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For the next 2-3 weeks, we expect markets to trade in the range of $285-$315 for the SPY. U.S. stocks lowered yesterday following the emergency rate-cut issued by the Federal Reserve but are trading impressively higher today with all three major U.S. indices on track for sizable gains. The half-a-percentage point rate cut, coupled with some political clarity following the Super-Tuesday U.S. elections, is subverting global pressure as the COVID-19 virus continues to cause concern world-wide. Today’s top economic release will be the Beige Book, as well as monthly ADP employment data, while tomorrow features Q4 Unit Labor Cost and Productivity reports. Earnings in focus today include Campbell Soup and Dollar Tree, with Costco and Baxter International headlining tomorrow’s releases. Aggressive traders could consider going long near $285 and short near $315. The bottoming process has started as the market staged a rebound from the $285 level. Having reached the $50 level, the VIX is indicating the worst part of the selloff is behind us and we encourage maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
All three major U.S. indices closed the day with impressive gains as the Dow and S&P recorded over 4% gains while the Nasdaq was up 3.85%. The latest interest rate cut by the Federal Reserve was brought up following Coronavirus global concerns. With the emergency half-a-percentage point cut, markets initially lowered only to rebound strongly today. Globally, Asian markets closed to mixed results while European markets were in the green. The global death toll has topped 3,000 with a handful of cases making their way to the continental U.S. elongating domestic and global concerns. Watch out for additional statements from the CDC and WHO.
The U.S. Beige Book released today showed similar growth to previous reports but indicated a heightened sense of worry regarding the Coronavirus. With growth at a standstill, Fed chairs discussed manufacturing, labor, and disruption concerns. Also released today was the latest monthly ADP report, which reported an additional 180,000 private sector added in February. Earnings remain light with Zoom, Campbell Soup, and Dollar Tree reporting today while tomorrow’s Costco earnings report will close out the week in major corporate reports.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term positive outlook. Today’s vector figure of +0.28% moves to +19.09% in four 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 February 25th, our ActiveTrader service produced a bullish recommendation for General Motors Company (GM). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
GM entered its forecasted Strategy B Entry 2 price range $33.26(± 0.22) in its first hour of trading that day and passed through its Target price of $32.76 in the following hour of trading. The Stop Loss price was set at $34.42.
Our featured symbol for Thursday is Consumer Staples Select Sector SPDR (XLP). XLP 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 $63.22 at the time of publication, with a +0.10% 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.
*Please note: At the time of publication Vlad Karpel does not have a position in the featured symbol, XLP. 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 $47.10 per barrel, up 5.23% 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 $9.77 at the time of publication. Vector figures show -2.07% today, which turns to -16.14% in three trading sessions. 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 price for the Gold Continuous Contract (GC00) is up 1.84% at $1,595.70 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows negative signals. The gold proxy is trading at $150.18, at the time of publication. Vector signals show -1.40% 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 5.10% at 1.10% at the time of publication.
The yield on the 30-year Treasury note is down 1.32% at 1.66% 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. Today’s vector of +0.56% moves to +1.94% in three sessions. 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 CBOE Volatility Index (^VIX) is $35.72 at the time of publication, and our 10-day prediction window shows positive 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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