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With another week of big earnings behind us, investors can look forward to another week of blue-chip earnings from heavyweights like Apple, Kellogg, Berkshire, and more. April is winding down and we look to finish the month trading higher on all three indices. Strong earnings definitely supported this month which saw some early geopolitical action scare investors before focus was fully shifted towards earnings. Stellar earnings followed, with already over half the S&P 500 reporting above expectations, and as another market giant, McDonald’s, reported above expectations some analysts are already considering first-quarter earnings of 2018 to be some of the best ever. Looking at my seasonal charts, I see that while earnings have mostly been positive, predicted support and resistance numbers for SPY have lowered, swapping last week’s support for this week’s resistance. As we near the 270 range we were at just 10-days ago I suggest investors continue to monitor these support and resistance level for the 50-day moving averages in my seasonal charts, updating weekly.
Other companies reporting earnings this week include Under Armour, Humana, CBS, Tesla, and Lowes, however, Apple’s report on Tuesday will certainly be the biggest, carrying the most potential impact. Still, the conversation Monday was less centered on earnings and, surprisingly, more so on mergers. Call it Merger Monday as multiple companies announced acquisitions and buyouts. Headlining the onslaught of weekend mergers is the potential Sprint-T-Mobile merger. Baring antitrust enforcement, the merger would see two of the top four cellular providers merging, once more shrinking the pool of cell-service providers. Industry-wide changes could follow as the $26 billion dollar merger would put 127 million customers in the hands of one company, most likely causing its remaining competition of Verizon, at 140 million customers, and AT&T, at 1340 million customers, to react promptly. Both Sprint and T-Mobile shares slightly fell after the news.
Elsewhere, we saw Marathon Petroleum buy Andeavor for $35 billion, Marriott Vacations Worldwide purchased vacation experience company ILG for $4.7 billion, and Prologis Inc. acquired logistics-property owner DCT Industrial Trust Inc. for $8.4 billion. Only DCT and ILG saw boosts from the news, at 11% and 4% for the day respectively. Making waves overseas, the final merger from the weekend saw Walmart Inc. U.K. business, ASDA Group Ltd, merging with the second largest supermarket chain in the U.K. J Sainsbury PLC, boosting Sainsbury nearly 15%.
Finally, back in the U.S., McDonald’s shares rose 3% in premarket movement as the company was expected to beat earnings, only confirming that notion hours later when earnings were released seeing another 5% spike. Net income rose while revenue declined, pushing the company 13.1% up from last year but still down 8% for the year-to-date.
While no speeches from Fed officials are scheduled this week, we will see the planned two-day meeting of central bank’s policy makers begin on Tuesday.
Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows all negative signals. Today’s vector figure of -.42% moves to -.91% in five trading sessions before dipping further into negative territory. Today’s predicted support and resistance levels are 2,634.45 (±10.40) and 2,681.39 (± 10.59), respectively. The predicted close for tomorrow is 2,671.35. 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.
On April 26, our ActiveTrader service produced a bullish recommendation for Bank of New York Mellon Corporation (BK). ActiveTrader, included in all paid Tradespoon membership plans, is designed for intraday trading.
Trade Breakdown
BK entered Entry 1 price range of $55.06 (± 0.38) in its first hour of trading, moving through its Target Price of $55.61 within the last two hour of trading, reaching $55.71. The Stop Loss was set at $54.51.
Our featured stock for Tuesday is American International Group (AIG). AIG is showing a confident uptrend 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 predicted support and resistance, relative to our entire data universe. Our 10-day prediction model shows positive vector figure reaching +1.00% in four trading session which then incrementally builds above +2.00% throughout the 10-day forecast. AIG is set to report earnings on 5/2/18. Our benchmark for vector figures is +1.00%.
*Please note: Our featured stock 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 ActiveInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.
The stock is trading at $56.39 at the time of publication, up .25% from the open with a +0.22% vector figure.
Tuesday’s prediction shows an open price of $56.08, a low of $55.92 and a high of $57.02.
The predicted close for Tuesday is $56.03. Vector figures jump to +.90% on Tuesday 1.05% and drive upward from there. This is a good signal for trading opportunities because we use vectors as a primary factor in determining price movements for stocks and ETF.
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 relative to the 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 the predicted direction of the Vector. The higher the value of the Vector the higher its momentum.
West Texas Intermediate for June delivery (CLM8) is priced at $68.32 per barrel at the time of publication, up .32% from the open. The commodity is looking to finish the month 5% higher which would be the seventh out of eight months the commodity has trader higher, riding a mixed wave of geopolitical news and production increases have carried these prices to trade higher and could look to continue that trend next month. Development in Iran, Saudi Arabia, and further sanctions will be crucial to the commodity’s advancement, a point of concern for those interested in the commodity.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $13.8379 at the time of publication, up .79% from the open. Tomorrow’s prediction sees support at $13.52 and resistance at $13.86. The predicted close for tomorrow is $13.62. Vector figures show -.17% today, which stay negative for the next two trading sessions before reversing to positive territory. 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.
The price for June gold (GCM8) is down 0.42% at $1,318.10 at the time of publication. Although we saw the commodity end higher on Friday, gold is still looking at a roughly 1% drop for the month of April. With the dollar continuing to advance, along with treasury yields which peeped over the 3% benchmark Friday before lowering today, gold looks to continue trading lower while support looks to hover around 1,3000.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows all negative signals. The gold proxy is trading at $124.97, down .42% at the time of publication. Tomorrow’s predicted low is $124.33 and the predicted high is $124.66. The predicted close for tomorrow is $124.48. Vector signals show -0.25% for today, moving toward -1.00% the next two trading session and going into negative territory for the rest of the 10-day prediction. 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.
Easing off the 3% benchmark 10-year yields marched towards last week, all three yields this week look to trade at similar levels before the big spikes we saw last week. Stronger price pressure could be ahead of the bonds as investors monitor for inflation news. The yield on the 2-year Treasury note rose to 2.50%, about .65% from the open, at the time of publication. The yield on the 10-year Treasury note is down 0.53% at 2.95% at the time of publication. The yield on the 30-year Treasury note is up .66% from the open at 3.11% 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 all negative signals in our 10-day prediction window. Today’s vector of -0.19% moves to -1.83% within three trading sessions. The ETF is priced at $119.395 at the time of publication, up 0.42%. The predicted close tomorrow is $117.60 with a low and high of $116.67 and $118.28, 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.
The CBOE Volatility Index (^VIX) is up 1.30% at 15.61 at the time of publication, and our 10-day prediction window shows all positive signals. The predicted close for today is 16.81 with a vector of +5.82%. The predicted lows and highs for tomorrow are 15.35 and 17.03, 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.
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