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On Monday, U.S. indexes saw their biggest drop in nearly a month following a higher-than-expected reading from the U.S. services sector. This surge in activity could possibly mean that the Federal Reserve will have to be more aggressive than anticipated when adjusting policy in an effort to fight inflation. Although stocks were mixed on Friday, they had an excellent week following November’s highly impressive jobs report- this, however, caused unease that inflation might be more challenging to vanquish than initially believed. The November jobs data released on Friday showed that average hourly wages had increased by more than 5% over the past year. This news, while good for workers, caused some market strategists to worry about inflation continuing to rise.
Several significant economic releases are scheduled for this week while next week will feature the latest Federal Open Market Committee meeting. This week we will see October Trade Deficit data, the producer price index, as well as several Q3 reports. Today’s key release, The ISM barometer of U.S. business conditions in the service sector came out stronger than predicted, going up to 56.5% in November, a good showing that affirms the U.S. economy is still growing steadily. Elsewhere, while the VIX spiked today, gold and oil lowered in price as attention toward growing U.S. long-term yields once again spiked.
This week’s earnings reports from $ORCL, $AVGO, and $MDB – as well as inflationary expectations data- could have a big impact on where the market goes next. We are watching the overhead resistance levels in the SPY, which are presently at $410 and then $416. The $SPY support is at $400 and then $390. We expect the market to continue the current rally for the next 2-4 weeks. The short-term market is trading in the well-defined range. We would be market neutral at this time and encourage subscribers not to chase the market to the downside or upside. Globally, Asian markets closed in the green while European markets finished with mixed results. Market commentary readers should maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
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, NOC. 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 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 picks, please click here.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $77.37 per barrel, down 3.26%, 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 $69.84 at the time of publication. 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 price for the Gold Continuous Contract (GC00) is down 1.56% at $1781.40 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 $167.26 at the time of publication. Vector signals show -0.17% 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 up at 3.585% at the time of publication.
The yield on the 30-year Treasury note is up at 3.586% 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. 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 CBOE Volatility Index (^VIX) is $20.75 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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