Tuesday’s market sell-offs highlight investor wariness of Trump administration’s capacity to deliver on pro-business agenda, while some analysts point to technical factors

On Tuesday, The Dow Jones Industrial Average and the Nasdaq-100 saw their biggest percentage drops since September of 2016. Many are attributing this to growing investor wariness over President Donald Trump’s ability to effectively produce substantial tax reforms and a massive infrastructure spending plan. Recent struggles within the Republican party to coherently move forward with a health-care bill is being looked at by some as a preview for future policy projects.

Other analysts, however, are not convinced this to be the cause of the stock pull-back. Some are pointing to a more technical explanation of the recent downturn, specifically citing an event on Friday known as “quadruple witching”, which occurs every quarter. This is when individual stocks, stock indexes, stock-index futures and single-stock futures expire simultaneously and can put broader downward pressure on markets.

The DJIA is currently down 0.04% at 20,659. The Nasdaq-100 is up 0.35% at 5,814 and the S&P 500 is currently trading at 2,348 which is up 0.17% from the open. Wednesday’s tempered rebound was mostly driven by technology sectors.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows slight, consistent positive signals. Today’s negative vector figure of -0.25% reverses and climbs to +0.55% in the next two trading sessions. Today’s support and resistance is 2,344.02 (± 3.41) and 2,380.37 (± 3.47), respectively. The predicted close today is 2,355.39.   

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The Wall Street Journal was invited to observe a private meeting Wednesday held by President Trump in which he called for fast-tracking a $1 trillion infrastructure spending bill. The popular right-leaning publication recently published an article which called into question the credibility of the new President.

Oil

Crude oil prices are continuing to dip as the familiar narrative of mounting domestic U.S production activity persists.  Domestic crude supplies grew by 5 million barrels for the week ending march 17, as reported by the U.S Energy Information Administration. This would mark the 10th increase in 11 weeks and also breaks a new supply record at 533.1 million barrels in total. The ramping up of production and supplies continues to work against OPEC’s efforts to rebalance global crude oil markets.  West Texas Intermediate for May delivery is currently priced at $47.53 per barrel, down 1.43% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows signs of volatility. Vector figures show -0.10% for today, followed by oscillations between downward and upward momentum. All vector figures are based on today’s market conditions. The fund is currently trading at $10.079, which is down 0.31% from the open. Today’s prediction sees support at $10.11 (± 0.06) and resistance at $10.36 (± 0.06). The predicted close for today is $10.19.  

Gold

The price for April gold is up 0.26% at $1,249.80 a troy ounce, heading toward a fifth consecutive session of making gains. Tuesday’s equity drops drummed up demand for the non-fiat metal, which is a perceived safe-haven asset in times of uncertainty.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows strong negative signals for gold prices. Relative to today’s conditions, negative vectors progress from -0.31% today and pass -1% within four trading sessions.  The gold proxy is currently trading at $118.93, up 0.33%. Today’s predicted low is $116.74 (± 0.30) and the predicted high is $118.58 (± 0.30). The predicted close today is $117.54.  

Treasuries

Yields on the 10-year Treasury note dropped 3 basis points and is currently at 2.39%, down 0.024% from the open. Sales of previously-owned homes fell significantly for February.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see consistent positive signals in our 10-day prediction window. Relative to today’s conditions, we see vector figures climbing from +0.61% today to pass +0.51% in four trading sessions.  The ETF is currently priced at $120.64- up 0.42% from the open. The predicted close today is $120.14 with a low and high of $119.74 (± 0.29) and $121.08 (± 0.29), respectively.  

Volatility

The CBOE Volatility Index (VIX) is currently up 3.21% at 12.87. Relative to today’s conditions, the 10-day prediction window shows strong signals for negative movement. The predicted close today is 12.13 with a positive vector of +0.84%. Today’s predicted lows and highs are 10.72 (± 0.12) and 12.47 (± 0.14), respectively.