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All three major U.S. indices are on track to close in the green and reaching record highs behind strong corporate earnings, phase one of the U.S.-China trade agreement, and the recently released October labor data. While the preliminary deal may not yet be signed, both the U.S. and China have continued to show signs of progress and easing tensions. On Friday, last month’s labor data showed growth above expectations which has helped markets rise, along with support from positive quarterly corporate earnings. Today, Uber and Marriott report after the market close while this week will also feature earnings from Qualcomm, CVS, Square Inc., Disney, Marathon Oil, and Duke Energy. With little evidence the market will retest its 200 days MA, we will look to buy when the market is near $297 for the SPY and follow the semiconductor sector through the strong seasonal trend. Overhead resistance is near $310 level, having just recently broken through the 52 weeks high. Further volatility is expected, but we also expect shallow pullbacks; as always, we recommend readers maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
As continued signs of easing the tension between the U.S. and China mount, global trade sentiment has begun supporting markets with growing optimism. Still, most are not expecting a signed deal this month but as the two sides continue the dialogue, it is clear phase one of the deal is in process and by far the furthest the sides have come since the trade war began. Both sides will look to hold off on additional tariffs for now as we approach several December deadlines. Overseas, Asian markets, apart from Japan, closed in the green while European markets saw unanimous growth. The latest Brexit-E.U. extension has eased concerns of a troublesome or rushed Brexit as Prime Minister Boris Johnson and Parliament continue working on a deal.
Apart from U.S.-China news, third-quarter corporate earnings continue to dictate markets. Last week’s large load of big-name reports will be followed up this week with data from Chesapeake Energy, CVS, Square, Marathon Oil, Fox, Activision Blizzard, Disney, Booking Holdings, and Qualcomm. Uber, Marriott International, and Shake Shack will release their data after the market close today. Berkshire Hathaway reported strong third-quarter earnings last Friday which are continuing to support shares today while Under Armour, which released before the market open today, saw shares plummet over 15% behind weak data. Shares of McDonald’s are down today after the fast-food chain announced it has fired its CEO. Beyond earnings, key economic reports this week will include Trade Deficit, Q3 Productivity, September Consumer Credit, and November Consumer Sentiment Index.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows positive signals. Today’s vector figure of +0.13% moves to +0.91% in five 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 October 31st, our ActiveTrader service produced a bullish recommendation for Illinois Tool Works Inc. (ITW). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading. Signals are meant to last for 1-2 days as long as vector confirms the same direction as the original pick
Trade Breakdown
ITW entered its forecasted Strategy B Entry 1 price range $170.21 (± 1.03) in its first hour of trading the following trading day (11/1/19) and passed through its Target price of $171.91 in the first hour of trading the next day (11/2/19). The Stop Loss price was set at $168.51.
*Please note: At the time of publication we do not own the featured symbol, ETN. 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 Tuesday is Eaton Corporation (ETN). ETN is showing a confident vector trend 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 predicted support and resistance, relative to our entire data universe.
The stock is trading at $90.75 at the time of publication, up 4.18% from the open with a +0.36% 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 $56.99 per barrel, up 1.41% 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 $11.9 at the time of publication, up 1.80% from the open. Vector figures show +1.25% today, which turns -0.43% in five 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 down 0.15% at $1,509.00 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mostly positive signals. The gold proxy is trading at $142.09, down 0.33% at the time of publication. Vector signals show +0.20% 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 4.35% at 1.79% at the time of publication. The yield on the 30-year Treasury note is up 3.62% at 2.27% 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 negative signals in our 10-day prediction window. Today’s vector of -0.28% moves to -1.24% 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 up 3.33% at $12.71 at the time of publication, and our 10-day prediction window shows mixed signals. The predicted close for tomorrow is $12.78 with a vector of +3.64%. 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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