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Today, all three major U.S. indices were able to record solid gains of over 3% while oil and gold saw continued pressure. COVID-19 developments are likely to continue impacting markets as last week’s massive economic stimulus plan goes into effect and global efforts are made towards slowing the spread. Overseas, Asian markets closed in the red while European markets were able to hold on to small gains. Several companies, including Johnson & Johnson and Gilead Sciences, have released multi-phase timelines for a vaccine rollout with projected trials ranging from Q3 2020 to Q1 2021. Last week, most asset classes were able to sustain multi-day rallies indicating the bottoming process has started. Markets broke through their December 2018 lows and are susceptible to another 10-20% selloff from the current SPY level. It appears the worst part of the selloff is over and long-term investors can consider buying equities with dollar-cost averaging in mind. Still, the market in the short term is overbought and probably will selloff at $260-$280 SPY levels.VIX, GLD, DXY, and TLT are stabilizing and we could see the market reaching its low point by the first week of April. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Following several days of trading higher last week in anticipation of the economic stimulus package, the bill passed on Friday. The selloff was partially halted, with two days of higher highs and higher lows, indicating the bottom process has started. This week, the focus turns to slowing the spread as several corporations unveiled their multi-phase vaccine timelines. Companies currently working on a vaccine or treatment efforts include Gilead Sciences, Inovio Pharmaceuticals, Johnson & Johnson, Moderan, Roche Holdings, and Pfizer. Most saw shares rise while commodities such as oil and gold continued to sell-off. Treasuries remained under pressure while the dollar modestly rose. Elsewhere, the retail impact of the virus is continuing to be felt with major shutdowns and furloughs in place. Look for additional updates on COVID-19 during the daily White House briefings after market close.
Key U.S. Economic Reports Out This Week:
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term negative outlook. 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 March 20th, our ActiveTrader service produced a bullish recommendation for Southwestern Energy Company (SWM). ActiveTrader is included in several Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
SWM entered its forecasted Strategy A Entry 1 price range $2.03(± 0.02) in the second hour of trading that day and passed through its Target price of $2.05 in the final hour of trading that day. The Stop Loss price was set at $2.01.
Our featured symbol for Tuesday is Ipath S&P 500 VIX Short-Term Futures (VXX). VXX is showing a steady 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 $48.63 at the time of publication.
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 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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $20.28 per barrel, down 5.72% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows negative signals. The fund is trading at $4.23 at the time of publication. 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.
Gold
The price for the Gold Continuous Contract (GC00) is down 0.65% at $1643.30 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive signals. The gold proxy is trading at $152.92, at the time of publication. Vector signals show +1.24% 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 to 0.722% at the time of publication.
The yield on the 30-year Treasury note is down to 1.342% 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. 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.
Volatility
The CBOE Volatility Index (^VIX) is $57.08 at the time of publication, and our 10-day prediction window shows negative 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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