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All three major U.S. indices are on the move up today ahead of Fed Chair Powell’s congressional testimony as well as the tail end of the latest corporate earnings season. Over in China, the Coronavirus continues to grow as the latest strain of the virus spread to an additional 2,000 cases and has elapsed 1,000 in the death toll. President Xi addressed these latest concerns by ensuring continued economic growth while also advancing preventative and vaccine efforts. Additional data in focus includes European manufacturing reports, which returned lower than expected, as well as U.S. job openings which also dipped. Earnings to track for the remainder of the week include Alibaba, Cisco, CVS, Kraft-Heinz, PepsiCo, and Waste Management. Currently, SPY support remains near $330 level and we will continue looking for buying opportunities near $330. We expect a shallow 1-2% correction in the marker next 4-6 weeks. At this point, the bull market has resumed and started to rally a couple of weeks earlier than we expected. Keep an eye on treasury and gold levels. Despite the broad-based rally, gold and treasure and U.S. dollar remain at elevated levels. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Markets continued to trade higher today nearing record territory with support from strong earnings. Today, CVS reported earnings ahead of the market open while Cisco, Applied Materials, and MGM Resorts are set to report after the market close. Key economic reports showed a slight dip in U.S. job openings although the latest ADP reports showed and increased in private sector jobs. Earnings to monitor tomorrow include Alibaba, Nvidia, PepsiCo, Duke Energy, and Waste Management. Economic reports on deck include January Consumer Price Index and Core CPI tomorrow, Retail Sales and Industrial Production on Friday.
Globally, both Asian and European markets closed in the green. China continues to deal with the Coronavirus outbreak as a new strain has increased the number of infected and deaths. Still, Chinese President Xi vowed to continue economic growth and expansion; February 14th marks the date several key duties will be lifted as part of the “phase one” U.S.-China trade deal. European manufacturing data severely underwhelmed with global markets bracing for further Coronavirus impact. Elsewhere, Fed Chair Jerome Powell concluded his second day of congressional testimony in D.C. with the overwhelming sentiment the U.S. economy is in a “very good place.”
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 +0.25% moves to +2.32% 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.
Trade Breakdown
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 Thursday is Netflix Inc (NFLX). NFLX is showing a positive 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 $379.11 at the time of publication, with a -0.23% 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, NFLX. 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 $49.64 per barrel, down 1.35% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mostly negative signals. The fund is trading at $10.58 at the time of publication. Vector figures show -0.19% today, which turns to -1.35% 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 0.18% at $1,576.20 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 $147.79, 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 1.25% at 1.56% at the time of publication.
The yield on the 30-year Treasury note is down 0.78% at 2.03% 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 +0.13% moves to -1.14% 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 $15.02 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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