Will the markets continue to climb without a major roadblock?

August 16, 2017

By Vlad Karpel

Market activity is looking like business as usual again after a cooldown of geopolitical tensions, and investors are looking towards the release of the July 25-26 FOMC meeting minutes. Investors will be focusing on any details or hints at Fed thinking around inflation, as the rate of inflation will determine whether or not we will see a third potential rate hike this year. Overall, the risk-averse attitude has subsided, and we’re seeing a rotation out of gold and other defensive positions back into risk-assets. The U.S dollar is climbing back and treasuries yields are back up. Without another rise in geopolitical tensions or an unexpected Fed announcement, the market should continue to follow the path of least resistance.

The DJIA is currently up 0.15%, or 32 points, at 22,030. The S&P 500 is currently trading at 2,468- up 0.15% from the open. The Nasdaq-100 is up 0.20% at 6,346.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows consistent negative signals. Today’s negative vector figure of -0.35% moves to -0.86% within three trading sessions. Today’s predicted support and resistance is 2,445.04 (± 3.11) and 2,464.61 (± 3.14), respectively. The predicted close today is 2,454.89. 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.

Must-buy Stocks for Thursday

Based on our Stock Forecast Toolbox’s 10-day prediction data, we’ve found 2 great candidates of interest. They are:

CSX Corporation. (CSX)

Railroad operator CSX Corporation is showing strong bullish signs in our short-term prediction models.

Our 10-day prediction model shows incrementally building positive signals. The stock is currently trading at $50.85, down 0.55% from the open with a +0.82% vector figure for today. Tomorrow’s prediction shows an open price of $52.13, a low of $51.33 and a high of $51.81. The predicted close for tomorrow is $51.76. Vector figures show +2.00% for tomorrow. 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.

Avis Budget Group (CAR)

Avis, a major car-rental company, is making a foray into the ever-changing auto industry after landing a partnership with Alphabet (GOOGL, GOOG) to support Waymo, Alphabet’s self-driving car spinoff.

Our 10-day prediction model shows incrementally-building positive signals. The stock is currently trading at $33.76, which is down 3.54% from the open. Tomorrow’s prediction shows an open price of $36.07, a low of $35.80 and a high of $36.54. The predicted close for tomorrow is $36.49. Vector figures show +4.09% for tomorrow and progresses further up from there. 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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Oil

Crude prices are trading lower today, following an Energy Information Administration report which showed another decline in U.S supplies but an uptick in U.S. production. Although supply levels are showing a decline for the seventh week in a row, domestic crude production has reached a two-year high in weekly output levels. West Texas Intermediate for September delivery is currently priced at $47.21 per barrel, down 0.69% from the open.

Looking at USO, a crude oil tracker, our 10-day prediction model shows initial negative signals followed by a positive uptrend. The fund is currently trading at $9.61, which is down 1.44% from the open. Today’s prediction sees support at $9.45 (± 0.05) and resistance at $9.80 (± 0.05). The predicted close for today is $9.66. Vector figures show -0.34% for today, but reverse to +0.39% in four 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

The price for December gold is currently down 0.07% at $1,278.80 a troy ounce. The non-fiat metal is seeing the switch to a risk-on investor sentiment as equities improve, the U.S dollar strengthens and geopolitical tensions are dampened.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows overall negative signals. The gold proxy is currently trading at $121.46, up 0.39%. Today’s predicted low is $120.37 (± 0.27) and the predicted high is $121.31 (± 0.27). The predicted close today is $120.77. 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

Yields are slipping today before the release of the July 25-26 FOMC meeting minutes, which will be highly scrutinized by investors and analysts. Although yields are down today, the overall trend should see bond prices dipping and yields increasing due to current market conditions. The yield on the 10-year Treasury note is currently down 0.69% at 2.26%.

Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see overall positive signals in our 10-day prediction window. Today’s vector of +0.37% sees a negative dip for tomorrow’s trading session, but returns to +0.07% in the following trading day. The ETF is currently priced at $125.67- up 0.34% from the open. The predicted close today is $126.05 with a low and high of $124.69 (± 0.27) and $126.08 (± 0.28), 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 currently down 3.32% at 11.64, and our 10-day prediction window shows mixed negative signals. The predicted close today is 10.98 with a negative vector of -3.57%. Today’s predicted lows and highs are 10.60 (± 0.24) and 12.12 (± 0.28), 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.