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With earnings season in full swing, the geopolitical turbulence that attempted to thwart markets in early April can be put behind us. As focus usually goes this time of year, earnings have taken center stage with big banks, tech giants, and other sectors already releasing positive reports while stalled action in both Syria and North Korea proves promising. With last week’s major banks’ earnings on top of Netflix, Goldman Sachs, and Morgan Stanley all reporting inspiring results, major indices look to be responding well despite the IBM worries of this week and Facebook troubles of last.
At the time of publication, the DJIA is up 0.08%, or 20.5 points, at 24,765.16. The S&P 500 is at 2, 710.99- up 0.27% from the open. The Nasdaq-100 is up 0.26% at 7,285.29.
While Netflix outperforming expectation proved positive in the hours after their earnings released, another giant saw a different reaction. Although IBM beat expectations for their first-quarter earnings, their report was met with a lot of uncertainty. IBM CFO James Kavanaugh told shareholders to no longer count on the new mainframe sales that have boosted earnings the last two quarters. That, along with with the $800 million tax gain IBM received in the quarter, which most view as the only reason IBM earnings came above expectations therefore diluting their report, has stalled excitement for the company. IBM shares dropped nearly 6% after reports and are down 7.3% for the day at 149.73.
Other earnings on the docket this week include American Express, E-Trade Financial, Phillip Morris, GE, while we will hear from both New York Fed President William Dudley and Fed vice chairman Randal Quarles. The other big release this week will be out today with the Fed’s Beige Book, which reports on the economic conditions of the central bank’s twelve districts, after 2 PM eastern.
Looking at the seasonal chart along with the 10-day chart below, investors should look at support and resistance levels as good benchmarks to start trades. Preferably looking to open position near the resistance, as I always encourage the path of least resistance.
Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows all positive signals. Today’s vector figure of 0.54% moves to +1.62% in one trading session. Today’s predicted support and resistance levels are 2,707.12 (±8.75) and 2,756.14 (± 8.90), respectively. The predicted close today is 2,730.87. 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 April 16, our ActiveTrader service produced a bullish recommendation for Coca Cola Company (KO). ActiveTrader is included in all paid Tradespoon membership plans and is designed for intraday trading.
Trade Breakdown
KO opened within Entry 1 price range of $44.10 (± 0.30) within its first hour of trading and moved through its Target price of $44.54 within the second hour of trading, reaching a high of $44.82. The Stop Loss was set at $43.86.
Our featured stock for Thursday is Apple Inc. (AAPL). AAPL is showing a predicted near-term uptrend 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. Our 10-day prediction model shows vector figure of +1.24% in one trading session that remains positive throughout the 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 $177.85 at the time of publication, down 0.22% from the open with a +0.841% vector figure.
Thursday’s prediction shows an open price of 178.89, a low of $178.84 and a high of $180.65.
The predicted close for Thursday is $180.62. Vector figures rise to +1.24% on Thursday. 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
After a surprise decline in weekly U.S. crude supplies, Oil prices reached a three year high. West Texas Intermediate for May delivery (CLK8) is priced at $67.77 per barrel at the time of publication, up 1.85% from the open. This continues a strong almost-two week run for the commodity. The EIA reported a 1.1 million barrel decline for the week of April 13 which strongly supported the commodity trading higher today. The joint OPEC and non-OPEC meeting later this week will be something to watch and monitor for commodity traders.
Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $13.665 at the time of publication, up 1.90% from the open. Today’s prediction sees support at $13.12 (± 0.07) and resistance at $13.43 (± 0.07). The predicted close for today is $13.41. Vector figures show +0.02% today, which move to +1.05% 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 June gold (GCM8) is up 0.31% at $1,353.60 at the time of publication. While the safe haven commodity was on pace for its best finish of the week this morning, the dollar stabilizing in the afternoon has caused the safe haven advances to stifle. Still up for the day, commodity traders will look for the Beige Book to provide more clarity on U.S. finance and therefore the assets which can often drive direction for the commodity.
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 $128.165, up 0.32% at the time of publication. Today’s predicted low is $126.58 (± 0.35) and the predicted high is $128.32 (± 0.36). The predicted close today is $127.40. Vector signals show +0.10% for today, but turn negative for the week ahead. 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
Treasury yields advanced today, continuing a strong run that’s been rising for almost one full week. While no new information or reports are set to release this week, beyond earnings and the Beige Book, investors will look to the April 26 European Central Bank meeting as well as the one after that in the states where the next possible tax hike could be discussed. The yield on the 2-year Treasury is up today at 2.44% while the yield on the 10-year Treasury note is up 0.68% at 2.85% at the time of publication. The yield on the 30-year Treasury note is up 0.07% at 3.02% 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 negative signals in our 10-day prediction window. Today’s vector of +0.12% moves to -1.17% in four trading sessions. The ETF is priced at $121.04 at the time of publication, down 0.19%. The predicted close today is $120.61 with a low and high of $120.56 (± 0.26) and $121.59 (± 0.26), 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 up 3.67% at 15.81 at the time of publication, and our 10-day prediction window shows all negative signals. The predicted close is 13.56 with a vector of -5.62%. The predicted lows and highs are 13.21 (± 0.47) and 16.73 (± .60), 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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