Markets step back after leaps and bounds as earnings mount up this week

Following a series of record highs last week, markets are pulling back some as investors prepare for another round of earnings reports this week. There are no major events driving the markets today. We’re seeing some aversion to equities at the moment as treasury yields climb to relative highs. With the 10 year bond yield hitting its highest level since April of 2014, market participants can see stocks as relatively more risky. We’ll see a State of the Union address from President Trump on Tuesday, as well as a Fed policy statement on Wednesday.

At the time of publication, the DJIA is down 0.38%, or 101.88 points, at 26,515.61. The S&P 500 is trading at 2,862.47- down 0.36% from the open. The Nasdaq-100 is down 0.28% at 7,484.55.  

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows  an uptrend. Today’s positive vector figure of +0.67% moves to +1.03% within three trading sessions.  Today’s predicted support and resistance is 2,862.48 (± 3.11) and 2,892.66 (± 3.14), respectively. The predicted close today is 2,887.94. 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.  

Highlight of a Recent Winning Trade

On January 26, our ActiveTrader service- which is included in all paid Tradespoon membership plans- generated a trade recommendation for Anthem, Inc.  (ANTM). Our ActiveTrader service is designed for intraday trading.

Trade Breakdown

ANTM moved through the Entry 1 ($251.35, ± 0.68) range in the first hour of trading, and to hit our Target Price of $253.86 in the fourth hour of the session. The Stop Loss was set at $248.84.

Buy, Buy, Buy: Stock Signals for Tuesday

Our featured stock for Tuesday is Goldman Sachs Group, Inc. (GS). GS is showing signals for a sharp rise 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. Our 10-day prediction model shows vector figures rising above +3.40% within the next three trading sessions. Our benchmark for vector figures is +1.00%.

*Please note: Our featured stock 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 ActiveInvestor recommendations.  If you are interested in receiving Vlad’s personal picks, please click here.

The stock is trading at $272.00 at the time of publication, up 1.44% from the open with a +0.83% vector figure.

Tuesday’s  prediction shows an open price of $272.78, a low of $272.28 and a high of $275.27.

The predicted close for Tuesday is $274.19. Vector figures rise to +3.45% in three trading sessions and build throughout the forecast.  This is a good signal for trading opportunities, because we use vectors as 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.

Oil

Crude prices are seeing downward pressure as U.S. domestic production ramps up to exploit recent gains in prices. Active rig counts reported by Baker Hughes Inc. (BGHE) are mirroring expectations of a production hike, and investors will await EIA reports on Wednesday to confirm.  An OPEC production cut extension, assorted geopolitical tensions and higher demand have sent prices up to relative highs in previous weeks.  

West Texas Intermediate for March delivery (CLH8) is priced at $65.50 per barrel at the time of publication, down 0.94% from the open.  

Looking at USO, a crude oil tracker, our 10-day prediction model shows overall positive signals with short-term negative signals. The fund is trading at $13.12 at the time of publication, down 0.90% from the open. Today’s prediction sees support at $12.99 (± 0.04) and resistance at $13.31 (± 0.04). The predicted close for today is $13.27. Vector figures show +0.13% today, sliding to -0.37% in three trading sessions before correcting upward. 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 (GCG8) is down 1.11% at $1,339.30 a troy ounce at the time of publication. A strengthening dollar, rising treasury yields and incoming economic and monetary policy information is pushing the non-fiat metal down today. An updated Fed policy statement is due Wednesday, and nonfarm payroll data for January will be released on Friday. Solid data will sway investors from the safe-haven metal as a risk-on attitude prevails in sight of economic strength.  

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows near term volatility. The gold proxy is trading at $127.31, down 0.59% at the time of publication. Today’s predicted low is $128.07 (± 0.21) and the predicted high is $129.90 (± 0.21). The predicted close today is $128.49. 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 continuing the upward trend today, following an impressive data showing the United States GDP grew at a 2.6% annual rate in Q4. Investors are also expecting a sharp increase in bond issuance from the Treasury Department, which will be indicated in an upcoming quarterly refunding announcement. The yield on the 10-year Treasury note is up 2.74% at 2.70% 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 slight positive signals with some negative corrections in our 10-day prediction window. Today’s vector of +0.16% moves to -0.39% in three trading sessions.  The ETF is priced at $122.82 at the time of publication, down 0.77%. The predicted close today is $124.22 with a low and high of $122.86 (± 0.23) and $124.58 (± 0.40), 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

Bitcoin prices have dropped today but still remain range-bound between $12,000 and $10,000. News broke over a hacking theft at Tokyo-based exchange Coincheck, in which 532 million units of virtual currency was stolen. The total value of tokens stolen from the NEK blockchain amounted to 46.3 billion yen, or $426 million. This breach ranks as the most severe since the 2014 Mt. Gox theft in which $450 million worth of bitcoin was stolen.   

The spot price for a single bitcoin (BTCUSD) is down 4.38% at $11,245.48 at the time of publication. CME’s February futures contract for bitcoin (BTCG8) is up 2.42% at $11,195.00 at the time of publication.

Grayscale’s Bitcoin Investment Trust (GBTC) is used as a Bitcoin tracker in our Stock Forecast Toolbox, but we will not feature data today because our models are adjusting to the weekend split. Grayscale initiated a 91-for-1 split over the weekend, drastically reducing the price per share. The company announced the split in January after the stock passed a $1,000 mark. 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, which occurred before the split, therefore it is presenting previous prices.

Volatility

The CBOE Volatility Index (VIX) is up 14.89% from the open at 12.73 at the time of publication, and our 10-day prediction window shows overall negative signals. The predicted close today is 11.87 with a negative vector of -1.24%.  Today’s predicted lows and highs are 11.42 (± 0.19) and 12.72 (± 0.22), 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.