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Markets maintained early morning gains following the release of last month’s FOMC minutes today. All three major indices are on track to close in the green as the minutes showed a Fed that is open to further policy change and agreed to lower interest rates last month with an 8 to 2 vote. The next FOMC will take place on September 18th with most expecting another interest rate cut. Other major news today includes continued positive earnings from retailers such as Home Depot, Lowe’s, and Target all reporting above expectations while Walmart finds itself in the news after suing Tesla for faulty solar panels. Look for L Brands to report after market close today; Salesforce, Ross Stores, and HP report tomorrow. We encourage readers to maintain clearly defined stop levels, sell near $290 for SPY, and buy near $278. The current SPY short-term support sits at $277-$282 and we see the potential for the market to overshoot 50-days MA for SPY at $293. For reference, the SPY Seasonal Chart is shown below:
Today’s major economic release supported markets with the FOMC minutes echoing Powell’s statements following last month’s FOMC in which he stated the Fed was issuing the rate cut as a “mid-cycle adjustment” and not the beginning of an extended rate-cutting period. Still, many analysts and traders alike expect a rate cut in next month’s FOMC. Fed’s action will continue to be key in guiding markets and sentiment and for the time being it looks like the FOMC will take a meeting-by-meeting approach to rate cuts. Several members called for a half-point cut while some opted for no cut at all which resulted in the 8-2 vote to cut interest rates by 25 basis points. On Friday, the central bank’s annual symposium will take place in Wyoming where Fed Chair Powell is due to speak.
Also making the rounds today is another Tesla controversy which sees retail-giant Walmart suing, claiming Tesla sold them faulty solar panels which caused several fires. Tesla’s solar branch was purchased in 2016 with a $2.6 billion acquisition of SolarCity. Non-tariff news from D.C. today include Trump’s latest remarks regarding tax cuts, suggesting the current state of the economy is strong and does not require further cuts. Tomorrow, look for monthly manufacturing data and while Friday will feature July new-home sales. Globally, Asian markets closed to mixed results while European markets rose impressively.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows negative signals. Today’s vector figure of -0.01% moves to -1.82% in five trading sessions. Prediction data is uploaded after the market close at 6pm, CST. Today’s data is based on market signals from the previous trading session.
On August 16th, our ActiveTrader service produced a bullish recommendation for Crown Castle International (CCI). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
CCI entered its forecasted Strategy B Entry 1 price range $142.41 (± 0.73) in its first hour of trading and passed through its Target price $143.83 in the first hour of trading the following trading day. The Stop Loss price was set at $137.15
*Please note: At the time of publication we do own 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.
Our featured symbol for Thursday is iPath S&P 500 VIX Short Term (VXX). VXX is showing a confident vector trend 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 predicted support and resistance, relative to our entire data universe.
The stock is trading at $25.28 at the time of publication, down 4.96% from the open with a +1.84% vector figure.
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 the next trading session relative to the average of actual prices for the last trading session. The column shows 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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $55.75 per barrel, down 0.66% 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 $11.57 at the time of publication, down 0.52% from the open. Vector figures show +0.06% today, which turns -0.61% in five 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.
The price for the Gold Continuous Contract (GC00) is down 0.20% at $1,512.60 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows negative signals. The gold proxy is trading at $141.64, down 0.40% at the time of publication. Vector signals show -0.18% for today. 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.
The yield on the 10-year Treasury note is up 1.69% at 1.58% at the time of publication. The yield on the 30-year Treasury note is up 1.49% at 2.07% 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. Today’s vector of -0.15% moves to -0.05% 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.
The CBOE Volatility Index (^VIX) is down 9.14% at $15.9 at the time of publication, and our 10-day prediction window shows positive signals. The predicted close for tomorrow is $18.24 with a vector of +9.74%. 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.
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