4 Sectors to Rally?

Last week, I was interviewed by Wall Street Journal about our predictions in the retail sector. This is undoubtedly one of the most volatile industry categories right now, with major disruptions from Amazon and other rising e-commerce players taking serious territory from brick-and-mortar retailers. On June 26, our models generated a buy signal for Best Buy after market close because it analyzed the stock as being oversold. So, I made an order to buy 1000 shares if it hit $56.80, which it did in the first 30 minutes of trading. I then sold after the price hit $57.10 in the next hour and netted about $300. This is a great example of how our technology can allow you to profit quickly and confidently during high volatility, instead of chasing the market. You can read the full article on MorningStar. There’s a lot of interesting analysis to review about the current state of the retail sector.

Our models also generated another signal in the retail sector- this one is for Dollar General Corp. (DG) with a suggested entry price of  $71.14  (± 0.66).  This comes from our ActiveTrader service, a daily-updated list of bullish and bearish trade suggestions designed for day-trading or holding positions for 1-2 days.

This week is kicking off without too much activity as we’re all looking toward a round of earnings reports- particularly looking for some justification for the valuations we’re seeing.  Despite disappointing economic data Friday, markets still held steady because market participants are hoping the Fed will hold off on a rate hike in light of that data. We’re also seeing flattening yield curve, with the 10-year Treasury yield dropping two basis points to 2.32%. Currently, financials are down and we can expect a sector rotation into tech, gold, materials and REIT (Real Estate Investment Trusts) to continue. It’ll be a range-bound market while earnings season kicks into gear.

The DJIA is currently up 0.06% at 21,650, after seeing an all-time closing high on Friday. The S&P 500 also clocked an all-time closing high on Friday. The index is currently trading at 2,461 which is up 0.07% from the open. The Nasdaq-100 is up 0.11% at 6,319.

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 -+.04% moves to +0.42% within three trading sessions. Today’s predicted support and resistance is 2,449.96 (± 3.87) and 2,463.35 (± 3.89), respectively. The predicted close today is 2,450.17. 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.   

Oil

Crude oil prices are continue to fluctuate as the market attempts to orient itself around growing domestic U.S production and expectations for a global demand spike. China, in particular, is seen to be making a move to take advantage of low prices in order to bolster their inventories. China is making a name as the world’s biggest energy importer as their economy saw a better-than-expected growth figure in the second quarter. West Texas Intermediate for August delivery is currently priced at $46.49 per barrel, down 0.62% from the open.  

Looking at USO, a crude oil tracker, our 10-day prediction model shows negative movement followed by positive corrections. The fund is currently trading at $9.51, which is down 0.89% from the open. Today’s prediction sees support at $9.44 (± 0.07) and resistance at $9.64 (± 0.07). The predicted close for today is $9.44. Vector figures show -0.26% for today, moving to -1.38% 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.   

Gold

The price for August gold is currently up 0.46% at $1,233.10 a troy ounce. Less-than-expected recent economic data may influence the Fed to hold off on another rate hike in the near future, which is boosting gold investments. The non-fiat metal has also managed to top a technical level: a 200-day moving average at $1,230 a troy ounce.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows overall negative signals. The gold proxy is currently trading at $117.36, up 0.51% from the open. Today’s predicted low is $116.05 (± 0.30) and the predicted high is $116.98 (± 0.31). The predicted close today is $116.33. 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

Treasury yields are still showing signs of flattening out, following lacking inflation rates and a decidedly more dovish outlook from the Fed. There is also a political aspect to this activity, particularly investor sentiments around the feasibility of passing pro-growth agenda items by the Trump administration. Currently, the health-care bill is in deadlock and has been delayed significantly. Investors look to this inaction as a template for passing other bills, such as infrastructure spending and deregulation items. These are factors that drove the post-election ‘Trump Bump’, which drove yields higher.  This is a wildcard component to the markets and is important to keep an eye on.  The yield on the 10-year Treasury note is currently down 0.88% at 2.33%. Bond prices and yields are typically inversely related to one another.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see building positive signals after today’s trading session in our 10-day prediction window. Today’s vector moves from -0.17% to +0.31% in four trading sessions.  The ETF is currently priced at $123.66- up 0.27% from the open. The predicted close today is $123.32 with a low and high of $123.07 (± 0.24) and $124.14 (± 0.24), 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.

Volatility

The CBOE Volatility Index (VIX) is currently up 3.05% at 9.80, and our 10-day prediction window shows strong negative signals. The predicted close today is 9.88 with a negative vector of -0.93%. Today’s predicted lows and highs are 9.17 (± 0.20) and 10.32 (± 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.