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U.S. assets are trading higher today following last Friday’s 5.7% tumble in the Dow Industrial average, a 2018 low. Thursday saw President Trump announce $50 billion tariffs on Chinese imports. Beijing has already planned their retaliation of tariffs on $3 billion of U.S. goods. This furthers the speculation of global trade war though negotiations and reconciliation are certainly a possibility. Reports of private talks between U.S. and Chinese officials have eased some tension but many will watch for further action between these two. Fallout from Facebook data-privacy scandal saw the social media giant drop almost 15% last week, a big factor in the S&P and Nasdaq decline.
For the rest of Monday, the Dow and Nasdaq are looking at a solid spike for the day. This is still not enough to erase last week’s huge drop offs that saw index-record lows dating back to early 2016. New York Federal Reserve President William Dudley, who will be replaced later this year by San Francisco Fed President John Williams, will speak on regulatory reform in D.C. this afternoon while Fed Vice Chair Randal Quarles is scheduled to speak tonight at a consumer protection and small business forum in Atlanta.
Facebook is down 3% for the day continuing its drop from last week’s scandal. Elsewhere, Tech saw strong gains in Microsoft, up 5%, Netflix, up 3%, and Amazon and Apple, both up roughly 2%. Warren Buffett revealed to investors the proposed selling of 30.8% stake in the building materials group USG to privately held German rival, causing it to jump almost 19%. Other major moves include Finish Line Inc. buyout from JD Sports Fashion PLC JD., valued at $558 million, that saw sports retail chain surge 30%.
At the time of publication, the DJIA is up 1.51%, or 357.37 points, at 23,818.74. The S&P 500 is at 2,611.33 – up 1.18% from the open. The Nasdaq-100 is up 1.35% at 7,049.49.
Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows some early negative signals followed by all positive signals. Today’s vector figure of -0.89% moves into positive territory in two trading sessions at 0.49% and then above 1.00% the following trading session, to 2.06%. Today’s predicted support and resistance levels are 2,570.08 (±11.42) and 2,647.92 (± 11.77), respectively. The predicted close today is 2,573.59. 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.
Highlight of a Recent Winning Trade
On March 22, our ActiveTrader service produced a bearish recommendation for Hanesbrands Inc. (HBI). ActiveTrader, included in all paid Tradespoon membership plans, is designed for intraday trading.
Trade Breakdown
HBI opened within the Entry 1 price range of $18.99 (± 0.19) at $18.89, moving through its Target Price of $18.80 within the first hour of trading. The Stop Loss was set at $19.18.
Our featured stock for Tuesday is the L3 Technologies, Inc. (LLL). LLL is showing a strong positive 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. Our 10-day prediction model shows positive vector figure of above +1.00% for today that remains above 1.00% throughout the 10-day forecast. 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 $206.01 at the time of publication, up 2.14% from the open with a +1.11% vector figure.
Tuesday’s prediction shows an open price of $205.5, a low of $205.13 and a high of $211.54.
The predicted close for Tuesday is $206.08. Vector figure remains positive at +2.28% on Tuesday, holding above +1.00% throughout the forecast. 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 relatively to 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 predicted direction of the Vector. The higher the value of the Vector the higher its momentum.
Oil
Possibility of a global trade war seems to have caught up with oil prices as they fell on Monday following an almost two-month high hit last week. The continued White House shake ups have oil investors focused on newly appointed U.S. National Security adviser John Bolton and his impact on relations with Iran and their oil exports. OPEC, the Organization of the Petroleum Exporting Countries, reaffirmed their intention to continue supply cuts, stating they intend to continue them into and through 2019. West Texas Intermediate for May delivery (CLK8) is priced at $65.67 per barrel at the time of publication, down .47% from the open.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mostly negative signals. The fund is trading at $13.18 at the time of publication, down .75% from the open. Today’s prediction sees support at $13.02 (± 0.06) and resistance at $13.42 (± 0.07). The predicted close for today is $13.41. Vector figures show +.72% today, which move to -0.18% the following trading session, and then -1.08% the following session and remaining negative throughout. 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 April gold (GCJ8) is up 0.33% at $1,355.10 at the time of publication. With the U.S. dollar declining today, gold futures traded higher on Monday, holding ground at a month-long high. After a weekly loss of .9% for the dollar last week, the dollar fell another .4% today which should signal a strong week for gold as the commodity usually moves in the opposite direction of the dollar. Last week saw the commodity climb 3% but such high expectation for this week should be tempered as private talks between U.S. and Chinese officials have begun in order to subvert a possible trade war.
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 $128.52, up 0.71% at the time of publication. Today’s predicted low is $127.11 (± 0.32) and the predicted high is $128.03 (± 0.33). The predicted close today is $127.74. Vector signals show -.08% for today and alternates between positive and negative throughout. 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
Bonds climbed today after dropping for most of last week. Some analysts believe tension between U.S. and China is taking a toll on bonds which could be supported by this week’s slight positive turn, as news of behind the scenes talks between U.S. and Chinese officials make rounds. Overall, yields have risen in 2018 but investors will continue monitoring U.S. and Chinese communication and tension. The yield on the 10-year Treasury note is up .75% at 2.83% at the time of publication. The yield on the 30-year Treasury note is up .2% at 3.07% 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 mostly positive signals in our 10-day prediction window. Today’s vector of +0.09% moves to -0.20% in two trading sessions. The ETF is priced at $120.07 at the time of publication, down 0.08%. The predicted close today is $120.14 with a low and high of $119.34 (± 0.21) and $120.59 (± 0.22), 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.
Volatility
The CBOE Volatility Index (^VIX) is down 10.66% at 22.22 at the time of publication, and our 10-day prediction window shows all negative signals. The predicted close for today is 21.51 with a vector of -5.08%. The predicted lows and highs are 18.87 (± 1.19) and 23.57 (± 1.49), 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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