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After closing the week lower in all three major U.S. indices, U.S. stocks are once again down today. Investors should expect short-term volatility to continue and should not chase the market. Continue buying into the dips as we approach December, which is usually a very bullish time of year. Geopolitical concerns continue to weigh on markets regardless of the optimistic breakthroughs we had last week, these include the likely Chinese tariff concessions announced by Chinese officials and the Brexit deal that was drafted and should help the U.K. progress their exit from the European Union. Other major news includes Nissan Chairman Carlos Ghosn under investigation for potentially underreporting his income and other “significant acts of financial misconduct,” Apple’s recent troubles, and fresh housing data. Current SPY 50-Day Moving Average sits at $280. For reference, SPY Seasonal Chart is shown below:
Conflicting news regarding Chinese trade and tariff progress continued to pour out of the White House as early optimism from the announced Chinese concession was tampered by conflicting reports from Larry Kudlow and Treasury Secretary Steven Mnuchin. Kudlow reported talks progressing on all levels while Mnuchin did not divulge much but did not indicate similar progress. Vice President Mike Pence urged nations to forgo any loans that would leave them indebted to China and that the U.S. would “not change course until China changes its ways.” This, along with the oncoming January tariff increase set to raise U.S. tariffs on Chinese goods from 10% to 25%, has added pressure to the already tense and always-fluctuating trade relations between the two nations. Later this month, Trump and Xi are scheduled to meet at the G20 Summit in Buenos Aires. Other global concerns to monitor include further drawback from the recently drafted Brexit plan in England and the Italian budget crisis, which has Italy and the EU in the stalemate over Italy’s budget plans. Both will likely be addressed in EU council in Brussels this week as well as in next week’s Brexit Summit.
Major headlines to monitor today include Nissan, Apple, and housing reports. Nissan Chairman Carlos Ghosn was arrested in Tokyo earlier today for several claims of financial misconduct which will likely lead to his dismissal from the company. Since the news broke, the automaker lost 5% and continues to trend in the wrong direction. Also trending in the wrong direction today is Apple, whose shares are down over 3%. This is most likely due to the recent quarterly report which presented production problems pressuring suppliers and underwhelming sales. Financial outlooks for Apple suppliers were also significantly down. Finally, the National Association of Home Builders’ released their monthly report which showed a confidence drop of eight points, the largest decline in over four years. Tomorrow, investors will see Housing Starts and Building Permit numbers for October, while Wednesday will see Existing Home sales. Also on Wednesday, Consumer sentiment report for the month of November will release, another key indicator of economic stability. U.S. Markets will be closed Thursday for Thanksgiving Day observance.
Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows mixed signals. Today’s vector figure of +0.65% moves to -0.74% in seven trading sessions. The predicted close for tomorrow is 2,779.60. 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.
On November 16th, our ActiveTrader service produced a bullish recommendation for Intercontinental Exchange Inc. (ICE). ActiveTrader is included in all Tradespoon membership plans and is designed for intraday trading.
Trade Breakdown
ICE entered the forecasted Entry 1 price range of $80.19 (± 0.31) in its second hour of trading and hit its Target price of $80.99 in the second to last hour of trading that day, reaching a high of $81.20 for the trading day. The Stop Loss was set at $79.39.
Our featured stock for Tuesday is PepsiCo Inc. (PEP). PEP is showing a confident vector 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.
*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 $119.09 at the time of publication, up 0.63% from the open with a +0.03% 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 next trading session relative to the average of actual prices for the last trading session. The column shows 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 December delivery (CLZ8) is priced at $57.17 per barrel, up 1.26% from the open, at the time of publication. Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed signals. The fund is trading at $12.14 at the time of publication, up 0.58% from the open. Vector figures show -1.04% today, which turns -8.39% 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 December gold (GCZ8) is up 0.12% at $1,224.50 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 $115.75, up 0.11% at the time of publication. Vector signals show -0.68% 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 down 1.97% at 3.05% at the time of publication. The yield on the 30-year Treasury note is down 1.33% at 3.32% 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 -0.01% moves to -0.04 % 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 11.80% at $20.28 at the time of publication, and our 10-day prediction window shows mixed signals. The predicted close for tomorrow is $18.70 with a vector of -3.39%. 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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