy when SPY is near $278 and sell near $290. SPY support is currently at $277-$282 and we expect volatility to continue. With this in mind, we encourage our readers to have clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:

All three major U.S. indices are on track to close in the green today, continuing yesterday’s rebound. Talks of de-escalation between the U.S. and China have helped markets as the latest comments from China indicate retaliatory tariffs would not be immediately issued following any additional tariffs from the U.S. in September. While this improved sentiment heading into September, tension remains between the two nations as negotiations are due to resume in the coming weeks. Other factors contributing to the two-day rally include additional positive earnings as well as the GDP revision data. Second-quarter GDP revision report released today indicated the U.S. economy is growing at 2%, slightly down from the previously reported 2.1% but higher than the expected revision to 1.9%. Although Best Buy reported poorly, with stocks currently down 9%, most retailers who have reported thus far, including Dollar General today, have reported positively. Next week, earnings and economic reports remain light during the shortened trading week. Monday will see markets closed for the Labor Day holiday while Tuesday will feature additional manufacturing data and Wednesday will see Foreign Trade Deficit data.

Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows mixed signals. Today’s vector figure of +0.06% moves to +0.97% in five trading sessions. Prediction data is uploaded after the market close at 6pm, CST. Today’s data is based on market signals from the previous trading session.  


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Highlight of a Recent Winning Trade

On August 16th, our ActiveTrader service produced a bullish recommendation for Crown Castle International (CCI). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.

Trade Breakdown

CCI entered its forecasted Strategy B Entry 1 price range $142.41 (± 0.73) in its first hour of trading and passed through its Target price $143.83 in the first hour of trading the following trading day. The Stop Loss price was set at $137.15


Friday Morning Featured Symbol

*Please note: At the time of publication we do not own the featured symbol, HD. 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 Friday is Home Depot (HD). HD is showing a confident vector trend 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.  

The stock is trading at $226.89 at the time of publication, up 2.23% from the open with a +1.44% vector figure.

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 the next trading session relative to the average of actual prices for the 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.


Oil

West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $56.53 per barrel, up 1.36% 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 $11.78 at the time of publication, up 1.20% from the open. Vector figures show -1.02% today, which turns +0.73% 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.

Gold

The price for the Gold Continuous Contract (GC00) is down 1.01% at $1,533.50 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 $143.55, down 1.11% at the time of publication. Vector signals show +0.10% for today. 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

The yield on the 10-year Treasury note is up 1.65% at 1.51% at the time of publication. The yield on the 30-year Treasury note is up 1.97% at 1.97% 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. Today’s vector of -0.50% moves to -2.05% in three 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.

Volatility

The CBOE Volatility Index (^VIX) is down 2.61% at $22.36 at the time of publication, and our 10-day prediction window shows negative signals. The predicted close for tomorrow is $20.48 with a vector of -4.84%. 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.


Want a more manageable portfolio with fewer trades and more profits

How often do you sign up for an investment advisory and find dozens, or hundreds, of open trades in their portfolio?

It’s almost as though the guru is trying to cover all his bases by recommending every potential stock that could go up.

As an investor, it’s overwhelming: what do you focus on?

With Vlad’s system, you never have to worry about more than a handful of stocks at one time. It’s a focused approach to trading, and that means you can spend more of your brain energy on other activities without sacrificing profitability.

And there’s a unique advantage Vlad’s system has that is a must-have in this day and age…

That winning percentage doesn’t budge…
even during volatile times

CLICK HERE TO LEARN MORE


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