Economic data, earnings and Fed news should outweigh political news this week.

Although Monday brought news of a significant event in Robert Mueller’s special Russia investigation into the Trump campaign, market participants are focusing more on a more pertinent raft of economic data and corporate performance. Friday saw massive tech surges, which worked to push the Nasdaq Composite index to record closing numbers. The tech-saturated index continued to perform well in Monday trading, although the DJIA and S&P saw slumps. Consumer-staples and health-care stocks in particular drove losses today, although consumer spending data and the personal-consumption-expenditure index- which the Fed uses to monitor inflation- both saw increases for the month of September. Going forward, investors will be mostly concerned with the next Fed leader appointee decision. Recent reports indicate that Fed Gov. Jerome Powell is a likely candidate. A Republican bill-reveal for tax code reform is expected this Wednesday as well. This news will work to counter uncertainty at an opportune time in the middle of this week, as we await details on the charges brought against Paul Manafort, a former Trump campaign chairman.

Crude oil futures are seeing a rally today with solid expectations of an OPEC production-cut extension in the near future, although we will need to watch the reaction from U.S. domestic drillers. U.S. producers tend to ramp up output to take advantage of short-term gains in per-barrel prices, offsetting production-cut efforts.   

At the time of publication, the DJIA is down 0.38%, or 89 points, at 23,345. The S&P 500 is trading at 2,572- down 0.37% from the open. The Nasdaq-100 is down 0.12% at 6,693.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows  consistent positive signals. Today’s positive vector figure of +0.59% moves to +1.64% within three trading sessions.  Today’s predicted support and resistance is 2,578.74 (± 2.71) and 2,601.22 (± 2.74), respectively. The predicted close today is 2,600.13. 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 October 26, our ActiveTrader service- included in all of our membership plans- generated a Bullish recommendation for the D.R. Horton Inc. (DHI).

Trade Breakdown

Within the first two hours of trading, DHI passed through the Entry 1 ($43.26, ± 0.14) price range and moved to reach its Target of $43.69. The Stop Loss was set at $42.83.

Must-buy Stock for Tuesday

Our must-buy stock for Tuesday is D.R. Horton Inc. (DHI), a major U.S. homebuilder. shows very strong bullish momentum 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 relative to our entire data universe. Our 10-day prediction model shows vector figures shooting above +9.00% within the next trading session. Our benchmark for vector figures is +1.00%.

The stock is trading at $44.40 at the time of publication, up 0.24% from the open with a +3.28% vector figure.

Tuesday’s prediction shows an open price of $47.88, a low of $47.67 and a high of $49.15.

The predicted close for Tuesday is $48.12. Vector figures show +9.29% for tomorrow, which continues to build up incrementally in the following 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.

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.

Oil

The crude oil market is seeing a rally today as investors price in expectations of another OPEC global production cut deal extension. Although the next official OPEC meeting won’t take place until November 30, recent commentary from major member-countries have pointed to a likely extension. We saw December Brent crude move past the $60 per barrel price level- a first in over two years. The next step in this phase is a typical one, which has some analysts concerned. When crude prices rally, U.S. producers take advantage of the short-term price hikes and ramp up production, which works against the efforts of the OPEC deal.  West Texas Intermediate for November delivery is priced at $53.97 per barrel at the time of publication, up 0.11% from the open.  

Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals with a late uptrend. The fund is trading at $10.85 at the time of publication, which is up 0.10% from the open. Today’s prediction sees support at $10.55 (± 0.04) and resistance at $10.84 (± 0.04). The predicted close for today is $10.71. Vector figures show +0.32% today, moving to -0.69% in three trading sessions before a positive correction. 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 up 0.51% at $1,275.50 a troy ounce at the time of publication. Investors are reacting to a retreating U.S. dollar, which made sharp gains on Friday. Although tax reform news is incoming this week and we saw a stock rally on Friday, market participants are more concerned with the next Fed leadership appointment. Trump’s reported favored candidate, Fed Gov. Jerome Powell, is seen as a more dovish than the other option- John Taylor. Taylor is an Stanford economist who is seen as more hawkish- and some speculate that both will receive leadership positions with one getting Chairman and the other Vice Chairman. There is also some degree of uncertainty around the proximate effects to President Trump’s pro-growth agenda resulting from the recent charges brought against former Trump campaign chairman Paul Manafort.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows consistent negative signals. The gold proxy is trading at $121.45, up 0.46% at the time of publication. Today’s predicted low is $120.01 (± 0.21) and the predicted high is $120.95 (± 0.21). The predicted close today is $120.90. 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

Yields are slumping in Monday trading as investors anticipate the next Fed leadership appointment from President Trump. The two candidates are Stanford’s John Taylor, the more hawkish pick, and the more dovish Fed Gov. Jerome Powell. Most are expecting a Powell pick for chairman, and a Taylor pick for vice-chairman. The yield on the 10-year Treasury note is down 1.58% at 2.39% 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 consistent negative signals in our 10-day prediction window. Today’s vector of -0.31% moves to -1.25% within three trading sessions. The ETF is priced at $124.06 at the time of publication- up 0.67% from the open. The predicted close today is $122.30 with a low and high of $121.96 (± 0.23) and $123.24 (± 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 up 8.06% to 10.59 at the time of publication, and our 10-day prediction window shows positive signals.  The predicted close today is 10.55 with a positive vector of +1.81%. Today’s predicted lows and highs are 10.18 (± 0.17) and 11.09 (± 0.19), 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.