Markets push forward into the final fed rate hike

December 13, 2017
By Vlad Karpel

Major U.S. indices are breaching record territory today as investors look toward today’s anticipated Fed interest rate hike announcement.  8 out of 11 industry sectors are up, led by technology shares. The energy, telecom and financial sectors were excluded from the gains. On the economic data front, we saw the consumer price index gain 0.4% for the month of November, although this is mainly attributed to hiked gas prices. Barring food and energy costs, the core rate of inflation gained only 0.1%. This is a more accurate indicator, so the figures were somewhat disappointing to investors. As a result, the U.S. dollar and treasury bond yields were sent lower.

In premarket trading, stock futures had dipped following news of a Doug Jones (D-AL) victory in the special senate election in Alabama. It was initially thought that an additional Democrat filling a Senate seat may hamper the passing of the tax-reform bill. It is likely that GOP lawmakers will be able to pass the legislation within a week’s time- before Jones joins the Senate in Washington.

At the time of publication, the DJIA is up 0.55%, or 135.08 points, at 24,639. The S&P 500 is trading at 2,670- up 0.21% from the open. The Nasdaq-100 is up 0.36% at 6,887.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows  consistent positive signals. Today’s positive vector figure of +0.10% moves to +0.56% within three trading sessions.  Today’s predicted support and resistance is 2,662.99 (± 3.74) and 2,669.76 (± 3.75), respectively. The predicted close today is 2,669.48. 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.  (INSERT GSPC CHARTS)

Highlight of a Recent Winning Trade

On December 4, our ActiveInvestor service- which is included in our Tools and Premium membership plans- generated a bullish trade for Caterpillar Inc. (CAT). Our ActiveInvestor service is designed for swing trading.

Trade Breakdown

CAT hit the Entry 1 ($140.02, ± 0.50) price range between 12/5 and 12/6 before gradually rising into this week. Today, 12/13, the stock moved through its Target of $147.02. The Stop Loss was set at $133.02.

 

Must-buy Stock for Thursday

Our must-buy stock for Thursday is Boeing Co. (BA). This defense and aerospace stock is continuing a bullish trend in our Stock Forecast Toolbox’s 10-day forecast. BA is assigned a Model Grade of B, indicating it ranks in the top 25th percentile for accuracy relative to our entire data universe. Our 10-day prediction model shows vector figures climbing above +2.50% within the next two trading sessions. Our benchmark for vector figures is +1.00%.

*Please note: Our must-buy stock is not part of any recommendation service included in a paid Tradespoon subscription plan. In order to review our Premium Member Picks, ActiveTrader or ActiveInvestor recommendations, please click here and select the most recent releases.

The stock is trading at $293.93 at the time of publication, up 1.38% from the open with a +1.40% vector figure.

Thursday’s  prediction shows an open price of $289.87, a low of $288.01 and a high of $295.85.

The predicted close for Thursday is $293.56. Vector figures show +0.75% for tomorrow and builds incrementally throughout the forecast.  This is a good signal for trading opportunities, because the vectors are a primary factor in determining price movements for stocks and ETF.

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 next trading session relatively to average of actual prices for last trading session. The column shows expected average price movement “Up or Down”, in percent. Trend traders should trade along predicted direction of the Vector. The higher the value of the Vector the higher its momentum.

 



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Oil

Crude prices were finding support earlier today in OPEC output and U.S. supplies data, but have since slid on concerns over rising U.S. production. OPEC member-country output levels dropped to a six-month low, and U.S. inventories dropped farther than expected. Today saw an indication from the OPEC report that U.S. output is ramping up at a pace more rapid than expected, which is dampening bullish market sentiments.

West Texas Intermediate for January delivery is priced at $56.77 per barrel at the time of publication, down 0.68% from the open.  

Looking at USO, a crude oil tracker, our 10-day prediction model shows consistent negative signals. The fund is trading at $11.34 at the time of publication, down 0.87% from the open. Today’s prediction sees support at $11.30 (± 0.06) and resistance at $11.63 (± 0.06). The predicted close for today is $11.32. Vector figures show -0.86% today, moving to -0.49% in three 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 February gold is up 0.47% at $1,248.00 a troy ounce at the time of publication. Investors are rotating into the non-fiat metal ahead of the Fed interest-rate announcement today, and taking advantage of a weaker U.S. dollar. Expect these gains to see a negative correction, however, following the hike’s recuperative effect on the greenback and treasury yields.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows strong negative signals. The gold proxy is trading at $118.29, up 0.12% at the time of publication. Today’s predicted low is $116.74 (± 0.23) and the predicted high is $118.15 (± 0.23). The predicted close today is $117.34. 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

Yields are sliding today following disappointing inflation indicators, a continuing struggle for investors who do not see inflation reaching the Fed’s 2% goal anytime soon. At the same time, market participants are awaiting today’s widely expected interest rate announcement from Fed Chairwoman Janet Yellen. Although the third and final rate hike for 2017 is locked in, many are uncertain about future projections for further hikes. Disappointing economic data will likely weigh on the dot plot, which is due to be released today. The yield on the 10-year Treasury note is down 1.08% at 2.38% 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 consistent positive signals in our 10-day prediction window. Today’s vector of +0.15% moves to +0.36% tomorrow and oscillates in positive territory throughout the forecast. The ETF is priced at $126.87 at the time of publication, up 0.39%. The predicted close today is $126.45 with a low and high of $125.96 (± 0.23) and $126.62 (± 0.23), respectively.  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.

 

Cryptocurrencies

We’re seeing a pullback today In the third trading day for U.S. Bitcoin futures. A January contract launched Sunday by the CBOE at $15,000 closed on Tuesday at $18,020. CBOE Bitcoin for January 2018 is currently down 3.44%, or $620.00, at $17,860 at the time of publication. In the nascent stages of cryptocurrency futures, we can expect to see these sharp swings as markets adjust to this new asset. For the near-term, Bitcoin will serve as a standard for cryptocurrencies before others join its ranks in major indices and exchanges. Take note of CME Group Inc. (CME), which will debut their own Bitcoin futures contract on Monday. CME Group is considered a rival of CBOE.

Using Grayscale’s Bitcoin Investment Trust (GBTC) as a Bitcoin tracker in our Stock Forecast Toolbox, we see a sharp upturn in our 10-day prediction window. Today’s vector of +1.54% moves to +34.22% tomorrow and continues strong throughout the forecast. The trust is priced at $2,121.01 at the time of publication, down 6.69%. The predicted close today is $2,550.33 with a low and high of $2,223.04 (± 203.77) and $2,585.86 (± 237.03), respectively.  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 0.71% from the open at 9.85 at the time of publication, and our 10-day prediction window shows overall positive movement.  The predicted close today is 10.24 with a positive vector of +3.66%, which moves to +12.11% in three trading sessions. Today’s predicted lows and highs are 9.92 (± 0.22) and 10.82 (± 0.24), respectively. 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.

 



Here’s where I put my money where my mouth is!

Click here for my daily recommendations & research tools!

 


 


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