Markets sheltered from the storm as all major indices trading higher

September 11, 2017

By Vlad Karpel

Investors are digesting news and analysis outlooks following the destruction caused by Hurricane Irma. Although the storm had not hit as hard as expected, the months to come will weigh on markets as economic impact is assessed more thoroughly. Although threatened North Korean missile tests did not occur in recent days, a U.N. Security Council vote today on a resolution to hit the DPRK with more sanctions may change this scenario. We’re seeing an insurance sector rally today as market participants receive news of Irma’s less-than-expected destructive force and the likelihood that it will soon be downgraded to a tropical storm. Treasury yields are also climbing today as tensions ease around North Korea and the brunt of Irma’s force has passed. Watch for a rotation from defensive positions into risk-assets, as well as an uptick in short-covering to reclaim fear-based positions from last week.

The DJIA is currently up 1.13%, or 246.70 points, at 22,044. The S&P 500 is currently trading at 2,486- up 1.02% from the open. The Nasdaq-100 is up 1.08% at 6,428.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows overall positive signals. Today’s positive vector figure of +0.09% fluctuates throughout the forecast but only sees negative movement for one session. Today’s predicted support and resistance is 2,458.91 (± 3.78) and 2,475.11 (± 3.81), respectively. The predicted close today is 2,463.88. 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 September 7, we closed several successful intraday trades in our Live Trading Room– one of which was a recently recommended stock: Gilead Sciences (GILD).

Trade Breakdown

This trade was opened and closed on 9/7/17, with a net gain of $0.45 (52.94%). We entered the position at $82.95, set a Stop Loss of $82.10 and exited the position at $83.40. The total risk was $0.85.

Note: Trade % Gain/Loss is calculated by dividing the $ Gain/Loss by the Max Risk which is the posted Stop Loss for the trade.

Must-buy Stock for Tuesday

Oracle Corp. (ORCL), a global leader in enterprise software continues to show positive signals in our Stock Forecast Toolbox’s 10-day forecast. A transformative deal with a major U.S bank and a welcomed shift to its burgeoning cloud business continue to entice investors. Our 10-day prediction model shows positive vector signals holding above +1% for the duration of the forecast.

The stock is currently trading at $52.37, up 1.53% from the open with a +0.89% vector figure for today.

Tuesday’s prediction shows an open price of $52.43, a low of $52.15 and a high of $52.82.

The predicted close for Tuesday is $52.26. Vector figures show +1.46% for Tuesday and continue to climb toward +4% at the end of the forecast

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 figures calculate the change of the Forecasted Average Price relative to “today’s” actual price. The figure 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.

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Oil

Volatility in crude oil persisted today as market participants continue to review the impact Hurricane Harvey’s impact on refinery operations, as well as Irma’s effect on Florida’s crude demand. Although Irma had been downgraded and hit with less intensity than expected, the ongoing situation is injecting volatility in the demand for oil in the region. West Texas Intermediate for October delivery is currently priced at $48.03 per barrel, up 1.18% from the open. WTI had hit a low of $47.00 before bouncing back.

Looking at USO, a crude oil tracker, our 10-day prediction model shows initial negative signals followed by a positive correction. The fund is currently trading at $9.85, which is up 1.23% from the open. Today’s prediction sees support at $9.57 (± 0.04) and resistance at $9.97 (± 0.04). The predicted close for today is $9.58. Vector figures show -1.40% today which reverse to +1.51% within four 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.

Gold

The price for December gold is currently down 1.07% at $1,337.10 a troy ounce. Investors are rotating back into risk-assets as tensions with North Korea and fear around the impact of Hurricane Irma eased. North Korean geopolitical fears will likely shift back to the forefront of investor sentiments after a U.N. Security Council resolution for tougher sanctions is voted on today. North Korea’s state-run news agency has already released a threatening statement today. The statement indicated that, in the event of harsher sanctions levied, the DPRK “…shall make absolutely sure that the U.S pays due price,”.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows overall positive signals. The gold proxy is currently trading at $126.67, down 1.02%. Today’s predicted low is $127.83 (± 0.28) and the predicted high is $128.83 (± 0.29). The predicted close today is $127.96. 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

Treasury yields are climbing today as investors make moves to risk-assets following a cool-down of the aforementioned geopolitical and natural disaster fears. Bond market participants are also evaluating the chances of another Fed rate hike this year. The yield on the 10-year Treasury note is currently up 3.30% at 2.11%. 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 overall positive signals in our 10-day prediction window. Today’s vector of +0.11% fluctuates throughout the forecast but only dips into negative territory for one session. The ETF is currently priced at $127.50- down 1.16% from the open. The predicted close today is $129.10 with a low and high of $128.95 (± 0.21) and $129.43 (± 0.21), 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 currently down 10.97% at 10.79, and our 10-day prediction window shows continued negative signals. The predicted close today is 9.40 with a negative vector of -13.21%. Today’s predicted lows and highs are 8.39 (± 0.22) and 12.12 (± 0.32), 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.