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Following one of the strongest rebounds this century, we are keeping our strategy in place: avoid chasing rallies, buy when market sells off. The market was able to rebound from December lows but could revert to $254-$257 level for SPY in the next 2-3 weeks. Still, we do not see the market retesting the historic lows of December 2018. Based off most technical indicators, the market is overbought and we discourage investors from chasing the market. Today we will see an increased number of earnings released which will continue through next week when over 300 companies report fourth-quarter figures. The government shutdown continues into its fifth week as Congress looks for a resolution while the State of the Union address has been postponed. Although the government shutdown and global trade concerns are weighing on stocks, major U.S. indices are split today with both Dow and S&P in the red while the Nasdaq is modestly up. By the end of the first quarter of 2019, we believe the market will rebound to $274-$280 level. For reference, the SPY Seasonal Chart is shown below:
This morning’s premarket releases included American Airlines, Southwest Airlines, and JetBlue Airways, all of which reported above and sent shares rallying between 3-5%. Major earnings to monitor after the closing bell includes Starbucks, which is currently lowering amid China trade concerns, and Intel, currently up 3% behind optimism earnings will beat expectations. Discover, ETrade, and Air Alaska are also scheduled to report after close while companies such as Apple, Facebook, Microsoft, and Tesla report next week.
President Trump recently announced he will postpone the scheduled State of the Union address until after the partial government shutdown is resolved. Dueling bills were recently shut down in Congress as they were both likely to come up short on votes and now policymakers are looking at a short term solution to end the shutdown while long term negotiations for funding continue. Also converging in D.C. after a scrapped meeting between U.S. and Chinese delegates that was announced yesterday, U.S. officials are now considering the possibility that tariff standoff will continue past the March deadline the two sides set. If no resolution is agreed upon by March, Trump has promised to increase tariffs by 15%, from 10% to 25%, on $200 billion of Chinese imports. Also pressuring stocks today were comments from Commerce Secretary Wilbur Ross that the two sides are far apart from an agreement. Asian markets are up today, apart from Japan’s Nikkei index; while European markets are also up, apart from UK’s FTSE 100 currently down likely due to Brexit pressure.
Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows mixed signals. Today’s vector figure of +0.15% moves to +1.46% 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.
Even with increased volatility, Tradespoon technology has been able to provide strong results and accuracy in our post-selloff trading. During last week’s volatility (1/14-1/18) we recorded 70% winning trades, 21 out of 30!
Trade Breakdown
On January 16th, we entered a position on Ball Corp at $49.20 and exited the stock at $49.37 (10.62% Net Gain!), and that’s just one of many winning trades we had that week!
That can turn $100,000 into $1,164,415 in just 18 months!
Highlight of a Recent Winning Trade
On January 23rd, our ActiveTrader service produced a bullish recommendation for The AES Corporation (AES). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
AES opened in its forecasted Strategy B Entry 1 price range $15.61 (± 0.11) and passed through its Target price $15.77 within the second hour of trading, reaching a high of $15.84. The Stop Loss price was set at $15.45.
Our featured stock for Friday is Schlumberger N.V. (SLB). SLB is showing a confident vector trend in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (A) indicating it ranks in the top 10th percentile for accuracy for predicted support and resistance, relative to our entire data universe.
*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.
The stock is trading at $43.74 at the time of publication, up 1.00% from the open with a +1.02% 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 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 March delivery (CLH9) is priced at $53.27 per barrel, up 1.24% from the open, at the time of publication. Looking at USO, a crude oil tracker, our 10-day prediction model shows mostly positive signals. The fund is trading at $11.18 at the time of publication, up 1.22% from the open. Vector figures show -0.16% today, which turns +0.71% 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 April gold (GCJ9) is down 0.40% at $1,285.10 at the time of publication. Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows all negative signals. The gold proxy is trading at $120.98, down 0.25% 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 down 0.95% at 2.72% at the time of publication. The yield on the 30-year Treasury note is down 0.89% at 3.04% 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 -0.73% moves to -1.71% 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 2.51% at $19.03 at the time of publication, and our 10-day prediction window shows negative signals. The predicted close for tomorrow is $20.30 with a vector of -0.06%. 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.
That can turn $100,000 into $1,164,415 in just 18 months!
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