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U.S. markets are continuing to trade higher as strong economic data and solid earnings offer support amid Coronavirus concerns. In China, the Coronavirus has surpassed the nation’s previous viral outbreak SARS death toll with over 900 death currently, however, previously shut-down retail and factory locations due to the virus have begun to reopen. Still, Asian markets closed to mixed results today while European markets finished in the red. This week, Fed Chair Powell’s Congressional Testimony will be in focus as well as the continuation of corporate earnings season. Economic reports to track this week include Federal Budget, Core CPI, and Retail Sales while big-name earnings data will come from PepsiCo, Cisco, CVS, Lyft, and Kraft-Heinz. With the market range-bound at $324-$333, we will look for buying opportunities near $324 while shorting the market near the $330-$333 level. With this in mind, we remain bullish through this earnings season and expect a 1-2% correction as we lose momentum in the next 4-6 weeks. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
All three major U.S. indices recorded solid gains today as earnings season and strong economic reports continue pushing shares higher. Last week, market pressure from the Coronavirus was countered with a strong majority of earnings releasing better than expected results and/or guidance. Also helping were several consumer and employment reports which furthered the notion highlighted in the latest Beige Book, displaying moderate growth throughout the U.S. economic landscape. This week, look out for the following major economic reports: Job Openings, Household Debt, Federal Budget, Core CPI, Retail Sales, and Industrial Production. Earnings in focus this week will include PepsiCo, Cisco, CVS, Kraft-Heinz, Lyft, PepsiCo, Hilton Worldwide, Alibaba, Nvidia, Duke Energy, and Canopy Growth.
Overseas, Asian markets closed to mixed results while markets in Europe closed in the red. The Chinese Coronavirus has exceeded the death toll of their previous fatal viral outbreak, SARS, with currently over 900 deaths and over 5,000 reported infections. As containment and vaccine efforts continue, several major retailers and factories are re-opening their doors this week while national health organizations continue to warn over the further spread of the virus. Look out of additional info coming out of China regarding its efforts to contain the disease, as well as the upcoming Feb. 14 date for lifting several major duties as a result 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 +0.33% moves to +3.20% 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 Tuesday is Paypal Holdings (PYPL). PYPL 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 $118.88 at the time of publication, with a +0.52% 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, PYPL. 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 $49.64 per barrel, down 1.35% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mostly negative signals. The fund is trading at $10.58 at the time of publication. Vector figures show -0.19% today, which turns to -1.35% 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 0.18% at $1,576.20 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 $147.79, at the time of publication. Vector signals show -0.25% 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 1.25% at 1.56% at the time of publication.
The yield on the 30-year Treasury note is down 0.78% at 2.03% 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 negative signals in our 10-day prediction window. Today’s vector of +0.13% moves to -1.14% 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 $15.02 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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