Subdued trading in stocks as investors await a Fed update on monetary policy

September 20, 2017
By Vlad Karpel

Without a great deal of significant news to move on, investors are primarily focused on the conclusion of a two-day FOMC meeting and subsequent commentary from Fed Chairwoman Janet Yellen. A slide in Apple Inc. (AAPL) shares have put a dent in the DJIA, following reports of connectivity issues with the Apple Watch Series 3. The loss had also impacted the Nasdaq-100, a predominantly tech-saturated index. Trading should remain mum today as market participants are not expecting any surprises in the form of monetary policy updates.

The DJIA is currently up 0.02%, or 4.77 points, at 22,375.52. The S&P 500 is currently trading at 2,505.65- down 0.04% from the open. The Nasdaq-100 is down 0.24% at 6,446.02.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows  overall negative signals. Today’s positive vector figure of +0.04% reverses to negative signals which hold until the last three sessions of the forecast.  Today’s predicted support and resistance is 2,501.88 (± 3.72) and 2,516.70 (± 3.74), respectively. The predicted close today is 2,506.94. 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

Today,  September 20, our ActiveTrader service recommended Union Pacific Corp. (UNP).

Trade Breakdown

This stock opened right around our Entry 1 price of $113.00 (± 0.27)  and we saw the price reach its Target Gain level ($114.13) within the first two hours of trading.

Must-buy Stock for Thursday

Textron Inc. (TXT) is a well-known aircraft and defense corporation known for brands like Bell Aircraft and Cessna. This stock is showing continued positive signals after recent gains in our Stock Forecast Toolbox’s 10-day forecast.  Our 10-day prediction model shows positive vector signals building from +1.00% to above +2.5% within four trading sessions.

The stock is currently trading at $43.32, up 1.10% from the open with a +1.00% vector figure for today.

Thursday’s prediction shows an open price of $53.41, a low of $53.17 and a high of $54.07.

The predicted close for Thursday is $53.46. Vector figures show +1.77% for Thursday, which continues to incrementally build throughout the forecast.  

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 figures calculate the change of the Forecasted Average Price relative to “today’s” actual price. The figure 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.

 



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Oil

Today’s data from the U.S. Energy Information Administration is showing a higher-than-expected climb in domestic crude inventories- at 4.6 million barrels for last week. Analysts had forecasted a 2.4 million barrel rise. The climb in U.S. supplies have been offset by investor expectations of an extension of the OPEC global production cut accord in coming weeks. West Texas Intermediate for October delivery is currently priced at $50.65 per barrel, up 2.36% from the open.  

Looking at USO, a crude oil tracker, our 10-day prediction model shows initial negative signals followed by a positive correction. The fund is currently trading at $10.27, which is up 1.58% from the open. Today’s prediction sees support at $10.07 (± 0.04) and resistance at $10.27 (± 0.04). The predicted close for today is $10.07. Vector figures show -0.24% today, moving past -0.50% in three sessions and reversing into positive territory by September 26. 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 December gold is currently down 0.44% at $1,316.20 a troy ounce. The primary cause for the uptick is the muted trading and dipped U.S dollar ahead of today’s FOMC conclusion and subsequent policy update. Fed Chairwoman Janet Yellen is expected to give indications about how the Fed will go about unloading its multi-trillion dollar balance sheet- which is now being colloquially referred to as the “Great Unwind”. President Trump’s remarks at the U.N. General Assembly were alarming enough to spark some investing in gold- he threatened to “totally destroy” North Korea and referred to Kim Jong Un as “rocket-man”. The threat of a full-scale military conflict with North Korea has ratcheted up tensions again.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows strong negative signals. The gold proxy is currently trading at $124.70, up 0.06%. Today’s predicted low is $124.32 (± 0.31) and the predicted high is $125.06 (± 0.32). The predicted close today is $124.70. 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 little-changed today as investors await the conclusion of an FOMC meeting and the kick-off to the “Great Unwind”, or the unloading of the Fed’s $4.5 trillion balance sheet. There is some degree of uncertainty surrounding this process as this is a first in history for a central bank.  The yield on the 10-year Treasury note is currently down 0.39% at 2.24%. Bond prices tend to move inversely to yields.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see negative signals in our 10-day prediction window. Today’s vector of +0.10% reverses to a negative signal that holds for the remainder of the forecast. The ETF is currently priced at $125.78- down 0.03% from the open. The predicted close today is $126.40 with a low and high of $125.82 (± 0.25) and $126.62 (± 0.26), 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 currently down 1.87% at 9.99, and our 10-day prediction window shows overall negative signals. The predicted close today is 10.24 with a positive vector of +0.30%. Today’s predicted lows and highs are 9.67 (± 0.25) and 10.27 (± 0.27), 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.

 

 



Here’s where I put my money where my mouth is!

Click here for my daily recommendations & research tools!

 


 


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