Muted Market Movement Signals VIX Bottoming

Today, U.S. indices continued to waver from slight gains to slight losses as volatility began to settle. WIth $VIX under $19, a bottoming process is likely on the way. One can expect another retest of recent lows in the next two weeks with the lack of volume and technical indicators. Investors should consider hedging and note the next overhead resistance on SPY is $280 or the current 50-day moving average, which is near $286. Third quarter earnings season is in full swing and as more and more reports continue to release and influence markets, investors should monitor Tradespoon Screeners and Research tools for key trend indicators such as readjusted support and resistance levels and 20, 30, 40, and 50-day forecast outlooks. SPY Seasonal Chart forecast is shown below:

Stocks rallied yesterday behind strong earnings only to flutter between modest gains and losses today in all three major U.S. indices. Tech sector had a sizeable rally, with Netflix earnings exceeding expectations pushing shares up as high as +6.5%, which helped the bounce back yesterday. Goldman Sachs, Morgan Stanley, and United Health Care were also big gainers behind strong reporting. American Express, PayPal, Honeywell, and more are scheduled to tomorrow and Friday, continuing third-quarter earnings season.

Minute’s from last month’s Federal Reserve Meeting, which raised interest rates a quarter point, will be released today. Elsewhere, the European Union and Britain continue their Brexit trade negotiations. This, along with the stalled negotiations between the U.S. and China, are important situations to monitor for global influence on both domestic and global markets. Asian Markets have risen for the last two days while European markets are down today.

Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows mixed signals. Today’s vector figure of +0.54% moves to -3.75% in five trading sessions. The predicted close for tomorrow is 2,926.72. 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 Performance

Even with increased volatility, Tradespoon technology has been able to provide strong results and accuracy in our post-selloff trading. Similar selloff, to the one we’re seeing this week, imid-Augustst resulted in 77% winning trades, or 7 out of 9!

Volatility Trade Breakdown

On August 13th, in the midst of the mid-August selloff, we recommended a short on Devon Energy Corp at $42.45 and shorted the stock at $42.24 (32.31% Net Gain!), and that’s just one of many winning trades we had during volatility!

Highlight of a Recent Winning Trade

On October 8th, our ActiveTrader service produced a bullish recommendation for Philip Morris Intl Inc (PM). ActiveTrader included in all Tradespoon membership plans and is designed for intraday trading.

Trade Breakdown

PM entered the forecasted Entry 1 price range of $83.91 (± 0.33) in its first hour of trading and moved through its Target price of $84.75 in its third hour of trading. The Stop Loss was set at $83.07.

Thursday Morning Featured Stock

Our featured stock for Thursday is Ball Corporation (BLL). BLL is showing a confident vector trend 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.  

*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 $45.93 at the time of publication, down 0.37% from the open with a +0.71% vector figure.

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 the 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.

Oil

West Texas Intermediate for November delivery (CLX8) is priced at $69.58 per barrel, down 3.31% from the open, at the time of publication. Looking at USO, a crude oil tracker, our 10-day prediction model shows mostly negative signals. The fund is trading at $14.75 at the time of publication, down 2.90% from the open. Vector figures show +0.14% today, which turns -2.37% in five 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 (GCZ8) is down 0.30% at $1,226.30 at the time of publication. Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows all positive signals. The gold proxy is trading at $115.75, down 0.04% at the time of publication. Vector signals show +0.28% for today. 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

The yield on the 10-year Treasury note is up 0.09% at 3.17% at the time of publication. The yield on the 30-year Treasury note is up 0.17% at 3.34% 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. Today’s vector of +0.41% moves to +0.17% in three 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.

Volatility

The CBOE Volatility Index (^VIX) is up 3.86% at $18.3 at the time of publication, and our 10-day prediction window shows positive signals. The predicted close for tomorrow is $18.79 with a vector of +7.00%. 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.