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Markets were briefly halted this morning as the 7% decline on the S&P triggered all stock-market trading to shut down for fifteen minutes before resuming. Prior to the halt, the Dow and Nasdaq also saw sizable drops that were caused by global market pressures including the Coronavirus spread and escalating Middle-East tensions. Over the weekend, oil fell sharply as ongoing conflict within the OPEC alliance caused record drops for Brent futures, with barrels currently below $30. Globally, Asian and European markets closed in the red, also trading significantly lower as COVID-19 confirmed cases and death toll increase; U.S. Treasuries plummeted below 1%. In the coming weeks, we expect the market to trade in the range of $240-$315 for the SPY ETF. With the recent selloffs and increased volatility, it is impossible to call the bottom until markets are able to close two days in a row with higher highs and higher lows. For reference, the SPY Seasonal Chart is shown below:
All three major U.S. indices saw significant drops today as compounding concerns pressured global markets. With the 7% circuit-breaker triggered to start the day following the 7% S&P drop, markets halted for 15 minutes as markets tried to stabilize during these intense price plunges. Also seeing drastic drops, oil futures and crude prices dropped severely as the OPEC alliance saw tumultuous weekend which triggered conflict within members, poising Saudi and Russian distributors to flood the market with underpriced oil. Barrel prices dropped below $30, an alarming level, and are poised to near the $20 mark, essentially making oil more expensive to pull out of the ground then sell, as noted by several analysts. Speculation regarding how a rebound could be formed continues to mount, in the meantime, COVID-19 fears remain present and troublesome for markets.
The current COVID-19 death is nearing 4,000 globally and confirmed cases in the U.S are beginning to rapidly increase. As cases in California and New York grow, several states, as well as U.S.-based corporations, are beginning to take preventative measures. The CDC and WHO continue providing updates as they become available; currently, Iran and Italy are seeing major shutdowns and quarantines due to the virus. Along with the growing Middle East tensions pressuring oil, the Coronavirus spread has kept global markets down. Asian and European markets closed unanimously lower while U.S. markets are looking to avoid full-day shut-downs which would be triggered at -20%. Core CPI and Federal Budget data for the month of February will release Wednesday while Q4 Financial Accounts of the U.S. report will release Thursday. Corporate earnings remain extremely light as Adobe, Broadcom, Cronos Group, Dollar General, and Oracle headline this week’s releases.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term mixed outlook. Prediction data is uploaded after the market closes at 6 p.m. CST. Today’s data is based on market signals from the previous trading session.
ROBOINVESTOR SPECIAL:
On February 25th, our ActiveTrader service produced a bullish recommendation for General Motors Company (GM). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
GM entered its forecasted Strategy B Entry 2 price range $33.26(± 0.22) in its first hour of trading that day and passed through its Target price of $32.76 in the following hour of trading. The Stop Loss price was set at $34.42.
Our featured symbol for Tuesday is Ipath S&P 500 VIX Short-Term Futures (VXX). VXX is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (B) indicating it ranks in the top 25th percentile for accuracy for current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $36.96 at the time of publication, with a -4.36% vector figure.
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.
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, VXX. 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 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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $31.04 per barrel, down 24.81% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows negative signals. The fund is trading at $6.55 at the time of publication. Vector figures show -2.94% today, which turns to -7.17% in three trading sessions. 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 0.10% at $1,674.00 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 $157.83, at the time of publication. Vector signals show -0.08% 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 down to 0.581% at the time of publication.
The yield on the 30-year Treasury note is down to 1.049% 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 $54.15 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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