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Markets are trading lower to open the week after an impressive streak of gains for U.S. markets was contrasted with record unemployment last week. Although the S&P, Nasdaq, and Dow all recorded near-record gains last week, unemployment continued to expand, with an additional 6 million workers filing for benefits last week. The latest economic data continues to illuminate the COVID’s impact on the economy which will further be seen within the upcoming earnings season. Globally, Asian markets closed to mixed results while European markets traded higher as both are seeing a slow down of reported cases. In the U.S., the number of total cases has eclipsed 500,000 with 23,000 deaths and over 30,000 having reported successful recovery. Elsewhere, oil saw added pressures following OPEC’s decision to cut output. With the current market conditions in mind, we believe the market is susceptible to a 10-20% selloff from current SPY levels. Although the worst part of the selloff is behind us, investors should consider hedging portfolios into the rallies. Our opinion remains: the market is overbought in the short term and long-term investors can consider buying equities with dollar-cost averaging in mind. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Although markets saw impressive gains recorded last week, several alarming economic data points created tension heading into this week. With the upcoming earnings season in mind, the first wave of economic reports showing COVID impact were reported. Unemployment headlined the negative data points with an additional 6 million applying for unemployment the week prior, bringing the three week total to 16 million. Additional factors impacting markets today include the OPEC decision to cut output, ending a long price war between Russia and Saudi Arabia, flooding the market with low crude prices which triggered additional volatility and selloffs.
Several stocks booked impressive gains today, including:
Oil traded lower for the majority of the day following the OPEC news while gold traded higher. Both the dollar and U.S. Treasury yields saw modest movement lower.
Key U.S. Economic Reports Out This Week:
Key Corporate Earnings Out This Week:
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term positive 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.
On April 3rd, our ActiveTrader service produced a bullish recommendation for Gilead Sciences Inc (GILD). ActiveTrader is included in several Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
GILD entered its forecasted Strategy B Entry 1 price range $76.98(± 0.77) in the second hour of trading that day and passed through its Target price of $77.75 in the fourth hour of trading that day. The Stop Loss price was set at $76.21.
Our featured symbol for Tuesday is General Mills (GIS). GIS is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (A) indicating it ranks in the top 10th percentile for accuracy for current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $57.4, with a vector of -1.72% 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.
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, GIS. 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 $22.39 per barrel, down 1.63% 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 $5.48 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.
Gold
The price for the Gold Continuous Contract (GC00) is up 0.60% at $1,763.50 at the time of publication.
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 $156.88, at the time of publication. Vector signals show +0.30% 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 to 0.769% at the time of publication.
The yield on the 30-year Treasury note is up to 1.409% 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.
Volatility
The CBOE Volatility Index (^VIX) is $45.24 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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