Markets Rise Ahead of U.S.-China Trade Talks

October 9, 2019
By Vlad Karpel

Major U.S. benchmarks are trading higher today ahead of U.S.-China trade talks with are set to resume tomorrow. Tariff resolution and clarity regarding negotiations going forward will be key as both sides meet in D.C. this week. Today, last month’s FOMC minutes were released, providing further detail on the decision to cut interest rates as well as the Fed’s mindset going into the next FOMC interest rate decision. Tomorrow, Core CPI and Consumer Price Index for September are due to release, Consumer sentiment index on Friday. Earnings pick up with several big names next week but remain light this week, however, we will see Citigroup release earnings on Friday. The SPY continues to trade between $282-$294 and we believe the market is range-bound. Taking this into consideration, we will look to sell near $294 and buy near $282. We do not believe the market has the potential to overshoot all-time but further volatility is expected. We encourage Market Commentary readers to maintain clearly defined stop levels. For reference, the SPY Seasonal Chart is shown below:

All three major U.S. indices are on track to close in the green ahead of this week’s U.S.-China trade talks. Both sides will meet in D.C. to discuss tariffs and trade deficit concerns as additional tariffs are due to kick in soon. Trade representatives from both sides will hold formal talks for two days, though a formal deal is not expected to result yet. Look for clarity and easing tensions between the two sides to support markets as well as any developments on further talks. Globally, Asian and European markets closed to mixed results.

Also dictating markets today, the latest FOMC meeting minutes were released providing further detail on last month’s decision to cut rates. Feds certainly showed more concern than previous meetings regarding the state of the U.S. economy. Manufacture corners and slowing labor market and consumer spending indicating a softer than expected economy. In a 7-3 vote, the members of the FOMC decided to cut rates by a quarter-point. Other key reports this week include Core CPI as well as Citigroup earnings on Friday. 

Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows negative signals. Today’s vector figure of -0.54% moves to -1.19% in five 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.  


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Highlight of a Recent Winning Trade

On September 27th, our ActiveTrader service produced a bullish recommendation for Nike Inc (NKE). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.

Trade Breakdown

NKE entered its forecasted Strategy B Entry 1 price range $92.17 (± 0.50) in its first hour of trading and passed through its Target price $93.09 in the first hour of trading the following trading day. The Stop Loss price was set at $91.25.


Thursday Morning Featured Symbol

*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 Thursday 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 $24.94 at the time of publication, down 4.95% from the open with a +1.12% 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.


Oil

West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $52.71 per barrel, up 0.15% from the open, at the time of publication.

Looking at USO, a crude oil tracker, our 10-day prediction model shows negative signals. The fund is trading at $11.00 at the time of publication, up 1.01% from the open. Vector figures show -0.87% today, which turns -4.83% 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 0.64% at $1,513.50 at the time of publication.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $142.14, up 0.16% at the time of publication. Vector signals show -0.12% 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 3.29% at 1.58% at the time of publication. The yield on the 30-year Treasury note is up 2.52% at 2.08% 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 +0.23% moves to -0.93% 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. 

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 negative signals. The predicted close for tomorrow is $17.55 with a vector of -6.51%. 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.

CLICK HERE TO SIGN UP

 


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