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All three major U.S. indices are on track to close in the green at the start of the two-day meeting between China and the U.S. in the White House. Markets were also supported by the news that President Trump would attend tomorrow’s meeting with Vice Premier Liu He, sparking hope of progress or some form of a formal agreement between the two sides. Brexit and U.S.-China negotiations remain key this month while earnings season is set to pick up next week with several key corporate reports including major banks Chase, Citigroup, and Bank of America, as well as Netflix and IBM. Core CPI and Consumer Price Index for September are due today with October’s consumer sentiment index is out tomorrow. The market continues to trade between $282-$294 for the SPY and we believe the market is range-bound. Taking this into consideration, we will look to sell near $294 and buy near $282. We do not believe the market has the potential to overshoot all-time but further volatility is expected. We encourage Market Commentary readers to maintain clearly defined stop levels. For reference, the SPY Seasonal Chart is shown below:
With the latest round of trade talks upon us, market sentiment is on the move up. Trade representatives from both U.S. and China are meeting in the White House today and will continue talks tomorrow with President Trump joining. Some form of agreement, whether on currency or tariffs, could impact markets as both sides look to deescalate the current trade war and agree on a partial deal. Next week, tariffs on certain Chinese goods are set to increase while further tariffs from both sides are still due later this year. Still, continued dialogue and the presence of high-ranking officials are positive signs impacting markets today.
Also supporting markets is the latest round of economic data as well as optimism for upcoming earnings. Yesterday, FOMC minutes from last month’s meeting were released and showed a Fed set on cutting rates and considerate of growing economic concerns. Strong labor data and steady inflation levels have supported markets while political uncertainty and global trade tension continue to weigh on the economy. Today’s release of the U.S. consumer price index showed a mostly unchanged inflation level. Other key facts from the report showed the cost of living that had slightly increased with rising food, rent, and medical costs. Still, other categories saw declines which shows an economy experiencing more inflation in some areas than others. Next week, look for major banks to release corporate earnings as well as Coca-Cola, PayPal, Netflix, and other major names.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows negative signals. Today’s vector figure of -0.08% moves to -1.39% in five trading sessions. 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 September 27th, our ActiveTrader service produced a bullish recommendation for Nike Inc (NKE). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
NKE entered its forecasted Strategy B Entry 1 price range $92.17 (± 0.50) in its first hour of trading and passed through its Target price $93.09 in the first hour of trading the following trading day. The Stop Loss price was set at $91.25.
*Please note: At the time of publication we do own the featured symbol, VXX. 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 iPath S&P 500 VIX Short-Term(VXX). VXX is showing a confident vector trend in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (C) indicating it ranks in the top 50th percentile for accuracy for predicted support and resistance, relative to our entire data universe.
The stock is trading at $24.8 at the time of publication, down 2.21% from the open with a -1.10% vector figure.
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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $53.68 per barrel, up 2.07% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows negative signals. The fund is trading at $11.2 at the time of publication, up 1.91% from the open. Vector figures show -1.12% today, which turns -3.81% in five 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.
The price for the Gold Continuous Contract (GC00) is down 0.86% at $1,499.70 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 positive signals. The gold proxy is trading at $140.92, down 0.80% at the time of publication. Vector signals show +0.29% 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 up 4.84% at 1.66% at the time of publication. The yield on the 30-year Treasury note is up 3.31% at 2.16% 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 negative signals in our 10-day prediction window. Today’s vector of -0.31% moves to -1.13% 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 down 1.88% at $18.29 at the time of publication, and our 10-day prediction window shows negative signals. The predicted close for tomorrow is $16.87 with a vector of -10.24%. 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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