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Markets are trading higher today following yesterday’s FOMC decision and the latest economic reports. Yesterday, Feds cut interest rates for the second time in 2019 by a quarter-point but did not guarantee further cuts. Existing home sales data for August released today showed positive growth while next week Q2 GDP revision and August core inflation reports are due. The SPY continues to trade between $294-$302 and we do not see the potential for the market to overshoot an all-time high of $302, following the Fed decision. SPY short term support is near 50-days MA on SPY, $295, indicating the market has broken out of August range. We believe the market is range-bound until we see additional key asset classes breakout out of their existing trends. We will look to buy when SPY is near $282 and sell near $300. With further volatility expected, we encourage maintaining clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Yesterday, Fed’s cut interest rates by a quarter-point and sent markets lower. Fed Chair Jerome Powell met with the press following the conclusion of the two-day meeting and gave further details about their decision. In a 7-3 vote, the Fed chose to cut rates citing uncertainty regarding global growth and trade tension. Several members were interested in higher percentage cuts while some considered no cut all. The discrepancy in sentiment within the Fed projects ambiguity regarding additional cuts this year. Markets have changed course, however, since the rate cut with all three major U.S. indices on track to close in the green. The European Central Bank also chose to cut rates last week and is also seeing markets close in the green today. Asian markets closed to mixed results with the U.S.-China negotiations, set for early October, leading headlines. Several trade representatives from both sides will meet today and Friday, ahead of the October talks.
Following the Fed, the next major known market influencer will be the U.S.-China negotiations. Until then, economic reports will likely dictate the market. Data for existing home sales in August, released today, showed an increase of over 1% and supported markets. Next week, look out for Q2 GDP revision, August personal income, consumer spending, core inflation, and September consumer sentiment index. Earnings remain light next week
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows positive signals. Today’s vector figure of +0.05% moves to +0.21% 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 September 6th, our ActiveTrader service produced a bullish recommendation for TJX Companies (TJX). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
TJX entered its forecasted Strategy B Entry 1 price range $55.77 (± 0.38) in its first hour of trading and passed through its Target price $56.33 in the first hour of trading that day. The Stop Loss price was set at $55.21.
*Please note: At the time of publication we do own the featured symbol, COP. 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 ConocoPhillips (COP). COP 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 $60.13 at the time of publication, up 0.20% from the open with a +1.44% 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 Crude Oil delivery (CL.1) is priced at $58.05 per barrel, down 0.15% 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 $12.13 at the time of publication, up 0.25% from the open. Vector figures show +0.62% today, which turns +1.93% 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 the Gold Continuous Contract (GC00) is down 0.53% at $1,507.80 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mostly negative signals. The gold proxy is trading at $141.41, up 0.50% at the time of publication. Vector signals show -0.56% 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 down 1.07% at 1.78% at the time of publication. The yield on the 30-year Treasury note is down 0.94% at 2.22% 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 -0.61% moves to -1.71% 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 0.43% at $13.89 at the time of publication, and our 10-day prediction window shows positive signals. The predicted close for tomorrow is $14.20 with a vector of +6.08%. 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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