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Markets traded lower in early morning trading after the latest reports regarding “phase one” of the U.S.-China trade deal delayed the finalized agreement until December, with both sides looking for additional meetings to continue negotiating the terms of the deal. Also in the spotlight this week are the latest big-name corporate earnings including Qualcomm, Square, and Marathon Oil reporting after the market close today. Shares of HP Inc. and Xerox are up today after Xerox announced their cash-and-stock offer for HP; CVS and Humana both saw shares rise after their third-quarter earnings topped expectations. Also released today were Q3 Productivity and Unit Labor Cost data while tomorrow September Consumer Credit report is due along with weekly employment reports. Having just recently broken through the 52 weeks high for the SPY, we will look to buy when the SPY is near $297 and continue following the semiconductor sector as we approach a strong seasonal trend. Overhead resistance is near $310 level and there is little evidence the market will retest its 200 days MA. Further volatility is expected, but we also expect shallow pullbacks; as always, we recommend readers maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
All three major U.S. indices are on track to close with slight losses after the latest U.S.-China development forecast a possible delay in signing of the deal, pushing it back as far as December. Additional news that seemed to lower optimism was that both sides were searching for venues to hold additional talks before the signing. Still, the news of “phase one” propelled markets to record highs earlier this week and should be a positive going forward. Globally, Asian markets were mixed with Chinese markets trading lower, while European markets closed in the green. Apart from “phase one” another two additional stages of deals are likely needed as both sides will look to further address structural issues and the trade deficit.
With earnings season winding down, only several big-name third-quarter reports are still due. Earlier today we saw data from CVS and Humana which propelled shares of both companies higher, while later today we will see earnings from Marathon Oil, Roku, Square Inc., and Qualcomm. Tomorrow, Walt Disney Company and Booking Holdings will headline earnings released, with Keurig-Dr. Pepper, Activision Blizzard, and Dish Network also releasing Q3 data. The latest merger news features Xerox’s announcement of a cash-and-stock offer for the computer and printer maker HP. Additional data to look out for this week includes tomorrow’s release of last week’s labor data, while Friday will feature November Consumer Sentiment Index.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows mixed signals. Today’s vector figure of -0.18% moves to +1.61% 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.
On October 31st, our ActiveTrader service produced a bullish recommendation for Illinois Tool Works Inc. (ITW). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading. Signals are meant to last for 1-2 days as long as vector confirms the same direction as the original pick
Trade Breakdown
ITW entered its forecasted Strategy B Entry 1 price range $170.21 (± 1.03) in its first hour of trading the following trading day (11/1/19) and passed through its Target price of $171.91 in the first hour of trading the next day (11/2/19). The Stop Loss price was set at $168.51.
*Please note: At the time of publication we do not own the featured symbol, CL. 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 Colgate-Palmolive Co. (CL). CL 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 $66.8 at the time of publication, up 1.27% from the open with a +0.49% 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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $56.32 per barrel, down 1.57% 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 $11.76 at the time of publication, down 1.42% from the open. Vector figures show -0.62% today, which turns -1.00% in five 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 0.63% at $1,492.90 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive signals. The gold proxy is trading at $140.55, up 0.50% at the time of publication. Vector signals show +0.20% 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 down 2.62% at 1.81% at the time of publication. The yield on the 30-year Treasury note is down 1.87% at 2.30% 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 +0.11% moves to +1.97% 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 down 0.61% at $13.02 at the time of publication, and our 10-day prediction window shows mixed signals. The predicted close for tomorrow is $13.41 with a vector of +2.24%. 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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