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With the current selloff, we expect the markets to trade in the range of $320-$335 for the next 2-3 weeks. The top is currently set at $340 and we encourage readers to consider going long near $320, short near $335. All thee major indices are trading significantly lower today and the Dow is set for its 2nd-worst point dropoff ever. Growing concerns that the Coronavirus could become a global pandemic are mounting as areas outside of China continue to report infections. Global markets are seeing dips in both Europe and Asia as the newest cases of the disease have been linked to Japan and Italy. This week, we will see GDP and inflation data on Thursday while retail earnings take the spotlight with Macy’s, Home Depot, Lowe’s, TJX Companies, and Best Buy set to report. Additional key corporate earnings reports will come from HP, Salesforce, Booking Holdings, and Cronos Group. Still, we are expecting a shallow 1-2% corrections in the next 4-6 weeks and, as always, Market Commentary readers should maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
The current Coronavirus situation has caused major selloffs globally as nations outside of China have begun worrying over a global pandemic. Cases of the virus have been reported in Iran, Japan, and Italy, outside of China, as containment and vaccine efforts have yet to find solid progress. With the death toll over 2,000 and a quickly accelerating infection rate, many are worried at how this could continue impacting global markets with possible disruptions. The World Health Organization has declined to take formal pandemic procedures but continues to monitor the spread of disease. Look for additional statements and updates from the WHO in the coming weeks.
This week’s key economic report will release on Thursday with Q4 GDP which will shed light on inflation and additional key economic levels. Additional key reports to release this week include January New Home Sales on Wednesday, Personal Income and Consumer Spending on Friday. After the market-close today HP will report their corporate earning while tomorrow lookout for data from Salesforce, Home Depot, and Macy’s. Lowe’s, TJX Companies, Square, Etsy, Booking, and Marriot International report on Wednesday while Cronos Group, Best Buy, TD Ameritrade, and Foot Locker round out the week of earnings.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term positive outlook. Today’s vector figure of +0.10% moves to +0.02% 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 February 3rd, our ActiveTrader service produced a bullish recommendation for Pultegroup (PHM). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
PHM entered its forecasted Strategy A Entry 1 price range $44.65(± 0.20) in its first hour of trading that day and passed through its Target price of $45.10 in the fourth hour of trading on February 5th. The Stop Loss price was set at $44.20.
Our featured symbol for Tuesday is Wal-Mart Stores (WMT). WMT 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 $118.58 at the time of publication, with a +0.53% 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, WMT. 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 $53.77 per barrel, up 0.90% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $11.18 at the time of publication. Vector figures show +0.94% today, which turns to +3.12% 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 0.72% at $1,623.40 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 $151.79, at the time of publication. Vector signals show -1.16% 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 2.76% at 1.52% at the time of publication.
The yield on the 30-year Treasury note is down 2.27% at 1.97% 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 mostly negative signals in our 10-day prediction window. Today’s vector of -0.34% moves to -1.36% 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 $14.38 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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