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After markets were pulled in both directions last week but ultimately ended up sharply lower, U.S. markets opened this week to a similar sentiment as all three major U.S. indices edged lower. Primarily, markets were pressured due to the latest comments from Fed Chair Jerome Powell. During the recent Jackson Hole Economic Symposium, Jerome Powell, the head of the Federal Reserve, vowed that the central bank would continue its battle against inflation to completion. “We’ll keep doing this until the job is finished,” he said. Powell acknowledged that lowering inflation will come at the cost of business and everyday Americans, something investors feared would send the market back into bear territory throughout last week. Ultimately, markets lowered significantly on Friday and recession fears have now resumed. The Federal Reserve’s top objective is to keep inflation at or below 2% by gradually raising interest rates was another one of the key takeaways for investors examining the Fed Chair’s speech. Powell’s comments met expectations but still forced shares to sell off, recording one of the worst days in recent history.
This week, look out for key employment data to release alongside manufacturing, factory orders, and construction spending. On Tuesday, July job openings and quits are due while August data will populate the rest of the week. ADP employment report for August is set for Wednesday; the unemployment rate, average hourly earnings, and labor force August reports will release Friday. Along with August employment data, the $BIDU, $HPQ, and $BBY earnings can influence the next move in the market. The VIX is currently trading near the $28 level, up from last week, and we are watching the overhead resistance levels in the SPY, which are presently at $417 and then $422. The $SPY support is at $398 and then $390. We expect the market to continue the current pullback for the next 2-8 weeks and would be sellers into any further rallies. Globally, Asian markets with mixed results while European assets were in the red. We encourage all market commentary readers to 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, SH. 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 $96.94 per barrel, up 4.17%, 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 $75.85 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 down 0.02% at $1749.50 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 $161.76 at the time of publication. Vector signals show -0.28% 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 3.104% at the time of publication.
The yield on the 30-year Treasury note is up, at 3.242% 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 $26.21 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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