Markets rally around earnings and push past tax cut plan delays.

We’re seeing major U.S. indices moving along the path of least resistance. In this case, that path is further upwards with intraday records set by the DJIA, S&P 500 and the Nasdaq. Although a release of Republican tax-cut plan details is delayed by a day, there is enough activity and impending news to hold investor attention for the time being. Most notably is the coming announcement of President Trump’s choice for the next Federal Reserve leader. There is a nearly unanimous expectation from market participants that this choice will be Fed Gov. Jerome Powell.  The Fed made a policy announcement today at 2 p.m. Eastern time and showed optimism that inflation would reach its 2% goal within the medium term. This is indicative of a probable rate hike in December, even if inflation rates do not hit 2% by then.   

An oil rally has also worked to boost market performance, as energy and financial stocks take the lead for gains in today’s trading.

At the time of publication, the DJIA is up 0.19%, or 44 points, at 23,421. The S&P 500 is trading at 2,580- up 0.19% from the open. The Nasdaq-100 is down 0.12% at 6,720.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows  overall negative signals. Today’s positive vector figure of +0.06% moves to -0.07% within three trading sessions.  Today’s predicted support and resistance is 2,573.91 (± 2.60) and 2,581.61 (± 2.61), respectively. The predicted close today is 2,576.79. 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 October 26, our Premium Member Picks service- which is exclusive to our Premium membership plan- closed a successful long position for Home Depot (HD).

Trade Breakdown

The position was opened on October 2, and we saw a Net Stock Gain of $4.09 (56.81%), a Net Options Gain of $2.25 (35.43%) and a Net Options Spread Gain of $1.00 (35.09%).  The Max Loss for the Stock Trade was $7.20, the Max Loss for the Option Trade was $6.35, and the Max Loss for the Option Spread Trade was $2.85.

Must-buy Stock for Thursday

Our must-buy stock for Thursday is Intel Corp. (INTC). The stock shows a powerful bullish uptrend 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 relative to our entire data universe. Our 10-day prediction model shows vector figures shooting above +4.00% within the next trading session. Our benchmark for vector figures is +1.00%.

The stock is trading at $46.10 at the time of publication, up 1.35% from the open with a +1.33% vector figure.

Thursday’s prediction shows an open price of $47.11, a low of $46.72 and a high of $47.91.

The predicted close for Thursday is $47.85. Vector figures show +4.67% for tomorrow, which continues to build up incrementally in the following trading sessions.  

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.

Crude oil is seeing a rally today as investors look at a likely OPEC production-cut extension in the near future, as well as U.S. crude supply data showing significant drops. The two factors are compounding to firm up support in per-barrel crude prices, and active U.S. rig counts in recent weeks have not increased too sharply.  West Texas Intermediate for November delivery is priced at $54.38 per barrel at the time of publication, up 0.28% from the open.  

Looking at USO, a crude oil tracker, our 10-day prediction model shows initial negative signals followed by a positive correction. The fund is trading at $10.94 at the time of publication, which is up 0.05% from the open. Today’s prediction sees support at $10.70 (± 0.04) and resistance at $10.95 (± 0.04). The predicted close for today is $10.92. Vector figures show -0.16% today, moving to +0.64% in three trading sessions and continues a positive uptrend. 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 December gold is up 0.57% at $1,277.70 a troy ounce at the time of publication. Gold futures had fluctuated due to two economic reports- a positive private payrolls report against negative ISM manufacturing index data. The yellow-metal is continuing its rise, with many analysts attributing this to short-covering preceding the impending Fed leadership appointment and today’s optimistic policy announcement.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows consistent negative signals. The gold proxy is trading at $121.31, up 0.53% at the time of publication. Today’s predicted low is $120.14 (± 0.20) and the predicted high is $120.67 (± 0.21). The predicted close today is $120.41. 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

Yields fluctuated but eventually steadied in Wednesday’s trading as investors digest an afternoon policy update from the Fed. There is also a possibility that the next leader of the Federal Reserve will be announced as early as tomorrow. The two candidates are Stanford’s John Taylor, the more hawkish pick, and the more dovish Fed Gov. Jerome Powell. Most are expecting a Powell pick for chairman, but a Taylor nomination would mean more hawkish policy. The uncertainty around this is also driving trading in treasuries today. The yield on the 10-year Treasury note is down 0.27% at 2.37% at the time of publication. Bond prices tend to move inversely to yields.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see initial negative signals followed by a bullish uptrend in our 10-day prediction window. Today’s vector of -0.14% reverses to +0.18% within three trading sessions. The ETF is priced at $124.63 at the time of publication- up 0.35% from the open. The predicted close today is $124.26 with a low and high of $124.14 (± 0.26) and $124.46 (± 0.26), 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 2.16% to 10.40 at the time of publication, and our 10-day prediction window shows overall negative signals.  The predicted close today 9.91 with a positive vector of +0.65%. Today’s predicted lows and highs are 9.83 (± 0.18) and 10.03 (± 0.18), 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.