Tax-reform optimism is setting the tone for trading both today and yesterday, as we’re seeing the DJIA and S&P 500 inch up toward record territory. The Dow reached 23,910 in earlier trading, with all components of the index gaining. The S&P 500 hit 2,629- led by financials. The tech-heavy Nasdaq, however, took a dive and dropped over 100 points today.
A possible full Senate vote on the tax-reform bill on Thursday will be of main focus for market participants. This event is likely going to eclipse any rising geopolitical tension with North Korea- who had just recently tested another ICBM.
In cryptocurrency news, we’re seeing Bitcoin (BTCUSD) passing the $10,000 mark and into the $11,000 territory. While many analysts look at this as a major speculative bubble to crash, the unprecedented nature of cryptocurrencies has contributed to an unpredictable atmosphere that major institutions are attempting to become involved in. Whether or not we see major swings in this area, it is highly likely that Bitcoin and the myriad cryptocurrencies will be a new mainstay in the financial world. Look to equities that are involved in this sector, such as processor and graphics cards makers, e-commerce companies poised to accept crypto as payment, and other proxy stocks that may ride the boom.
At the time of publication, the DJIA is up 0.21%, or 48.87 points, at 23,887. The S&P 500 is trading at 2,622- down 0.20% from the open. The Nasdaq-100 is down 1.61% at 6,800.
Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows overall positive signals. Today’s positive vector figure of +0.14% moves to +0.70% within three trading sessions and rises from there. Today’s predicted support and resistance is 2,602.42 (± 3.29) and 2,609.73 (± 3.30), respectively. The predicted close today is 2,607.73. 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.
Highlight of a Recent Winning Trade
On November 28, our ActiveTrader service- which is included in all Tradespoon membership plans- generated a bullish trade for Juniper Networks (JNPR). Our ActiveTrader service is designed for intra-day trading.
JNPR opened within the Entry 1 ($27.38, ± 0.21) price range and moved through its Target of $27.65 within the first hour of the trading session. The Stop Loss was set at $27.11.
Our must-buy stock for Thursday is D.R. Horton Inc. (DHI). DHI is projected to continue a steady positive pace, showing healthy bullish vector signals 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 relative to our entire data universe. Our 10-day prediction model shows vector figures climbing above +3.00% within the next trading session. Our benchmark for vector figures is +1.00%.
The stock is trading at $50.29 at the time of publication, up 0.36% from the open with a +1.74% vector figure.
Thursday’s prediction shows an open price of $51.32, a low of $50.04 and a high of $51.86.
The predicted close for Thursday is $51.04. Vector figures show +3.31% for tomorrow, building incrementally throughout the forecast. This is a good signal for trading opportunities, because the vectors are a primary factor in determining price movements for stocks and ETF.
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 for next trading session relatively to average of actual prices for last trading session. The column shows expected average price movement “Up or Down”, in percent. Trend traders should trade along predicted direction of the Vector. The higher the value of the Vector the higher its momentum.
Crude oil futures are pulling back today with tomorrow’s OPEC meeting looming over investor sentiment. Although an extension of the global production cut deal is expected to pass, there are still specific details around production cut rates, quotas and timelines. Namely, Saudi Arabia and Russia will need to work hard to come to agreements and hash out an arrangement that is acceptable by both parties. On the U.S. side, we’re seeing rising output levels which runs contrary to the goals OPEC’s member and nonmember countries. We’ve also seen contradictory domestic crude supply data which has injected some uncertainty. The Energy Information Administration produced data which showed a drop in U.S. crude inventories, while the American Petroleum Institute showed gains.
West Texas Intermediate for January delivery is priced at $57.13 per barrel at the time of publication, down 1.52% from the open.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals with initial negative movement followed by a positive upturn. The fund is trading at $11.39 at the time of publication, down 1.64% from the open. Today’s prediction sees support at $11.44 (± 0.05) and resistance at $11.76 (± 0.05). The predicted close for today is $11.68. Vector figures show +0.36% today, moving to -0.51% in three trading sessions before a late positive reversal. 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 February gold is down 0.92% at $1,288.20 a troy ounce at the time of publication. With the U.S. dollar starting to firm up due to a series of positive economic data reports, the yellow metal is seeing downward pressure as usual. Gold prices and the U.S. dollar tend to move inversely to one another, as a weaker dollar makes gold more attractive to investors holding foreign currencies. It is notable that the unnerving news from North Korea of another ICBM test has not phased markets and we’re not seeing the typical flight to perceived safe-haven assets such as gold. Tax-reform optimism, fresh economic data and anticipations of a Fed interest-rate hike have all contributed to push markets past geopolitical worries.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows steady positive signals. The gold proxy is trading at $121.96, down 0.69% at the time of publication. Today’s predicted low is $122.81 (± 0.21) and the predicted high is $123.45 (± 0.21). The predicted close today is $123.16. 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.
Yields are gaining today as investors digest fresh economic data that has worked to support a Fed interest-rate hike in the near future. Third quarter GDP data showed 3.3%, which matched forecasts. This figure seemed to have been supported by a higher than expected rate of capital investment spending, at 10.4%. It appears as though GOP lawmakers are beginning to rally behind the proposed tax-reform bill, which may be voted on as early as Thursday. The yield on the 10-year Treasury note is up 2.18% at 2.38% at the time of publication. Bond prices tend to move inversely to yields.
Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see majority positive signals seeing a late negative downturn in our 10-day prediction window. Today’s vector of +0.37% moves to -0.35% in seven trading sessions. The ETF is priced at $125.40 at the time of publication- down 1.10% from the open. The predicted close today is $127.83 with a low and high of $126.56 (± 0.22) and $127.88 (± 0.22), respectively. 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 up 6.88% to 10.72 at the time of publication, and our 10-day prediction window shows positive signals. The predicted close today is 10.53 with a positive vector of +3.30%, which moves to +8.28% within three trading sessions. Today’s predicted lows and highs are 9.92 (± 0.21) and 11.13 (± 0.23), respectively. 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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