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Based on our models, SPY will trade between $270-$295 level in the next 2-3 weeks. The market can overshoot support and resistance levels when VIX is trading near $40 level. Today, markets are trading modestly lower, continuing last week’s end-of-week selloff, with the Dow and S&P trading in the red while the Nasdaq holds on to small gains. The latest economic reports are once again showing the outbreak’s impact on both global and domestic economies, with European manufacturing near all-time lows while U.S. factory orders dropped over 10% in March. Several U.S. states look to loosen stay at home orders in the coming weeks and, in turn, restart parts of the economy while government-run trials and treatment research continue. Elsewhere, large build-ups of oil storage following the recent collapse in pricing is causing June contracts to lower. Major earnings set to release this week include Disney, CVS Health, Shopify, PayPal, and Uber. Following several sectors breaking through their recent overhead resistance levels last week, we no longer believe the market will retest $260 SPY level and we will be a buyer into any short term corrections. In the short term, we still believe the market is overbought; long-term investors can consider buying equities with dollar-cost averaging in mind. Investors should continue considering hedging portfolios into the rallies. Market Commentary readers are always encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Globally, Asian markets were trading to mixed results, while European markets closed to unanimously lower. Elsewhere, oil saw another substantial drop while gold increased. The dollar slightly rose while U.S. Treasury notes saw modest movement lower today.
Key U.S. Economic Reports Out This Week:
Key Corporate Earnings Out This Week:
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term mixed outlook. 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 April 3rd, our ActiveTrader service produced a bullish recommendation for Gilead Sciences Inc (GILD). ActiveTrader is included in several Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
GILD entered its forecasted Strategy B Entry 1 price range $76.98(± 0.77) in the second hour of trading that day and passed through its Target price of $77.75 in the fourth hour of trading that day. The Stop Loss price was set at $76.21.
Our featured symbol for Tuesday is J.M. Smucker Company (SJM). SJM is showing a steady 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 $115.51, with a vector of +0.55% at the time of publication.
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, SJM. 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 $21.31 per barrel, up 7.63% 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 $18.86 at the time of publication. 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.
Gold
The price for the Gold Continuous Contract (GC00) is up 0.65% at $1,712.00 at the time of publication.
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 $159.78, at the time of publication. Vector signals show -0.01% 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, at 0.636% at the time of publication.
The yield on the 30-year Treasury note is down, at 1.288% 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. 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.
Volatility
The CBOE Volatility Index (^VIX) is $31.23 at the time of publication, and our 10-day prediction window shows negative 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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