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Markets are experiencing a slight rebound following two days of trading lower behind tariff escalation and global trade uncertainty. All three major U.S. indices are currently trading higher following positive earnings beat from Macy’s and Alibaba, ahead of Cisco’s release today after market close and Walmart’s release tomorrow before the market opens. Retail data for the month of April underwhelmed while China’s retail data lowered to a 16-year low. U.S. housing and labor data is due tomorrow while overseas it appears the U.K. is gearing up for another Brexit vote. With the market closing below its 50-days moving average yesterday, the SPY broke its support at $286 support. As long as the market continues to trade below 50-days moving average we expect volatility to persist. It is too early to think we are in a bear market but if further tariffs are imposed, expect the market to break 200-day moving average on SPY. For reference, the SPY Seasonal Chart is shown below:
Joining the three major U.S. indices today in the green are the three index futures as well as gold and oil. Major corporate earnings in focus today include Cisco after the market closes while Macy’s and Alibaba have already reported. Macy’s report beat expectations for first-quarter profits but shares are currently trading lower while Alibaba shares saw a decent spike following the positive earnings release. Earnings focus will turn to tomorrow’s Walmart release, America’s largest retailer, as well as Samsung and Nvidia. For the rest of the week, keep an eye out for housing starts, building permits, weekly jobless claims, and consumer sentiment index.
Globally, Asian and European markets rallied following softer trade rhetoric from both the U.S. and China. Although further tariffs could still be in play, for now, it seems markets have cooled from the early-week uncertainty that triggered substantial selloffs. Both sides would like to avoid further tariffs though no plans of a formal meeting between the two have been scheduled outside of next month’s G20 summit where both President Trump and President Xi will be present. In other global news, it looks like the U.K. parliament is gearing up for another vote, also possibly taking place next month. With most global markets trading higher today look for further clarity on these developments as earnings season wraps up.
Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows negative signals. Today’s vector figure of -0.22% moves to -3.70% in five trading sessions. Prediction data is uploaded after the market close at 6 PM, CST. Today’s data is based on market signals from the previous trading session.
On April 25th, our ActiveTrader service produced a bullish recommendation for Constellation Brands Inc (STZ). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
STZ entered its forecasted Strategy B Entry 1 price range $210.14 (± 1.90) in its first hour of trading and passed through its Target price $212.24 in the first hour of trading that day. The Stop Loss price was set at $208.04.
*Please note: Our featured stock 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 (VXX). VXX is showing a confident vector trend in our Stock Forecast Toolbox’s 10-day forecast.
The ETF is trading at $29.43 at the time of publication, down 4.00% from the open with a +1.12% 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.
Oil
West Texas Intermediate for June delivery (CLM9) is priced at $62.21 per barrel, up 0.70% 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 $12.95 at the time of publication, up 1.00% from the open. Vector figures show +0.06% today, which turns -0.33% 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.
Gold
The price for June gold (GCM9) is up 0.03% at $1,296.80 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mostly negative signals. The gold proxy is trading at $122.35 at the time of publication. Vector signals show +0.24% 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.
Treasuries
The yield on the 10-year Treasury note is down 1.21% at 2.38% at the time of publication. The yield on the 30-year Treasury note is down 0.80% at 2.83% 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 positive signals in our 10-day prediction window. Today’s vector of +0.09% moves to +0.81% 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.
Volatility
The CBOE Volatility Index (^VIX) is down 8.36% at $16.55 at the time of publication, and our 10-day prediction window shows positive signals. The predicted close for tomorrow is $19.54 with a vector of +5.80%. 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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