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Major U.S. indices neared record highs today off promising U.S.-China trade-deal news while also positively receiving the latest Fed policy update. Yesterday, the Federal Open Market Committee decided to keep rates unchanged during the final FOMC meeting of 2019 while also signaling rates will remain at 1.5%-1.75% in 2020. A possible interest rate hike could be in store for 2021 but the current sentiment for the Fed going forward will be to keep things as is, based on good employment, consumer, and inflation data. The U.K. held its general election today which will likely play a crucial role in Brexit and impact European markets. Globally, Asian markets closed to mixed results while European markets were in the green. Tomorrow, November Retail will be released while next week we will see Q3 GDP revision, Core Inflation data, and November housing data. We will continue buying when the SPY is near $303 level as we do not believe SPY will retest its 200 days MA. SPY short-term overhead resistance is currently near $315-$317 level and we do not see technical data supporting this level being broken in the next two weeks. Additional volatility is expected, along with shallow pullbacks, and we encourage Market Commentary readers to maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
With the S&P, Dow, and Nasdaq all on track to close in the green today it appears the latest Fed decision is helping support markets, as all three indices have neared record highs since the latest Fed policy update. The Federal Open Market Committee chose to keep rates unchanged and signaled they are not looking to make further hikes or cuts in 2020, hoping they can introduce the next interest rate change in 2021. Fed Chair Jerome Powell met with the press following the two-day meeting and signaled a similar notion. The Fed’s decision was supported by a strong labor market as well as solid consumer and inflation data, the vote to keep rates at 1.5% to 1.75% was agreed on unanimously.
The latest development in the U.S.-China “phase one” trade deal has markets moving higher with President Trump tweeting:
The sentiment was also echoed by the Chinese Ministry of Commerce which has resulted in solid, global support of markets. Further developments could arise through the end of the year as both sides appear to be eager to sign a partial “phase one” trade deal.
Following the market close, several key earnings are due to release corporate earnings. Oracle, Adobe, Broadcom, and Costco will release earnings data following the market close today. Tomorrow look out for November retail data, while next week we will see housing, industrial, and GDP data.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term mixed outlook. Today’s vector figure of -0.09% moves to +0.30% in four trading sessions. Prediction data is uploaded after the market closes at 6 p.m. CST. Today’s data is based on market signals from the previous trading session.
What people are saying about Tradespoon:
Mauricio F. Member since August 2017
I really like your site and am learning from the videos. I made several good profitable trades following your site recommendations and advice.?
I used your site advice to buy 3 Netflix (NFLX) call options. I Paid $8.20 for two $270 call options 16 Feb… A half-hour later they were selling for $10.50! Your site predicted that NFLX would increase in price. I decide to buy one more of the same option and paid $10.30. Friday the Bid = $11.65 and Ask = $11.95…
I calculated that the gain is so far is about 17% against the money that I used to purchase the options.
On December 3rd, our ActiveTrader service produced a bullish recommendation for Pepsico Inc (PEP). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
PEP entered its forecasted Strategy B Entry 1 price range $135.88 (± 0.32) in its first hour of trading and passed through its Target price of $137.24 in the second hour of trading the following trading day in the final hour of trading. The Stop Loss price was set at $117.74.
*Please note: At the time of publication Vlad Karpel does not have a position in the featured symbol, GOOGL. Our featured symbol 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 symbol for Friday is Alphabet Inc (GOOGL). GOOGL is showing a neutral 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 current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $1343.19 at the time of publication, down 0.08% from the open with a +0.17% vector figure.
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.
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 the 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 Crude Oil delivery (CL.1) is priced at $59.27 per barrel, up 0.85% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows positive signals. The fund is trading at $12.3 at the time of publication. Vector figures show +0.28% today, which turns +2.07% in three 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.
The price for the Gold Continuous Contract (GC00) is down 0.04% at $1,474.40 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 $138.92, at the time of publication. Vector signals show +0.10% for today. 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.
The yield on the 10-year Treasury note is up 5.07% at 1.89% at the time of publication.
The yield on the 30-year Treasury note is up 3.95% at 2.31% 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 overall negative signals in our 10-day prediction window. Today’s vector of -0.29% moves to -1.31% in three 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.
The CBOE Volatility Index (^VIX) is down 6.80% at $13.97 at the time of publication, and our 10-day prediction window shows mixed signals. 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.
What people are saying about Tradespoon:
Mauricio F. Member since August 2017
I really like your site and am learning from the videos. I made several good profitable trades following your site recommendations and advice.?
I used your site advice to buy 3 Netflix (NFLX) call options. I Paid $8.20 for two $270 call options 16 Feb… A half-hour later they were selling for $10.50! Your site predicted that NFLX would increase in price. I decide to buy one more of the same option and paid $10.30. Friday the Bid = $11.65 and Ask = $11.95…
I calculated that the gain is so far is about 17% against the money that I used to purchase the options.
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