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Stocks traded lower for the second straight session as the Fed minutes revealed a rapid balance sheet reduction plan. Nasdaq led in losses, down 2.2%, while the S&P and Dow also finished in the red, this comes after several weeks of solid gains. In the FOMC minutes, the Fed outlined a tentative plan, which could begin as soon as May, to reduce its balance sheet by $95 billion each month. The minutes also allowed for a rise in interest rates of more than half a percent, as well as sales of its mortgage bond portfolio. The $9 trillion balance sheet was prominent in the meeting as the Fed discussed ways to shrink its balance; meanwhile, rising yields continue to pressure assets. Investors appeared to move out of the tech sector as interest rates rose and their valuations deteriorated, with chip-makers seeing large losses including Nvidia, Marvell, and Micron. Apart from weekly employment data, tomorrow February consumer Credit will release while next week will feature monthly Core CPI, Federal Budget, and Retail sales.
The $VIX has moved slightly higher, trading near the 24 level. Geopolitical risks in Ukraine and Fed’s balance sheet reduction can impact the next move in the market. We are watching the overhead resistance levels in the SPY, which are presently at $465 and then $474. The $SPY support is at $448 and then $438. We expect the market to continue to trade higher in the next two to six weeks. In the short term, the market is oversold and will start the bottoming process in the next few sessions. Globally, Asian markets traded to mixed results while European markets closed in the red. We encourage all market commentary readers to maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term mixed outlook. 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.
The symbol is trading at $55.04 with a vector of -0.97% at the time of publication.
10-Day 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 have a position in the featured symbol, alk. 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 $97.61 per barrel, up 1.45% 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 $76.86 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 up 0.25% at $1927.90 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 $180.37 at the time of publication. Vector signals show -0.12% 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, at 2.550% at the time of publication.
The yield on the 30-year Treasury note is up, at 2.632% 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 $22.1 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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