Can the last leg of earnings season solidify valuations?

August 14, 2017

By Vlad Karpel

U.S stocks are seeing a rebounding rally today as the rhetorical geopolitical standoff between the U.S. and North Korea has calmed down. Investors were able to buy on the dip and take advantage of one of the biggest pullbacks this year. Technology and financial shares were the biggest gainers and the S&P 500 has hit back at its 50-day moving average. With no new major economic data or Fed commentary this week, market participants will be primarily focused on foreign and domestic political issues after earnings season wraps up.

The DJIA is currently up 0.63%, or 137.78 points, at 21,996. The S&P 500 is currently trading at 2,465- up 0.97% from the open. The Nasdaq-100 is up 1.26% at 6,336.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows consistent negative signals. Today’s negative vector figure of -0.08% moves to -0.38% within three trading sessions. Today’s predicted support and resistance is 2,429.47 (± 2.98) and 2,446.60 (± 3.00), respectively. The predicted close today is 2,443.19. 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.

Must-buy Stocks for Tuesday

Based on our Stock Forecast Toolbox’s 10-day prediction data, we’ve found 2 great candidates of interest. They are:

Target Corp. (TGT)

Target is in focus today after an announcement that it has acquired a San Francisco-based technology company which specializes in delivery logistics. Target has been testing this software for same-day delivery services in a New York location. Target has also announced new leadership roles in its food and beverage units.

Our 10-day prediction model shows consistent positive signals. The stock is currently trading at $55.81, up 1.42% from the open with a +0.84% vector figure for today. Tomorrow’s prediction shows an open price of $56.27, a low of $54.75 and a high of $56.87. The predicted close for tomorrow is $55.94. Vector figures show +0.82% for tomorrow. 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.

Lockheed Martin (LMT)

Lockheed, amongst other defense contractors, is currently on a bullish trend after being rewarded Department of Defense projects and a recently raised government defense budget. Raised geopolitical tensions around North Korea is also supporting defense shares.

Our 10-day prediction model shows incrementally-building positive signals. The stock is currently trading at $306.52, which is up 0.91% from the open. Tomorrow’s prediction shows an open price of $304.96, a low of $303.19 and a high of $307.12. The predicted close for tomorrow is $304.63. Vector figures show +0.35% for tomorrow and progresses to +1.47% in two more 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.

Here’s where I put my money where my mouth is!

Click here for my daily recommendations & research tools!

Oil

Crude oil prices saw some gains but failed to push significantly higher, following last week’s OPEC announcement about rising production levels. For the month of July, overall OPEC production grew to almost 33 million barrels per day. West Texas Intermediate for September delivery is currently priced at $48.26 per barrel, down 1.15% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows negative signals followed by a late positive uptrend. The fund is currently trading at $9.80, which is down 1.95% from the open. Today’s prediction sees support at $9.63 (± 0.05) and resistance at $10.03 (± 0.05). The predicted close for today is $9.84. Vector figures show -0.58% for today and move to -2.35% 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 December gold is currently down 0.31% at $1,290.00 a troy ounce. The perceived safe-haven asset is giving up previous gains made during high geopolitical tension between the U.S and North Korea, which has subsided. It is important to consider any renewed sabre-rattling or threats will see investors turning back to gold. On another geopolitical front- President Trump has also indicated he would not rule out using military force in Venezuela amidst violent political upheaval.

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 $122.16, down 0.52%. Today’s predicted low is $122.03 (± 0.29) and the predicted high is $123.35 (± 0.30). 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.

Treasuries

As investors rotate out of perceived safe-haven assets, including government bonds, the selling pressure has driven yields higher. The rotation is due to reduced concern and uncertainty around North Korean geopolitical tensions. The yield on the 10-year Treasury note is currently up 0.47% at 2.21%.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see overall fluctuating signals in our 10-day prediction window. Today’s vector of +0.18% reverses to a negative trend within the next trading session, holding for five sessions until turning positive again. The ETF is currently priced at $126.17- down 0.21% from the open. The predicted close today is $126.68 with a low and high of $125.33 (± 0.27) and $126.68 (± 0.28), 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 down 19.60% at 12.47, and our 10-day prediction window shows overall negative signals. The predicted close today is 13.54 with a negative vector of -2.68%. Today’s predicted lows and highs are 11.56 (± 0.26) and 14.04 (± 0.31), 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.