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Markets are trading higher today off strong third-quarter earnings as well as a potential Brexit deal between the U.K. and the European Union. This comes after stocks edged lower the previous trading session due to U.S.-China tension and weak retail data. Last week, negotiations between the U.S. and China were productive while this week, comments from China have reversed sentiment on negotiations and progress. Yesterday, Netflix reported upbeat third-quarter earnings while today strong reports from Honeywell, Philip Morris, and Morgan Stanley were released before the market open. Next week, look for Amazon, Intel, Comcast, Microsoft, McDonald’s, Haliburton, and Visa to report third-quarter earnings. We do not see evidence the market will retest its 200 days MA and believe it is just a matter of time for the market to break through 52 weeks high. With this in mind, we will look to buy at $294-$296 level for SPY. As we approach a strong seasonal trend for the market to make new highs, we will follow the semiconductor sector. Although the market is range-bound, further volatility can occur and we recommend readers maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Overseas, U.K. and E.U. officials reached a key agreement ahead of the Brexit deadline and a potential deal could soon be announced. The pound and euro record nice gains off the news from the European Commission President Jean-Claude Juncker. Still, further complications could impact the deal as several U.K. and Irish officials have already voiced their concerns. Look for more on this as well as the U.S.-China trade deal to impact global markets. With last week’s deal, sentiment around U.S.-China negotiations were turning positive only to be reversed following disparaging comments from China. Chinese officials are citing “strong countermeasures” from Congress in support of Hong Kong protestors as the main point of conflict while today, U.S. trade representative Larry Kudlow spoke highly of the deal, stating they are “the farthest” they have ever been on a trade deal.
Yesterday, Netflix earnings were released after the market closed to power shares to nice gains today. An increase of subscribers following last quarter’s decline was received positively as well as further guidance on the streaming giant. Also reporting positively were Morgan Stanley, Philip Morris, and Honeywell, which reported before the market opened today, and saw gains between 1%-3%.U.S. new home construction fell last month, along with industrial production, while unemployment remained flat. Next week look for an uptick in key earnings including Amazon, Visa, Intel, Comcast, 3M, Microsoft, Boeing, PayPal, Procter & Gamble, McDonald’s, and Twitter.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows mostly positive signals. Today’s vector figure of -0.15% moves to +2.80% in five 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.
On October 10th, our ActiveTrader service produced a bullish recommendation for Wal-Mart Stores (WMT). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
WMT entered its forecasted Strategy B Entry 1 price range $118.93 (± 0.36) in its first hour of trading and passed through its Target price of $120.12 in the second hour of trading the following trading day. The Stop Loss price was set at $117.74.
*Please note: At the time of publication we do not own the featured symbol, TJX. 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 TJX Companies (TJX). TJX 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 $60.37 at the time of publication, up 1.82% from the open with a +1.28% 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 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 $54.05 per barrel, up 1.29% 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 $11.3 at the time of publication, up 1.44% from the open. Vector figures show +1.10% today, which turns +2.76% 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 up 0.07% at $1,495.10 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 $140.63, up 0.16% at the time of publication. Vector signals show-0.09% 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 0.65% at 1.76% at the time of publication. The yield on the 30-year Treasury note is up 0.63% at 2.24% 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 mixed signals in our 10-day prediction window. Today’s vector of -0.40% moves to -0.76% 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 up 0.37% at $13.73 at the time of publication, and our 10-day prediction window shows positive signals. The predicted close for tomorrow is $13.98 with a vector of +5.71%. 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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