Weak Global Data Lowers Markets, Negotiations Continue

February 21, 2019
By Vlad Karpel

All three major U.S. indices lowered today behind poor global economic data while U.S. and China negotiations continue. Both sides are shifting focus toward drafting a formal deal that would predominantly address currency, intellectual property rights, cyber theft, tariffs and more. Global and U.S. economic data is in focus today along with a select number of earnings. The current 200-day moving average for SPY is right at the $272 support level and is a major indicator of market trend. If average drops below this level we anticipate a downward trend. Still, markets should not retest last year’s lows for this quarter. For reference, the SPY Seasonal Chart is shown below:

U.S. durable goods for the month of December lowered by 1.2% while previous European and Asian markets report also indicated a slow down to global growth. The coupling of this data has lowered markets worldwide with markets in Europe closing lower today while Asian markets closed to mixed results. Yesterday, U.S. markets closed higher behind continued strong earnings and minutes from January’s FOMC meeting which reinforced the dovish stance Fed Chair Powell indicated in his previous statements.

Negotiations between Chinese and U.S. officials continue today with a final trade deal in mind. Both sides are still looking to have President Trump and Xi meet before the deal is finalized but currently that seems unlikely before the March 1st deadline. Still, talks have continued from Beijing to D.C. and it looks as though a deal could be agreed upon in the near future. Other important aspects discussed in the trade deal will likely be agriculture and tech transfer while dealing with the trade deficit and tariffs will be of key interest for investors. Elsewhere, a growing divide between the Trump administration and the EU continues as trade and energy policy are discussed by both sides, specifically in regards to recent auto tariffs. The EU is also dealing with its out fast-approaching deadline with Brexit coming up and a lack of a deal there as well. Prime Minister May recently visited Brussels to discuss the intended divorce while Parliament continues to vie for a majority-approved solution.

Hewlett Packard, Kraft, Dropbox, Roku, and Baidu report after the close today while Berkshire, U.S. Cellular, and Wayfair report tomorrow. Yesterday, CVS and Avis Budget Group reported to mix results; CVS is currently down behind earnings that did not meet expectations while Avis is currently up 17% after earnings topped expectations. Next week key housing data, such as housing starts, permits, and sales, will be released along with key economic data such as fourth-quarter U.S. GDP, core inflation, income, and spending, all of which were delayed due to the government shutdown.

Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows mixed signals. Today’s vector figure of -0.05% moves to +1.06% in five trading sessions. The predicted close for tomorrow is 2,778.73. 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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Highlight of a Recent Winning Trade

On February 19th, our ActiveTrader service produced a bullish recommendation for Philip Morris Inc. (PM). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.

Trade Breakdown

PM opened in its forecasted Strategy B Entry 1 price range $83.46 (± 0.46) and passed through its Target price $84.29 in the first hour of trading the following day, reaching a high of $85.12. The Stop Loss price was set at $82.63.


Friday Morning Featured Stock

*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 MonthlyTrader recommendations. If you are interested in receiving Vlad’s personal picks, please click here.

Our featured stock for Friday is Principal Financial Group Inc (PFG). PFG is showing a confident vector 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.  

The stock is trading at $51.84 at the time of publication, down 1.00% from the open with a +0.62% vector figure.

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 fothe r next trading session relative to the average of actual prices for the last trading session. The column shows 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.


Oil

West Texas Intermediate for March delivery (CLH9) is priced at $56.86 per barrel, down 0.52% 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 $15.06 at the time of publication, down 2.08% from the open. Vector figures show -0.16% today, which turns -0.36% 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.

Gold

The price for April gold (GCJ9) is down 1.45% at $1,328.40 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 negative signals. The gold proxy is trading at $115.54, up 2.36% at the time of publication. Vector signals show +0.02% 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.  

Treasuries

The yield on the 10-year Treasury note is up 1.76% at 2.69% at the time of publication. The yield on the 30-year Treasury note is up 1.61% at 3.04% 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 +0.02% moves to +0.42% 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.

Volatility

The CBOE Volatility Index (^VIX) is up 14.78% at $14.78 at the time of publication, and our 10-day prediction window shows positive signals. The predicted close for tomorrow is $14.62 with a vector of +4.22%. 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.


(FINAL OFFER) You Don’t Want to Miss This!

Today only, we are doing something we have RARELY do!

We are offering LIFETIME ACCESS to our Tools Membership for less than the regular price we normally charge for only 1 year of service!

***Starting next week, we will be adding an annual maintenance fee to all lifetime memberships, but if you sign up before that happens, you will be locked in and will not need to pay this fee!

Click Here to For More Information


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