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All three major U.S. indices closed in the green today after seeing mixed results on Tuesday. Growing Coronvirus concerns continue to pressure global markets, with over 2,000 confirmed deaths, while U.S. markets are seeing support from strong economic reports and the tail end of earnings season. Today, minutes from last month’s FOMC will be released as well as housing starts and building permits data for the month of January. Tomorrow, investors should look out for weekly employment data and several notable earnings reports including Southern Company, Baxter International, CBS, American Electric Power, Dropbox, and Six Flags. In the next 4-6 weeks, we are expecting a shallow 1-2% correction and we will continue looking for buying opportunities near $330, the current SPY support level. The bull market has resumed and started to rally a couple of weeks earlier than we expected; keep an eye on treasury and gold levels. Despite the broad-based rally, gold and treasure and U.S. dollar remain at elevated levels. At this point, there is more risk to the downside than to the upside and we discourage readers from chasing the market rally at this time. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Today’s major market-driver was the minutes from last month’s FOMC in which Fed members noted an uptick in the economy, far better than expected. Still, several global concerns, including the Coronavirus and tension in the Middle East, worried the Fed members enough to consider a rate cut rather than raise. With this in mind, Fed members will be monitoring these global developments as well as the regular indicators for the Fed which include employment, inflation, and the overall health of the U.S. economy. Other notable factors to move the market today include updates on the viral outbreak in China as well as several earnings reports.
Key earnings released today include Avis Budget, Blue Apron, Dish Network, Hyatt Hotels, and Wingstop. Tomorrow, we will be seeing corporate earnings data from AEP, DPZ, DBX, HRL, RMAX, SIX, SO, and VIAC. As earnings season continues to wind down, look for global developments to dictate markets. Both the U.S. and China will look to continue trade negotiations after Coronavirus concerns are handled while rising tension in the Middle East could also impact stocks. Globally, Asian markets closed to mixed results while European markets traded higher. Gold is on track for its fifth straight session of gains while both treasury notes and the dollar saw nice gains as well.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term positive outlook. Today’s vector figure of +0.28% moves to +1.15% in four trading sessions. Prediction data is uploaded after the market closes at 6 p.m. CST. Today’s data is based on market signals from the previous trading session.
On February 3rd, our ActiveTrader service produced a bullish recommendation for Pultegroup (PHM). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
PHM entered its forecasted Strategy A Entry 1 price range $44.65(± 0.20) in its first hour of trading that day and passed through its Target price of $45.10 in the fourth hour of trading on February 5th. The Stop Loss price was set at $44.20.
Our featured symbol for Thursday is Visa Inc (V). V is showing a positive vector 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 current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $213.31 at the time of publication, with a +0.62% vector figure.
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.
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 not have a position in the featured symbol, V. 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 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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $53.56 per barrel, up 2.90% 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 $11.18 at the time of publication. Vector figures show +0.94% today, which turns to +3.12% in three trading sessions. 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 up 0.69% at $1,614.60 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows negative signals. The gold proxy is trading at $151.79, at the time of publication. Vector signals show -1.16% 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 up 0.28% at 1.57% at the time of publication.
The yield on the 30-year Treasury note is up 0.17% at 2.02% 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 mostly negative signals in our 10-day prediction window. Today’s vector of -0.34% moves to -1.36% in three sessions. 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 $14.38 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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