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Concerns over a hawkish U.S. stance on trade with China continues to fuel speculation of a global trade war as the Trump administration moves forward with tariffs on steel on aluminum. Also gaining global attention will be this week’s Federal Reserve two-day meeting of the Federal Open Market Committee that will likely result in raised interest rates come Wednesday. This will be the first meeting headed by new Chairman Jerome Powell since he succeeded Janet Yellen in February. While the hiked rates are expected, investors are unsure where the rates will be by the year’s end and on. Some analysts expect a boost to the dollar in the coming year while others worry this will likely reduce the attractiveness of riskier assets like stocks. Other big news saw Facebook hit a sharp decline in shares, likely increasing to the continued negative tone of Monday that saw a continuation of last week’s decline in both the S&P 500 and the Nasdaq. However, totals for the year should be noted are still positive as the S&P is up 2.4% while the Nasdaq is up 7.4% for 2018.
Facebook shares saw a 4.7% drop in premyeaharket trading as the social-media giant faced major backlash and questions regarding how they manage user data. Major interest came from news that a firm with ties to 2016 Trump campaign kept user data for years despite claiming to have destroyed it. Criticism centered on Facebook’s management of third-party access to user information as well as management of user data and resulted in heavy selling pressure of Facebook shares, one of the largest weights in both the Nasdaq and the S&P.
Globally, Brexit negotiations are moving along as both the U.K. and the EU agreed to a transition period from March 2019 through the end of 2020. The U.K. will continue to be bound by single market rules but will not take part in EU decision making. Following the news of a transition deal, the pound jumped significantly.
At the time of publication, the DJIA is down 1.11%, or 275.95 points, at 24,753.20. The S&P 500 is at 2,719.24 – down 1.19% from the open. The Nasdaq-100 is down 1.79% at 7,403.41.
Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows positive signals. Today’s vector figure of -0.07% moves to -0.75% within four trading sessions. Today’s predicted support and resistance levels are 2,735.53 (±18.50) and 2,762.44 (± 18.69), respectively. The predicted close today is 2,756.40. 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.
Highlight of a Recent Winning Trade
On March 14, our ActiveTrader service produced a bullish recommendation for E*TRADE Financial Corporation (ETFC). ActiveTrader, included in all paid Tradespoon membership plans, is designed for intraday trading.
Trade Breakdown
ETFC opened within the Entry 1 price range of $56.86 (± 0.52) at $56.23, moving through its Target Price of $57.43 within the first four hours of trading. The Stop Loss was set at $56.29.
Our featured stock for Tuesday is the American Express Company (AXP). AXP is showing a strong positive trend 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 predicted support and resistance, relative to our entire data universe. Our 10-day prediction model shows positive vector figures gaining above +1.00% in the next two trading sessions. Our benchmark for vector figures is +1.00%.
*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 ActiveInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.
The stock is trading at $94.79 at the time of publication, down 0.85% from the open with a +0.97% vector figure.
Tuesday’s prediction shows an open price of $96.31, a low of $95.19 and a high of $97.44.
The predicted close for Tuesday is $96.71. Vector figures rise to +1.25% on Tuesday, holding above +1.00% throughout the forecast. This is a good signal for trading opportunities, because we use vectors as a primary factor in determining price movements for stocks and ETF.
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 relatively to average of actual prices for last trading session. The column shows expected average price movement “Up or Down”, in percent. Trend traders should trade along predicted direction of the Vector. The higher the value of the Vector the higher its momentum.
Oil
Geopolitical issues in Venezuela and the Middle East continue to lower oil prices. After a steep Friday climb fueled by Saudi Crown Prince Mohammed Bin Salman’s claim while visiting the U.S. last week that Saudi Arabia would develop their own nuclear weapons if Iran did. Tension or conflict between these two nations could disrupt global supplies. Elsewhere, Venezuela saw its February oil output slide to 1.55 million barrels a day, down 60,000 barrels from the previous month. Last week’s monthly oil report from the International Energy Agency increased its predicted global oil demand from the previous month’s report by 1.5 million barrels a day, bringing the 2018 day average to 99.3 million. West Texas Intermediate for April delivery (CLJ8) is priced at $61.79 per barrel at the time of publication, down 0.99% from the open.
Looking at USO, a crude oil tracker, our 10-day prediction model shows overall positive signals. The fund is trading at $12.53 at the time of publication, down 0.16% from the open. Today’s prediction sees support at $12.32 (± 0.06) and resistance at $12.79 (± 0.06). The predicted close for today is $12.72. Vector figures show +1.07% today, which move to +1.24% the following trading session. 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 April gold (GCJ8) is up 0.04% at $1,313.40 at the time of publication. Potential for a global trade war between China and the U.S. continues to affect the potential floor investors see for the gold market. This along with the expected interest rate hike coming from this week’s meeting of the central bank’s policy group has gold on a downbeat tone as the dollar index continues to trade steady. With worries of inflation investors still consider gold a solid hedge but will watch closely as the Feds attempt to thwart excessive inflation with the coming interest rate hikes.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive signals. The gold proxy is trading at $125.1, up 0.40% at the time of publication. Today’s predicted low is $124.60 (± 0.31) and the predicted high is $126.47 (± 0.32). The predicted close today is $125.36. Vector signals show 0.50% for today, holding positive throughout. 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
As investors continue to wait for this week’s Federal Reserve policy meeting, Treasury yields climbed early on Monday before beginning to fall. The yield on the 10-year Treasury note is down .26% at 2.83% at the time of publication. The 30-year is down 0.13% at 3.07%. Analysts expect a quarter percentage point hike to come from the policy meeting which would strongly affect long-dated Treasury issuance. With this week’s policy meeting outcome almost certain, bond investors look ahead at to the possibility of falling bond prices and its effect on the futures market.
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 +0.08% moves to 1.18% in five trading sessions, holding positive and above 1.00% vector throughout. The ETF is priced at $119.78 at the time of publication, down 0.03%. The predicted close today is $119.76 with a low and high of $119.60 (± 0.22) and $120.37 (± 0.24), respectively. 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 up 24.75% at 19.71 at the time of publication, and our 10-day prediction window shows mixed signals. The predicted close for today is 18.56 with a vector of 0.79%. The predicted lows and highs are 15.20 (± 0.96) and 18.86 (± 1.19), respectively. 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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