U.S. Markets Recover after Turbulent Tuesday

After trading sharply lower yesterday, with the Dow down 400, U.S. assets look to recover today. Worries over the Italian election had both European and U.S. markets down as anti-establishment fears could spell hard times for the euro. This came on top of last week’s major news that the North Korean summit was not going forward which also did not fare well for assets, but recent efforts have been made to rework the meeting. With U.S. indices and stocks recovering, and no promise of volatility slowing down, I recommend selling into the rallies. Make sure to monitor Seasonal Charts for optimal entry and exit positions.

Today’s rising action could also be fueled by the consumer-confidence index released yesterday, which reached an 18-year high and indicated solid growth ahead. All three major indices look to make modest gains for the day which fares good for investors but signals that worry over Italian elections is not gone. U.S. yields, yesterday, traded sharply lower, dragging down big banks with them, at around 2.7% but edged higher today. Private sector jobs rose in May, GDP annual pace was adjusted from 2.2% to 2.3%, while the trade gap for good fell by 0.6%, all of which could have supported treasury yields, as well market, recovery.

In earnings news, Dick’s Sporting Goods shares are up 26% today after earnings reported a strong boost in revenue. This rung true of HP Inc. as well, who’s printer and computer sales, beat expectations. DSW and Michael Kors, however, did not do as well after some so-so earnings reports, with the latter signaling it remains open to making acquisitions.

Federal Reserve Beige Book was released today with the Fed reporting the U.S economy moderately grew from April to May. This provided optimism for investors but also insured a central bank interest rate hike will most likely happen in next month’s Fed official meeting. Overall, U.S. economy grew in all regions, a positive, while aluminum and steel prices rose, a possible reaction to Trump’s earlier tariff calls. Elsewhere in the report, labor pools seem to be shrinking with executives pointing to electricians, carpenters, truck drivers, and computer technicians as difficult fields to hire in right now. With these concerns, as well as rising material prices such as oil and metal, inflation worries do not ease but investors should look to next month’s Fed Offical meeting for more clarity and direction. 

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows mostly negative signals. Today’s vector figure of +0.03% moves to -0.16% tomorrow before dipping further into negative territory. Today’s predicted support and resistance levels are 2,689.15 (±8.57) and 2,707.39 (± 8.63), respectively. The predicted close for tomorrow is 2,689.78. 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.  

Highlight of a Recent Winning Trade

On May 24th, our ActiveTrader service produced a bullish recommendation for Host Hotels & Resorts, Inc. (HST). ActiveTrader, included in all paid Tradespoon membership plans, is designed for intraday trading.

Trade Breakdown

HST opened within Entry 1 price range of $21.41 (± 0.11), moved through its Target Price of $21.62 in it the last hour of trading, reaching $21.67. The Stop Loss was set at $21.20.

Thursday Morning Buy Alert!

Our featured stock for Thursday is  The TJX Company, Inc. (TJX). TJX is showing a confident uptrend 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.  Our 10-day prediction model shows positive vector figure reaching +1.66% in five trading sessions which then incrementally builds throughout the 10-day forecast. Our benchmark for vector figures is +1.00%.

*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 $89.503 at the time of publication, up 1.28% from the open with a +0.41% vector figure.

Thursday’s prediction shows an open price of $89.17, a low of $86.98 and a high of $89.60.

The predicted close for Thursday is $87.50. Vector figures stay positive and drive upward from there. This is a good signal for trading opportunities because we use vectors as a primary factor in determining price movements for stocks and ETF.

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 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.

Oil

West Texas Intermediate for July delivery (CLN8) is priced at $68.20 per barrel, up 2.14% from the open, at the time of publication. After five straight sessions of losses, oil prices rose today. Geopolitical turbulence voted the commodity to a three-year higher which in turn caused heavy selling pressure last week. With OPEC claiming their intent to continue curbing output through 2018, investors should monitor situations in Venezuela as well as Russian involvement for indication on whether OPEC will follow through.

Looking at USO, a crude oil tracker, our 10-day prediction model shows mixed negative signals. The fund is trading at $13.795 at the time of publication, up 2.11% from the open. Tomorrow’s prediction sees support at $13.25 and resistance at $13.75. The predicted close for tomorrow is $13.26. Vector figures show -0.32% today, which turns +0.39% in two 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.

Gold

U.S. dollar and euro struggles helped gold traded higher this week. Investors should continue to monitor global markets as geopolitical concerns remain. The price for August gold (GCQ8) is up 0.13% at $1,305.60 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 $123.36, up .14% at the time of publication. Tomorrow’s predicted low is $120.73 and the predicted high is $121.58. The predicted close for tomorrow is $121.49. Vector signals show -0.18% for today, reaching -1.52% in one trading session. 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.  

Treasuries

U.S. yields rose after promising job numbers and consumer-confidence index reports, as well as some distance from the Italy turmoil that flagged all assets and yields.  Investors should watch for further Italian election news in the days to come as its stake in the European Union and its effect on the euro could, in turn, affect the U.S. dollar. The yield on the 10-year Treasury note is up 2.69% at 2.85% at the time of publication. The yield on the 30-year Treasury note is up 1.83% from the open at 3.03%.

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 -0.10% moves to -0.69% in three trading sessions. The ETF is priced at $121.13 at the time of publication, down 0.91%. The predicted close tomorrow is $120.91 with a low and high of $119.97 and $121.42, respectively. 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.

Volatility

The CBOE Volatility Index (^VIX) is down 11.40% at 15.08 at the time of publication, and our 10-day prediction window shows mostly all negative signals. The predicted close for tomorrow is 15.61 with a vector of -4.75%. The predicted lows and highs for tomorrow are 14.11 and 17.54, respectively. 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.