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Wall Street showed mostly positive results on Monday as stocks traded higher, with investors focusing on the banking sector. First Citizens’ purchase of substantial parts of the failed Silicon Valley Bank brought relief to fears surrounding the industry. While the Dow and S&P booked gains, the Nasdaq finished in the red.
The issue of economic growth slowdown continues to concern investors; however, the positive side of this banking issue is that the Federal Reserve will act less aggressively in lifting interest rates, reducing economic demand, and helping tame inflation, much of which has been caused by the current banking woes. Already, the Fed has reduced the federal funds rate by a quarter of a percentage point in March, down from previous increases of half a percentage point.
Markets will get a better sense of how the Fed views these issues when Fed Governor Michael Barr speaks to Congress on Tuesday. Ideally, investors want to see that the banking problem is contained and that the Fed will still act cautiously and refrain from raising interest rates. On Tuesday, the US consumer confidence report will also be released, while Wednesday will feature additional testimony from Barr. On Thursday, there will be light GDP revisions, and on Friday key PCE data, core PCE, personal income, and personal spending for February will be featured.
The VIX is trading near the $21 level. This week’s earnings reports from MU and WBA, as well as liquidity issues in regional and global banks, can influence the next move in the market. Investors should watch the overhead resistance levels in the SPY, which are presently at $402 and then $408. The SPY support is at $392 and then $384. We still believe the market will trade sideways for the next 2-8 weeks, and we would remain bearish on the market at this time. We also encourage subscribers to hedge their positions. Market commentary readers should maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
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, slv. 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 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 picks, please click here.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $69.92 per barrel, up 0.36%, 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 $64.15 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.
The price for the Gold Continuous Contract (GC00) is up 1.66% at $1973.40 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $181.95 at the time of publication. Vector signals show -0.39% 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 up at 3.537% at the time of publication.
The yield on the 30-year Treasury note is up at 3.762% 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.
The CBOE Volatility Index (^VIX) is $20.6 at the time of publication, and our 10-day prediction window shows mixed 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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