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Markets retreated in early morning trading after the abrupt end to the U.S.-North Korea summit in Vietnam but have since recouped losses behind better than expected GDP data. Several Fed official speeches are planned for today, along with the continuation of earnings, that will keep investors busy today. Labor and housing data is also in focus along with several developing geopolitical concerns. For now, the SPY 200-day moving average rests at $274, providing a good indicator of market condition and likely trend. If SPY drops below this level, expect some selloff. We encourage our members to avoid chasing the rallies and buy the selloffs. Based off most technical indicators, the market is overbought. For reference, the SPY Seasonal Chart is shown below:
Major U.S. indices were sent lower after Trump left Vietnam earlier than expected. Efforts to denuclearize North Korea did not go well as both sides could not agree on a deal regarding lifting U.S. sanctions. The failed efforts in Vietnam now turn U.S. attention fully to China negotiations which are no longer hampered by the March 1st deadline. Both President Trump and top U.S. Trade Ambassador Lighthizer stated the coming increase in tariff will be halted to continue working on a deal. With several geopolitical issues still undetermined or of concern, including Brexit and the recent India-Pakistan conflict, global markets were strongly pressured. Asian markets closed noticeably lower while European markets were mixed. U.S. indices improved following positive GDP data which was finally released after a long delay due to the government shutdown.
U.S. GDP for the fourth quarter of 2018 came in at 2.6%, above the 1.9% projected, bringing 2018 GDP to 2.8%, the best yearly growth since 2015. Other key figures to note include merchandise-trade deficit, which has increased, while homeownership for the fourth quarter came in mostly flat and in line with expectations. Unemployment looks to have slightly risen in the first week of February, look for more employment data tomorrow. Thus far, February looks to have fared well, with all 11 S&P sector on track to finish with gains for the month.
Big-name earnings today include Horizon Pharma and JCPenny, both topping expectations and seeing share soar over 20%. L Brands and Square Inc are currently down over 6% after the major retailer and mobile payment company, respectively, reported earnings that did not meet expectations for the fourth quarter. Gap, Marriot, AMC, and Nordstrom report after market close today. Philadelphia, Dallas, and Cleveland Fed presidents are scheduled to speak today while Fed Chairman Jerome Powell is scheduled to speak tonight, following his two-day hearing on Capitol Hill.
Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows mixed signals. Today’s vector figure of -0.06% moves to +0.69% in five trading sessions. 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.
On February 25th, our ActiveTrader service produced a bearish recommendation for Helmerich & Payne Inc (HP). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
HP entered its forecasted Strategy B Entry 1 price range $55.02 (± 0.38) in its first hour of trading and passed through its Target price $54.47 in the first hour of trading the following day. The Stop Loss price was set at $55.57
*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 MonthlyTrader recommendations. If you are interested in receiving Vlad’s personal picks, please click here.
Our featured stock for Friday is Cisco Systems Inc. (CSCO). CSCO is showing a confident vector trend 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 predicted support and resistance, relative to our entire data universe.
The stock is trading at $51.88 at the time of publication, up 1.00% from the open with a +1.09% 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 the 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.
West Texas Intermediate for March delivery (CLH9) is priced at $57.09 per barrel, up 0.26% 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 $11.92 at the time of publication. Vector figures show +0.58% today, which turns +0.41% 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.
The price for April gold (GCJ9) is down 0.36% at $1,316.50 at the time of publication. Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $124.16 at the time of publication. Vector signals show -0.29% 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.
The yield on the 10-year Treasury note is up 1.24% at 2.72% at the time of publication. The yield on the 30-year Treasury note is up 0.99% at 3.10% 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 negative signals in our 10-day prediction window. Today’s vector of -0.20% 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.
The CBOE Volatility Index (^VIX) is down 0.20% at $14.67 at the time of publication, and our 10-day prediction window shows negative signals. The predicted close for tomorrow is $14.71 with a vector of -1.70%. 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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