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Major U.S. indices were on track to close in the red following the release of the latest manufacturing data and the inversion of the ten and two-year bonds but have since reversed course with the Dow and S&P in the green. Yesterday, stocks recorded gains off positive retail earnings and FOMC minutes which shed light on the latest interest rate cut as well as the possibility of future ones. Fed Chair Jerome Powell will speak in Wyoming tomorrow during the central bank’s annual symposium while overseas the yuan has fallen to a multi-year low as U.S-China tension continues to weigh on markets. Currently, SPY short term support sits at $277-$282 and we see the potential for the market to overshoot 50-days MA on SPY which would be around $293-$294 level. With the current market conditions in mind, we encourage Market Commentary readers to have clearly defined stop levels for all positions. Volatility remains and we will look to sell when the market is near $290 and buy near $278 for the SPY. For reference, the SPY Seasonal Chart is shown below:
After rising yesterday and early today, all three major U.S. indices turned negative behind underwhelming manufacturing data and the ten and two-year treasuries inverting. Since then, the S&P and Dow have turned modestly positive. Unemployment data from last week showed a continued decrease in applications for unemployment benefits, supporting markets behind a strong labor market. Salesforce, Ross Stores, and HP all report after the closing bell today while next week look for several key economic reports including core inflation, consumer spending, GDP revision, and durable goods orders for July.
All eyes will be on Powell’s speech at the central bank’s symposium tomorrow. The speech should provide further insight into the Fed’s recent moves as well as where the Fed is headed. Next month’s FOMC is highly speculated to have another interest rate cut while further data continues to be parsed from yesterday’s FOMC minutes from July’s meeting. Globally, European markets closed lower while Asian markets were mixed. China’s yuan fell today to an 11-year low while U.S.-China trade tension continues to weigh on global markets. Next month, China trade representatives will head to D.C. to continue negotiations.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows positive signals. Today’s vector figure of +0.21% moves to +1.18% in five trading sessions. Prediction data is uploaded after the market close at 6 pm, CST. Today’s data is based on market signals from the previous trading session.
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
*Please note: At the time of publication we do own 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.
Our featured symbol for Friday is iPath S&P 500 VIX Short Term (VXX). VXX 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 $25.68 at the time of publication, up 1.50% from the open with a -1.18% 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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $55.40 per barrel, down 0.50% 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 $11.5 at the time of publication, down 0.95% from the open. Vector figures show -0.79% today, which turns -0.56% 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.
The price for the Gold Continuous Contract (GC00) is down 0.44% at $1,508.80 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows negative signals. The gold proxy is trading at $141.41, down 0.25% at the time of publication. Vector signals show -0.21% 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.
The yield on the 10-year Treasury note is up 1.01% at 1.61% at the time of publication. The yield on the 30-year Treasury note is up 1.18% at 2.10% 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 -0.27% moves to -0.54% 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.
The CBOE Volatility Index (^VIX) is down 2.61% at $22.36 at the time of publication, and our 10-day prediction window shows mixed signals. The predicted close for tomorrow is $16.69 with a vector of +5.90%. 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.
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