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Stocks and futures are seeing continued pressure as Coronavirus spread and concern grows. Overnight, futures hit the limit-down halt while stocks hit the 15-minute halt midday following a 7% drop by the S&P. Following the Fed’s decision to slash rates this weekend and re-open their crisis credit-facility, the White House signaled its intent to support an economic stimulus package. Several organizations have put forth plans to combat the virus in the past few days, either medically or economically, causing some easing on markets. The latest news from D.C. saw Senate pass a virus relief bill that will focus on advancing economic support and medical testing for the virus. Although stocks staged a small rally yesterday, markets are still down over 30% from their record highs and all three major U.S. indices closed with significant losses today. With current conditions in mind, we believe the bottom has not been set. Markets will have to close with higher highs and higher lows twice before the bottoming process will start. In the next few weeks, we expect the market to trade in the range of $200-$270 for the SPY ETF. Market Commentary readers are encouraged to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
U.S. markets dipped significantly today following a slight rally on Tuesday. All three major U.S. indices closed in the red while another circuit breaker was hit today with a 7% dip on the S&P triggering a 15-minute halt. Markets are down over 30% from their record highs and are still seeing significant pressure. Coronavirus spread in the U.S. has caused a noticeable economic impact. Over the weekend, the Fed Reserve canceled their FOMC meeting and slashed rates down to 0%. Following the rate cut, Fed announced they will open their crisis-era credit facility. provide short-term loans. Over in Washington, Senate approved the House’s virus relief bill aiming to advance testing and economic relief in the coming weeks. Similarly, Treasury Secretary Mnuchin stated the government was looking at adding $1.3 trillion in emergency funding. Globally, both Asian and European markets closed significantly lower. Oil continues to struggle as prices plunged over 10% two days in a row, trading near $22 per barrel.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term mixed outlook. 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 February 25th, our ActiveTrader service produced a bullish recommendation for General Motors Company (GM). ActiveTrader is included in several Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
GM entered its forecasted Strategy B Entry 2 price range $33.26(± 0.22) in its first hour of trading that day and passed through its Target price of $32.76 in the following hour of trading. The Stop Loss price was set at $34.42.
Our featured symbol for Thursday is Ipath S&P 500 VIX Short-Term Futures (VXX). VXX is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (C) indicating it ranks in the top 50th percentile for accuracy for current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $69 at the time of publication, with a +6.77% 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.
*Please note: At the time of publication Vlad Karpel does have a position in the featured symbol, VXX. 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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $22.39 per barrel, down 16.92% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows negative signals. The fund is trading at $6.14 at the time of publication. Vector figures show -4.20% today, which turns to -18.38% 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.
Gold
The price for the Gold Continuous Contract (GC00) is down 2.50% at $1487.00 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 $140.39, at the time of publication. Vector signals show -0.41% 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 down to 1.138% at the time of publication.
The yield on the 30-year Treasury note is down to 1.764% 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. 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.
Volatility
The CBOE Volatility Index (^VIX) is $78.16 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.
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