Markets Rebound With Global Clarity and Positive U.S. Beige Book

September 4, 2019
By Vlad Karpel

Major U.S. indices are rebounding nicely today behind easing global tensions and clarity regarding Brexit and China. Yesterday, manufacturing data weighed on U.S. markets while progress overseas supported global markets. Parliament voted to take control of the parliamentary schedule from Prime Minister Boris Johson, giving them the opportunity to delay Brexit deadline by a couple of months. Elsewhere, China-Hong Kong relations have eased with a new monetary stimulus plan which helped both markets close in the green. In the next few weeks, we will see monetary policy decision from both the U.S. Federal Reserve and the European Central Banks which will surely influence markets while this week look for the U.S. Beige Book, released today, and August employment data on Friday. The SPY is currently trading between $277-$282 and we see the potential for the market to overshoot its 50-days MA at $293. With further volatility expected, we will look to buy when SPY is near $278 and sell near $290. Clearly defined stop levels for all positions are strongly encouraged. For reference, the SPY Seasonal Chart is shown below:

All three major U.S. indices were on track to close in the green today ahead of today’s Beige Book release and remained so after its release. The Fed-released Beige Book provides a good reading of the current state and outlook of the U.S. economy. Sentiment regarding the report is modestly positive with most sectors either remaining steady or improving. Growth remains at 2% and the economy is holding a modest pace of expansion with employment, wages, and prices rising. Other key reports this week include Foreign Trade Deficit today while Thursday will see several manufacturing reports. Friday will be headlined by monthly labor data. Earnings remain slim this week with only a few notable names such as Lululemon and Slack. 

Overseas, markets have also rebounded following positive reports from the U.K. and China. Hong Kong and Chinese markets saw nice gains after new stimulus efforts were unveiled. With easing tension in Hong Kong markets grew over 3% while China saw nearly a 1% increase today.  In the U.K., Parliament regained the power to set parliamentary schedule following claims PM Johnson was interested in putting Parliament on pause ahead of the upcoming Brexit deadline. With the vote going through, Parliament will now look to extend Brexit deadlines further to improve their planned exit. In the coming weeks, the European Central Bank and the Federal Reserve will vote on monetary policy updates which will certainly affect markets. 

Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows mixed signals. Today’s vector figure of +0.27% moves to -0.66% in five trading sessions. The predicted close for tomorrow is 2,926.72. Prediction data is uploaded after the market close at 6pm, CST. Today’s data is based on market signals from the previous trading session.  


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Highlight of a Recent Winning Trade

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


Thursday Morning Featured Symbol

*Please note: At the time of publication we do not own the featured symbol, EA. 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 Thursday is Electronic Arts Inc (EA). EA 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 $97.08 at the time of publication, up 2.41% from the open with a +0.51% 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.


Oil

West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $56.24 per barrel, up 4.26% from the open, at the time of publication.

Looking at USO, a crude oil tracker, our 10-day prediction model shows positive signals. The fund is trading at $11.7 at the time of publication, up 4.28% from the open. Vector figures show 2.13% today, which turns +3.63% 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.

Gold

The price for the Gold Continuous Contract (GC00) is up 0.49% at $1,562.30 at the time of publication.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mostly positive signals. The gold proxy is trading at $146.55, up 2.36% at the time of publication. Vector signals show +0.18% 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.

Treasuries

The yield on the 10-year Treasury note is up 0.11% at 1.46% at the time of publication. The yield on the 30-year Treasury note is up 0.53% at 1.96% 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. Today’s vector of -0.21% moves to +0.53% in four 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.

Volatility

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 $18.96 with a vector of -2.05%. 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.


Sign up now for Lifetime Access and pay less than the cost of just 1 year and lock in …
PERMANENT UNLIMITED ACCESS!

  • Subscribe now for less than the cost of one year at the regular rate!

  • With 36 month trailing gains of 1,342%, and an 75% win-rate, a lifetime Membership could easily turn $100,000 into $1,442,193

  • Tradespoon Premium is the only trading service you’ll ever need.

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