After markets traded lower to end last week, markets are seeing nice rebounds today off strong economic data and continued efforts to contain the coronavirus. Earnings season continues with Google parent-company Alphabet reporting earnings after market close today while tomorrow lookout for Disney, Snap, and Ford data. Additional key reports this week include Twitter, General Motors, MetLife, Kellogg, Tyson Foods, and Uber. Overseas, Chinese markets reopened after being shut down due to the coronavirus while European markets finished higher as the U.K. and European Union begin their trade negotiations. We will continue to look for buying opportunities near $320 as we believe the market will remain range-bound, between $320 and $333, for the next 2-4 weeks. With the current 50-days M.A. on the SPY at $320, the same as its support level, we remain bullish during this earnings seasons. Still, we expect a 2-5% correction in the next 4-6 weeks as the market loses momentum. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
All three major U.S. indices closed in the green today after the spread of the Chinese Coronavirus caused significant sell-offs last week. The spike in fear over the virus occurred last week as the death toll continued to rise, with growing concern in Russia and already documented spread in the Philippines. As containment efforts progress, both global and Asian markets will likely still be impacted. Stock markets in China reopened today to significant losses but the latest comments from the People’s Bank of China indicate significant injections into the economy to reverse course on the selloffs.
In the U.S., markets are focused on Q4 corporate earnings which will be feature another major week of releases after last week’s busy release schedule. Before the market opened today, Sysco released data while all eyes remain on Google’s after market-close release. Tomorrow, significant earnings data will stem from Aflac, Disney, Ford, Gilead Sciences, and Snap. Also releasing tomorrow will be December factory orders data while later this week we will see January Employment data, December Trade Deficit, and Q4 Productivity and Labor Costs.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term negative outlook. Today’s vector figure of -0.53% moves to -1.49% 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 January 10th, our ActiveTrader service produced a bullish recommendation for Apple Inc. (AAPL). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
AAPL entered its forecasted Strategy B Entry 1 price range $309.63(± 1.05) in its third hour of trading that day and passed through its Target price of $312.73 in the second hour of trading the following trading. The Stop Loss price was set at $306.53.
Our featured symbol for Tuesday is Pultegroup (PHM). PHM is showing a positive vector in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (A) indicating it ranks in the top 10th percentile for accuracy for current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $44.66 at the time of publication, with a +0.62% 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, PHM. 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 $52.91 per barrel, down 0.81% 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 $11.08 at the time of publication. Vector figures show +0.63% today, which turns to +4.55% 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 0.12% at $1,572.30 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows negative signals. The gold proxy is trading at $148.47, at the time of publication. Vector signals show -0.81% 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 up 0.27% at 1.59% at the time of publication.
The yield on the 30-year Treasury note is up 0.87% at 2.05% 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 +042% moves to +2.20% 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 $14.85 at the time of publication, and our 10-day prediction window shows mixed 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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