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Our models are projecting the SPY to trade between $270-$330 level in the next 2-3 weeks while the market is unlikely to retest $260 SPY level at this time. All three major U.S. indices traded higher today following comments from the Federal Reserve which promised to expand its emergency corporate debt loaning program. Global stocks saw significant declines amid fears of a second wave while the latest economic data coming from China underwhelmed. Oracle, Kroger, and Lennar corporate earnings are due this week while May retail sales, industrial production, and housing starts are also set to release. Fed Chair Jerome Powell is scheduled to testify in D.C. on Tuesday and Wednesday. We will continue monitoring the VIX as the market can overshoot support and resistance levels when VIX is trading near $30 level. In the short term, we will be buyers into any corrections and it is our opinion the market is still overbought. Short term traders should consider adding to positions when SPY near $293 and reducing exposure to the market at $320. SPY closed above $300 today and aggressive traders can consider adding to their positions until the market reaches $320 level Investors should consider hedging portfolios into the rallies. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Today, the Dow closed 0.61% higher, the S&P added 0.83%, while the Nasdaq reported gains of 1.43%. Globally, both Asian and European markets saw significant losses. Oil moved higher while Gold dipped. The dollar slipped and long-term U.S. Treasury notes saw yields edge lower.
Key U.S. Economic Reports/Events This Week:
Key Corporate Earnings Out This Week:
For reference, the S&P 10-Day Forecast is shown below:
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.
On May 28th, our ActiveTrader service produced a bullish recommendation for Texas Instruments (TXN). ActiveTrader is included in several Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
TXN entered its forecasted Strategy B Entry 1 price range $117.82(± 0.88) in the first hour of trading that day and passed through its Target price of $119.00. The Stop Loss price was set at $116.64.
Our featured symbol for Tuesday is JPMorgan Chase & Company (JPM). JPM is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (A) indicating it ranks in the top 10th percentile for accuracy for current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $99.87, with a vector of -0.70% 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.
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, JPM. 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 $37.07 per barrel, up 2.23% from the open, 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 $26.43 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.
Gold
The price for the Gold Continuous Contract (GC00) is down 0.31% at $1,731.90 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 $162.62, at the time of publication. Vector signals show 0.00% 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, at 0.729% at the time of publication.
The yield on the 30-year Treasury note is down, at 1.462% 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.
Volatility
The CBOE Volatility Index (^VIX) is $34.4 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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