Solid Economic Data Unable to Save Market From Trade Concerns

March 14, 2018
By Vlad Karpel

Major U.S. indices saw slight early rebounds from Tuesday’s profit taking, which was stoked by the abrupt replacement of Rex Tillerson with CIA Director Mike Pompeo as Secretary of State. Although this was another significant marker of uncertainty amongst investors around the Trump administration’s overall stability, this departure had been widely expected for some time. Two economic data points informed investor activity in earlier trading: U.S. retail sales grew 0.3% in February (stripping out autos and gas), and wholesale inflation rose 0.2% in February as shown by the producer-price index. It is important to note the producer-price index rose 0.4% in January, so this past month’s figure shows continued economic strength without expanding too fast. Investors responded well to this news as it keeps the Fed from responding aggressively in the form of interest rates.

It did not take long for the industrials and materials sectors to mirror the uncertainty around U.S. trade policy and cabinet shake ups in the Trump administration. The industrials and materials sectors dropped 0.3% and 0.6%, respectively. Lawrence Kudlow, a major CNBC contributor, has accepted a position in the White House as a top economic advisor and replacement for Gary Cohn, who had resigned in protest of Trump’s tariffs announcements. Kudlow’s position on these policies will be seen as a signal to U.S. trading partners around the administration’s trade agenda going forward. Kudlow recently penned an article criticizing the tariffs, essentially equating them with taxes to be avoided by conservatives. It is up for debate whether or not Kudlow’s position will be primarily for economic consultation or for effective media appearances to defend controversial trade policies.  Investors will also pay attention to Pompeo’s position on trade policy, and his loyalty to Trump as Secretary of State.

At the time of publication, the DJIA is down 0.95%, or 239.41 points, at 24,766.12. The S&P 500 is at 2,754.14 – down 0.41% from the open. The Nasdaq-100 is down 0.26% at 7,491.09.  

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows positive signals. Today’s vector figure of +0.11% moves to +1.17% within three trading sessions. Today’s predicted support and resistance levels are 2,772.76 (±14.07) and 2,782.07 (± 14.12), respectively. The predicted close today is 2,775.33. 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 March 9, our ActiveTrader service produced a bullish recommendation for Ciena Corporation (CIEN). ActiveTrader, included in all paid Tradespoon membership plans, is designed for intraday trading.

Trade Breakdown

CIEN opened within the Entry 1 price range of $26.55 (± 0.17) at $26.70, moving through its Target Price of $26.82 within the first hour of trading. The Stop Loss was set at $26.28.

 

Buy, Buy, Buy: Stock Signals for Thursday

Our featured stock for Thursday is the  E*TRADE Financial Corporation (ETFC). ETFC is showing a strong positive trend 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 predicted support and resistance, relative to our entire data universe. Our 10-day prediction model shows positive vector figures gaining above +3.00% in the next two 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 $56.73 at the time of publication, down 0.46% from the open with a +1.05% vector figure.

Thursday’s prediction shows an open price of $60.03, a low of $57.83 and a high of $60.78.

The predicted close for Thursday is $58.89. Vector figures rise to +3.34% on Thursday, holding above +3.00% 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.

 

Live Trading Room Update

See how we make money in the current market and what to expect next in our limited time Live Trading Room highlights. Our winning 5-for-5 trades this morning, March 12 ranged from 1.64% to 45% ROI!

Symbol

Net Gain

PBCT  

45.00%

LNC

1.64%
AMGN

18.71%

IWM

32.17%

MMM

14.63%

 

Our Live Trading Room is open every trading day from 9:15 am Eastern Time and is only available for Premium Members.

We wanted to share the recording with you so you can see the profits you might be missing- even during volatile markets.

Click Here to Watch How I Generate Profits During this Volatile Market!

 


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Oil

Continued hikes in U.S. crude inventories and output are pressuring oil prices today, following a weekly Energy Information Administration report.  Crude stockpiles grew by 5 million barrels last week, which was twice the amount expected. U.S. domestic output reportedly rose by 12,000 barrels to 10.381 million per day for that same week. Although OPEC showed an overall production drop of 77,000 barrels per day last month, the cuts are being offset by U.S. output spikes. West Texas Intermediate for April delivery (CLJ8) is priced at $60.88 per barrel at the time of publication, up 0.28% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows overall positive signals. The fund is trading at $12.25 at the time of publication, up 0.10% from the open. Today’s prediction sees support at $12.19 (± 0.08) and resistance at $12.54 (± 0.08). The predicted close for today is $12.27. Vector figures show +0.08% today, which move to +0.40% the following trading session. 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 April gold (GCJ8) is down 0.20% at $1,325.00 at the time of publication. A rise in U.S dollar strength, due to recent economic data reports, is causing headwinds for the yellow metal. Although strong economic signals could bolster the dollar, runaway inflation may spark a faster-than-expected Fed rate hike agenda and spur a safe-haven drive to gold. When rates rise, the dollar lifts as well but stocks are negatively impacted, which presents a complex dynamic for safe-haven assets. Political uncertainty, protectionist U.S trade policies, and the subsequent threat of a global trade war are all additional factors in play for gold in the near-term future.

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 $125.60, down 0.14% at the time of publication. Today’s predicted low is $124.24 (± 0.30) and the predicted high is $126.08 (± 0.30). The predicted close today is $124.88. Vector signals show -0.30% for today, holding negative for three sessions before turning up for six 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.

 

Treasuries

Long-dated bond prices are seeing gains, following economic data, particularly the wholesale producers price index, indicating steady inflation in line with expectations. This has pushed long-dated bond yields lower. On the other end, short-dated bonds are pricing in a March 21 Fed interest rate hike, driving short-dated bond yields higher. This has worked to flatten out the yield curve for the time being. Market participants can’t look at the yield curve in a vacuum of monetary policy and inflation, as uncertainty around trade policy will undoubtedly factor in soon. Particularly, a recent report from Reuters indicated the White House may be eyeing around $60 billion in tariffs to impose on Chinese imports, which can have a direct effect on Chinese holdings of U.S. bonds. Chinese holdings of U.S. Treasury bonds has been decreasing recently, so further instability here would impact bond prices and yields. The yield on the 10-year Treasury note is down 1.15% at 2.81% at the time of publication. The 30-year is down 1.34% at 3.06%.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see mixed signals in our 10-day prediction window. Today’s vector of +0.06% moves to -0.04% in three trading sessions, holding negative before a late upward correction in the ninth trading session. The ETF is priced at $120.13 at the time of publication, up 0.29%. The predicted close today is $118.82 with a low and high of $118.56 (± 0.25) and $119.77 (± 0.25), 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.

 

Volatility

The CBOE Volatility Index (^VIX) is up 3.24% at 16.88 at the time of publication, and our 10-day prediction window shows all negative signals. The predicted close for today is 16.01 with a vector of -2.05%. The predicted lows and highs are 14.04 (± 0.91) and 16.35 (± 1.06), 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.

 

 


Special Once In A ‘Lifetime’ Offer – Watch where I trade my personal money, propose specific stop losses, time the market, show how I trade step-by-step, consider underlying volatility, and sell for big profits!

Click here for my Special Offer!


 

Click Here to Watch How I Generate Profits During this Volatile Market!

 


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