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On the first day of the second quarter, U.S stocks saw a decline spearheaded by the continuation of the tech tumble we saw end last month, weighed down strongly by Facebook and Amazon news. Also on investors’ minds are global trading policies that have proven to be volatile, but whether these will have more long or short term effects is still unknown. Elsewhere, the European markets will be closed today for observance of the Easter holiday while back in the U.S., with markets resumed after being off for Good Friday last week, manufacturing surveys are set to be released and should serve as a good gauge of the economy.
Technology shares, last week, saw a strong decline as concern over Facebook’s handling of user data rose to prominence. Headline news about the social media giant’s data breach had everyone from the White House to fellow Silicon Valley execs commentating culminating in Mark Zuckerberg responding over the weekend. Apple CEO Tim Cook called out Facebook last week when he seemed to directly criticize the social media giant’s by saying “We could make a ton of money if we monetized our consumer, if our consumer was our product,” alluding to the difference in the two companies business models.
This continued the Dow’s decline, starting off Monday down 121 points while the S&P, down over 2.0%, and Nasdaq Composite, down 2.29%, slipped. Beyond Facebook, the tech sector got weighed down by negative attention Amazon got from the White House as talks of monopoly and increased taxes around the company found their way to the President’s twitter account. Amazon saw an initial decline of 4.6% on Thursday following Trump’s tweets but then rebounded to finish the day up 1.1%. Some analysts argue that Trump’s tweets have little influence on policy and therefore long term effect or volatility on markets while others have noted jumps in Boeing (BA) and Lockheed Market Corp. (LMT) as signs of Trump’s tweets in action. Whether further action against the online giant will come from this in the form of policy is anyone’s guess but will certainly hold investors attention in the coming months. For the day, Amazon is down 5.3% at 1,388.80.
Other market news from over the weekend saw Tesla (TSLA) report its lowest month of the year dropping 22%, with a continuation of that trending today falling 7% for the day, and a 12-month outlook dating back to March 2017 that is down 11%. Reports of missed first-quarter production goals coupled with a recall of over 100,000 vehicles were major players in the stock’s plunge. An investigation is underway for an autonomous car driving for Uber that fatally struck a pedestrian in Arizona last month. Despite this news, Tesla CEO Elon Musk played an April Fool’s joke tweeting that company has gone “bankrupt,” which did not seem to amuse investors.
At the time of publication, the DJIA is down 2.11%, or 505.17 points, at 23,952.89. The S&P 500 is at 2,611.64 – down 2.34% from the open. The Nasdaq-100 is down 2.63% at 6,944.58.
Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows mostly all positive signals. Today’s vector figure of 1.01% moves and moves to 2.32% the following trading session. Today’s predicted support and resistance levels are 2,614.85 (±11.63) and 2,693.29 (± 11.98), respectively. The predicted close today is 2,681.14. 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 27, our ActiveTrader service produced a bearish recommendation for Alerian MLP ETF (AMLP). ActiveTrader, included in all paid Tradespoon membership plans, is designed for intraday trading.
Trade Breakdown
AMLP opened within the Entry 1 price range of $9.34 (± 0.08) at $9.36, moving through its Target Price of $9.25 within the first hour of trading. The Stop Loss was set at $9.43.
Our featured stock for Tuesday is Macy’s Inc. (M). M 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 figure of above +1.00% for today that remains near or above 1.00% throughout the 10-day forecast. 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 $29.45 at the time of publication, down .98% from the open with a +2.79% vector figure.
Tuesday’s prediction shows an open price of $29.48, a low of $29.30 and a high of $31.13.
The predicted close for Tuesday is $30.67. Vector figure remains positive at +2.23% on Tuesday, holding above or near +1.00% 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.
The international benchmark for barrels fell below $70 as concerns of future demand continue to permeate from the possibility of a trade war between the U.S. and China. Retaliating with their own tariffs on over 100 agricultural imports, China countered Trump’s steel tariffs over the weekend. This, along with reports of slowed down drilling in the Middle East, have oil futures in murky waters. Although U.S. output has increased this year, uncertainty over U.S. and Iran sections have also impacted optimism on the commodity. West Texas Intermediate for May delivery (CLK8) is priced at $63.14 per barrel at the time of publication, down 2.8% from the open.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mostly negative signals. The fund is trading at $12.71 at the time of publication, down 2.90% from the open. Today’s prediction sees support at $12.84 (± 0.06) and resistance at $13.20 (± 0.06). The predicted close for today is $13.11. Vector figures show +.11% today, which move to -0.65% the following trading session, and then -1.09% in two trading sessions and remains mostly negative throughout. 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 June gold (GCM8) is up 1.22% at $1,343.10 at the time of publication. With the U.S. dollar and assets struggling on Monday, Gold future continue to look strong. And although Gold futures fell last week, the commodity actually rose 1.4% for the quarter. On Friday, March payrolls will be reported which should impact both the dollar and gold depending on whether hiring slowed or continued to rise for the year.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows all positive signals, apart from the first two trading sessions. The gold proxy is trading at $126.9, up 0.88% at the time of publication. Today’s predicted low is $124.96 (± 0.32) and the predicted high is $125.79 (± 0.32). The predicted close today is $125.43. Vector signals show -.07% for today but goes positive in two trading sessions at .4% before going over 1.00% at 1.78% after two more trading 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
After a strong first quarter in 2018, Treasury yields continue to climb early on the first day of the second quarter but have seen drops later in the day. The back and forth between the U.S. and China, so far, has had little impact on bonds but investors will continue to monitor developments, along with March job reports set to release Friday, and their impact on Treasury futures. The yield on the 2-year Treasury note is down .53% at 2.73% at the time of publication. The yield on the 10-year Treasury note is down .6% at 2.73% at the time of publication. The yield on the 30-year Treasury note is down .33% at 2.69% 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 positive signals in our 10-day prediction window. Today’s vector of +0.09% moves to 0.47% in three trading sessions. The ETF is priced at $121.835 at the time of publication, up 0.38%. The predicted close today is $121.56 with a low and high of $121.31 (± 0.24) and $122.91 (± 0.24), 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 12.72% at 22.51 at the time of publication, and our 10-day prediction window shows all positive signals. The predicted close for today is 22.90 with a vector of 3.20%. The predicted lows and highs are 20.86 (± 1.12) and 23.61 (± 1.26), 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.
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