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Last week, most sectors were able to sustain multi-day rallies indicating the bottoming process has started. Following a strong start to the week, markets sharply fell with the Dow, Nasdaq, and S&P down over 3% for the day. Until the market breaks through $263 SPY level, consider hedging your portfolio into the rallies as the market is overbought in the short term. With this in mind, the market remains susceptible to a 10-20% selloff from the current SPY levels. COVID-19 cases in the U.S. continue to rise, with the latest White House projection in the range of 100,000-240,00 deaths, while global number of reported cases topped 800,000. The impact of the virus is beginning to reflect in the latest economic reports: A.D.P employment data for March showed the U.S. economy lost 27,000 private-sector jobs. Additional reports to monitor this week include February U.S. Trade Deficit, March Unemployment Rate, and February Factory Orders. Long-term investors can consider buying equities with dollar-cost averaging in mind as it appears the worst part of the selloff is over. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Markets remain susceptible to additional selloffs as COVID-19 slow-down and vaccine efforts continue. Several companies have already unveiled their multi-phase timelines for vaccine trials and release while additional Fed and government action will likely continue to take place. With the current projections from the White House of over 100,000 deaths, the timeline for return to normal is far from clear and daily updates from the White House will continue to inform the public on the latest efforts and developments. Global cases have topped 800,000 while the death toll is just over 42,000. Both Asian and European markets closed significantly lower.
U.S. indices saw continued pressure today as all three recorded over 3% losses while treasuries and futures also sold off. Gold saw a small boost today and oil rose, although still trading at a very low range. With several economic reports out this week showing the first official signs of COVID-19 market-impact, investors are now seeing the vast impact of major shutdowns and economic slowdowns. The U.S. ADP employment report showed the private sector lost 27,000 last month while Markit manufacturing PMI also underwhelmed. The next earnings season is still two weeks away but will surely show additional impact of the virus on a corporate level.
Key U.S. Economic Reports 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 March 20th, our ActiveTrader service produced a bullish recommendation for Southwestern Energy Company (SWM). 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
SWM entered its forecasted Strategy A Entry 1 price range $2.03(± 0.02) in the second hour of trading that day and passed through its Target price of $2.05 in the final hour of trading that day. The Stop Loss price was set at $2.01.
Our featured symbol for Thursday is Procter & Gamble Company (PG). PG is showing a steady vector 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 current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $111.37, with a vector of 0.69% 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 have a position in the featured symbol, PG. 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 $20.61 per barrel, up 0.63% 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 $4.23 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 down 0.09% at $1,595.10 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive signals. The gold proxy is trading at $152.92, at the time of publication. Vector signals show +1.24% 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 to 0.632% at the time of publication.
The yield on the 30-year Treasury note is down to 1.290% 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 mixed 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 $57.08 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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