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Major U.S. indices are on track to close in the green today after seeing sharp losses earlier in the week sparked by the U.S. treasury yield curve inverting and continued tension between U.S.-China. Positive retail data and strong earnings from Walmart have helped markets today while tariff uncertainty continues to weigh on futures and treasuries. Global markets remain focused on U.S.-China relations, Brexit, and the protests in Hong Kong. Today’s earnings include chipmaker Nvidia and Applied Materials after the market closes while next week several retailers are still due to release earnings along with FOMC minutes on Wednesday. SPY short term support currently sits at $277-$280 and we see the potential for the market to overshoot 50-days MA on SPY, around $293-$294 level. With likely continued volatility, we encourage Market Commentary readers to have clearly defined stop levels for all positions. With this in mind, we will look to buy near $278 and sell when the market is near $290 for the SPY. For reference, the SPY Seasonal Chart is shown below:
Markets saw slight rebounds following a volatile start to the week that had most sectors lower as U.S. Treasury yield curve inverted while China-U.S. trade tensions heightened. Primarily helping the rebounds were the recently released monthly retail data and Walmart earnings which both returned positive. Next week, several big-name retailers will release earnings including Home Depot, Lowe’s, Dick’s Sporting Goods, and Target. Key economic reports will include last month’s FOMC minutes, new and existing home sales. With most earnings having already released the next key event which could affect markets will likely be the September meeting between U.S. and China trade representatives in Washington. Further tariffs from the U.S. have been pushed back from September to December while recent reports have stated China would retaliate with their own tariffs if further tariffs are initiated. Globally, Asian markets closed to mixed results while European markets were mixed.
Although major indices have rebounded slightly futures and treasury yields remain low with the 30-year note below 2%. Along with the 30-year note, the 10 and 2-year notes have also lowered below this level creating some cause for alarm. Similarly, several global treasuries have also seen declines in bonds. Tariff and trade relations will likely continue to be the biggest factors while next week’s FOMC minutes could provide some further details regarding last month’s interest rate cut.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows mixed signals. Today’s vector figure of -0.97% moves to +0.639% 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 1st, our ActiveTrader service produced a bullish recommendation for Entergy Corp (ETF). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
ETR entered its forecasted Strategy B Entry 1 price range $105.62 (± 0.23) in its first hour of trading and passed through its Target price $106.68 in the second hour of trading that day. The Stop Loss price was set at $104.56
*Please note: At the time of publication we do own the featured symbol, VXX. We are long on 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 (C) indicating it ranks in the top 50th percentile for accuracy for predicted support and resistance, relative to our entire data universe.
The stock is trading at $29.72 at the time of publication, down 2.46% from the open with a +0.56% 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 $54.63 per barrel, down 1.09% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mostly positive signals. The fund is trading at $11.31 at the time of publication, down 1.14% from the open. Vector figures show +0.22% today, which turns +0.65% 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 up 0.31% at $1,532.50 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 $143.45, up 0.49% at the time of publication. Vector signals show +0.60% 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 down 3.20% at 1.53% at the time of publication. The yield on the 30-year Treasury note is down 1.77% at 1.98% 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 positive signals in our 10-day prediction window. Today’s vector of +0.39% moves to +2.98% 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 3.71% at $21.28 at the time of publication, and our 10-day prediction window shows mixed signals. The predicted close for tomorrow is $20.68 with a vector of -4.48%. 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.
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