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After all three major U.S. indices reported record finishes yesterday, markets faced early morning pressure today behind growing global concerns regarding the latest Cornavirus developments. With the current death toll over 1,300, confirmed cases increased significantly after China implanted a new diagnostic system and added an additional 15,000 cases yesterday, increasing the total number of confirmed cases to 60,000. In earnings news, Cisco and PepsiCo shares are moving in opposite directions after their respective earnings released; with PepsiCo rising behind a solid revenue report while Cisco is down over 4%. Currently, SPY support remains near $330 level and we will continue looking for buying opportunities near $330. We expect a shallow 1-2% correction in the marker next 4-6 weeks. At this point, the bull market has resumed and started to rally a couple of weeks earlier than we expected. Keep an eye on treasury and gold levels. Despite the broad-based rally, gold and treasure and U.S. dollar remain at elevated levels. At this point, there is more risk to the downside than to the upside and we discourage readers from chasing the market rally at this time. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Yesterday, Fed Chair Powell concluded his second day of congressional testimony in D.C. stating the U.S. economy is in a “very good place.” This, along with the continued roll-out of mostly positive earnings reports, helped shares hit record finishes yesterday with several key earnings and economic reports still due. January Retail Sales and Industrial Production, along with Business Inventories and Consumer Sentiment, will release tomorrow while key earnings to track include Nvidia after market close today and Canopy Growth tomorrow. Today, before the market open PepsiCo and Alibaba Group released their corporate earnings, both seeing shares rise. Next week look out for Walmart and big-name energy companies to report, as well as the latest FOMC minutes.
Globally, both Asian and European markets closed in the red. The latest development on the Coronavirus has a new diagnostic method severely increasing the reported number of confirmed cases while the death toll has now eclipsed 1,300. Over 60,000 confirmed cases are now being reported out of China as the nation continues containment and vaccine efforts. Tomorrow, several key duties will be lifted as part of the “phase one” U.S.-China trade deal.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term positive outlook. Today’s vector figure of +0.31% moves to +2.32% in four trading sessions. 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 February 3rd, our ActiveTrader service produced a bullish recommendation for Pultegroup (PHM). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
PHM entered its forecasted Strategy A Entry 1 price range $44.65(± 0.20) in its first hour of trading that day and passed through its Target price of $45.10 in the fourth hour of trading on February 5th. The Stop Loss price was set at $44.20.
Our featured symbol for Friday is Adobe Inc. (ADBE). ADBE is showing a positive vector 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 current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $376.66 at the time of publication, with a +0.41% vector figure.
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 not have a position in the featured symbol, ADBE. 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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $51.59 per barrel, up 0.84% 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 $10.84 at the time of publication. Vector figures show -0.98% today, which turns to -0.55% in three trading sessions. 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 up 0.45% at $1,578.80 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 $148.31, at the time of publication. Vector signals show +0.13% 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 0.82% at 1.61% at the time of publication.
The yield on the 30-year Treasury note is down 1.12% 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 -0.22% moves to +0.36% in three sessions. 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 $14.25 at the time of publication, and our 10-day prediction window shows negative 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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