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Following today’s Fed decision, all three major U.S. indices traded impressively higher. Earlier this week the volatility index (VIX) moved higher nearing the $20 level but has since lowered to $20. Fear regarding global economic impact following China’s Evergrande fallout caused some early week volatility as we continue monitoring the issue. We recommend watching the critical support levels on the SPY at $434 and $420 as we still expect some short-term correction to continue this week and potentially next week as well. ABDE, LEN, and FDX headline earnings this week along with today’s Fed decision. Key economic reports due this week include August building permits and housing starts, as well as leading economic indicators report and additional comments from Fed Chair Powell on Friday. Last week, markets saw positive support pushing towards the upside following the Fed’s reassurance of transitory inflation. Earnings and the bond market will continue to dictate market movement as well as response COVID infection rates and Hurricane Ida’s impact. We encourage all market commentary readers to maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
After the conclusion of the Federal Open Market Committee today, Fed Chair Jerome Powell met with the press and announced the latest changes to the Fed policy. While interest rates were not changed today, Powell confirmed an interest rate increase next year is very likely. Multiple rates are now expected while also confirming bond-buying programs will be scaled back. Following this announcement, markets retreated off highs but remained impressively higher. Likewise, Powell also urged Congress to raise the debt ceiling. Globally, both Asian markets traded to mixed results while European markets closed higher.
Key U.S. Economic Reports/Events This Week:
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.
The symbol is trading at $606.63 with a vector of +0.16% at the time of publication.
10-Day 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, tmo. 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 $71.99 per barrel, up 2.13% 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 $50.69 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 0.55% at $1768.40 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 $167.83 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, at 1.311% at the time of publication.
The yield on the 30-year Treasury note is down, at 1.815% 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 $25.71 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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