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Following the FOMC decision yesterday to cut rates for the first time since 2008, markets lowered but have since rebounded today. All three major U.S. indices are on track to close in the green as earnings and the latest Fed moves continue to get factored into market sentiment. Verizon and General Motors reported before the opening bell today while Square Inc., Shopify, Pinterest, and U.S. Steel are due to report after the market closes. Tomorrow look for Exxon, Chevron, Toyota, and Honda to report as well as Trade Deficit data and the consumer sentiment index for July. The SPYcontinues to trade near an all-time high level and we encourage our readers to avoid chasing near $300 level. The market briefly reached long-term support at $295 yesterday and broke support at $297 for the SPY. Currently, volatility is back and we believe the market top is set for the short term at $300-$305 level. Still, we do not see market momentum pushing SPY much higher than $300 or potentially overshooting to $305. For reference, the SPY Seasonal Chart is shown below:
With the Fed’s decision to cut interest rates by a quarter-point, both major U.S. indices and index futures have risen today. The dollar received a nice boost treasury notes have lowered. Included in yesterday’s policy update was also the decision to end the balance sheet shrinking initiative, known as quantitative tightening, which was due to continue for another two months. Powell met with the press following the conclusion of the two-day meeting and downplayed the notion that further interest rate cuts could be in play for future FOMC meetings this year. Powell pointed to a strong labor market as well as low inflammatory pressure as major contributors to the cut as well as reference global trade uncertainties. The decision to cut rates was not unanimous within the FOMC and will likely be discussed in future meetings, the next one will take place in September.
Also taking place in September will be the next meeting between the U.S. and China trade representatives. After meeting in China this week, the next round of negotiations will take place in Washington. Both sides have stated the meeting have been constructive but still there are no signs of an imminent deal or agreement. Globally, Asian markets closed lower today while European markets ended the day in the green.
In earnings news, Verizon reported before the market opened today to beat expectations, causing shares to rise. After the close yesterday, Qualcomm reported Q2 earnings which did not meet expectations most likely due to recent China export ban. However, Qualcomm is trading in the green today. General Motors and Yum! Brands reported strong earnings which helped shares rise while Dunkin Brands saw slumping revenue data which caused shares to lower. Next week, look for Walt Disney, Duke Energy, Lowes, Uber, and CVS earnings to release.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows mixed signals. Today’s vector figure of -0.46% moves to +1.19% in five trading sessions. Prediction data is uploaded after the market close at 6pm, CST. Today’s data is based on market signals from the previous trading session.
On July 17th, our ActiveTrader service produced a bullish recommendation for AES Corporation (AES). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
AES entered its forecasted Strategy B Entry 1 price range $17.29 (± 0.07) in its first hour of trading and passed through its Target price $17.46 in the second hour of trading that day. The Stop Loss price was set at $17.12
*Please note: At the time of publication we do not own the featured symbol, ETR. 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 Friday is Entergy Corp. (ETR). ETR 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 $107.07 at the time of publication, up 3.07% from the open with a +0.35% vector figure.
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 the next trading session relative to the average of actual prices for the last trading session. The column shows 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 $54.41 per barrel, down 7.10% 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 $11.28 at the time of publication, down 6.31% from the open. 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.
The price for the Gold Continuous Contract (GC00) is up 1.02% at $1,452.80 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mostly negative signals. The gold proxy is trading at $136.23, up 2.27% at the time of publication. Vector signals show -0.24% for today. 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.
The yield on the 10-year Treasury note is down 6.09% at 1.89% at the time of publication. The yield on the 30-year Treasury note is down 3.68% at 2.43% 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 +0.16% moves to +0.28% in three 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.
The CBOE Volatility Index (^VIX) is up 9.37% at $17.63 at the time of publication, and our 10-day prediction window shows negative signals. 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.
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