Indexes gain and oil looks up as the Dow strikes at 20,000

The major indexes are making gains today and the Dow is continuing its climb to 20,000. The DJIA is currently up 42.98 points from the open at 19924.94 with some gains coming from boosted financials. The Nasdaq-100 is up 0.73% at 5468.98 and the S&P 500 is up 10.91 points, or 0.48% at 2268.74.

Using the ^GSPC symbol to analyze the S&P 500, our prediction model shows slight pullbacks with a late reversal at the end of the 10-day window.  The predicted close today is 2269.56, with predicted support and resistance at 2261.29 (± 3.89) and 2272.48 (± 3.91), respectively.

Upcoming Events and Reports

The minutes from the December 13-14 FOMC meeting will be released at 2 p.m Eastern Time. In this meeting, the Fed decided on raising interest rates and indicated more hikes than anticipated for 2017.   

The American Petroleum Institute will be releasing figures for U.S supplies this afternoon, and the Energy Information Administration will release their figures on Thursday.

Oil

After taking a nosedive on Tuesday, crude oil futures are surging back as an indicator of commitments to global production caps. Kuwait Petroleum Company, a state-owned entity, announced its commitment to the agreement which eased tensions for investors.   The OPEC deal will rely on verified compliance, which has been shaky in the past. A strong US dollar would normally precede oil selloffs, but an atmosphere of trust and compliance in the formative period of OPEC agreements may counter this. Currently, crude futures are priced at $52.98 per-barrel, up 1.24% from today’s open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows a slight dip with positive corrections. The fund is currently trading at 11.5 and today’s prediction sees support at 11.42 (± 0.09) and resistance at 11.91 (± 0.09). The predicted close for today is 11.42.  

Gold

The yellow metal is rising today against a slumping US dollar, the currency in which the non-fiat asset is priced in. Gold for February delivery is up 3 points at $1165, and may continue to attract investors during the early stages of the Trump administration. Investors are watching for interest rates, fiscal policy and inflation in these moments.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows strong consistent gains. The gold proxy is currently trading at 110.855. Today’s predicted low is 109.94 (± 0.27) and the predicted high is 111.81 (± 0.27). The predicted close today is 111.19. Positive vector figures climb from ~1% to ~4% at the end of the window, relative to current conditions.  

Treasuries

The anticipation of increased fiscal spending, a simulated economy and lower taxes are likely to cause the Fed to hike rates more often this year. This environment would cause yields to rise and the price of bonds to fall in general. Using the iShares 20+ Year Treasury Bond ETF (TLT) in our Stock Forecast Tool, we see this reflected in the 10-day prediction window.

TLT, an ETF which tracks 20+ year bond returns, is currently at 119.735. The predicted close today is 120 with a low and high of 118.66 (± 0.30) and 120.46 (± 0.31), respectively. Strong, positive vector movements rise above 2% toward the end of the window, relative to today’s numbers.

Volatility

The CBOE Volatility Index (VIX) is currently at 12.1, which is a drop of over 5%. Our 10-day model shows a strong reversal with positive vector figures climbing above 10% relative to now. The predicted close today is 13.46. Today’s predicted lows and highs are 12.85 (± 0.28) and 15.56 (± 0.34), respectively.

Other news

Jen-Hsun Huang, CEO of Nvidia Corp., will be giving the evening keynote speech at CES tonight. This is unprecedented as these speeches have been made by leaders from Microsoft and Nvidia’s current rival, Intel.  Much of its success is due to successfully entering nascent spaces like deep-learning, AI, and self-driving vehicles.

Tesla saw a 2.4% dip in shares Tuesday evening, following a report which included short-term production challenges. Shares are up 4% today, however, and overall the company has produced record orders for their Model S and Model X cars.

Another development from CES is the unveiling of a potential rival to Tesla’s Model S. A lesser-known startup called Faraday Futures has been trying to break into this market. A four-door sport-utility style vehicle called the FF 91 was showcased last night, and will be in production in 2018. There are doubts around the company’s future and this was an attempt to dispel uncertainty.