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Stocks closed modestly higher on Wednesday, following the worst daily losses since June 2020 after consumer price inflation data were released on Tuesday. Despite yesterday’s dip, market losses have been outperforming the yearly average since June. Although volatility was present throughout the day, U.S. stocks were able to maintain slight gains after data revealed that prices for wholesale goods and services declined again for the second month in a row. Released on Tuesday, U.S. CPI increased 0.1% in August and slowed to 8.3% year over year, versus expectations for a monthly decrease of 0.1% and an annual rise of 8%. The core inflation rate additionally rose more than what was anticipated.
Today’s release of the August producer price inflation rate, also known as the Producer Price Index (PPI), showed a 0.1% decrease in August, with fuel costs largely responsible for this decline. Core PPI, which is a separate indicator of wholesale prices that takes out volatile food and energy costs, increased by 0.2% in August. On Thursday, don’t forget to check for the latest reports on retail sales, the import price index, industrial production index, and capacity utilization. And next week from September 20-21, we have the Federal Open Market Committee meeting.
We’re keeping an eye on the SPY’s overhead resistance levels, which are presently at $404 and then $416. The $SPY support level is at $390, with the second round of support just under that—at $380. We anticipate that the market will keep dropping for the next 2-8 weeks. We would be a seller into any further rallies and encourages subscribers not to chase the market at these levels.
Globally, both Asian and European markets closed significantly lower while the VIX traded lower, off its highs near the $28 level and closer to $26. We encourage all market commentary readers to maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
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 have a position in the featured symbol, noc. 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 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 picks, please click here.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $89.09 per barrel, up 2.04%, 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 $72.01 at the time of publication. 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 down 0.60% at $1707.10 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $158.54 at the time of publication. Vector signals show +0.31% 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, at 3.408% at the time of publication.
The yield on the 30-year Treasury note is down, at 3.460% 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. 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 $26.16 at the time of publication, and our 10-day prediction window shows mixed 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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