FOMC Keeps Rates Unchanged, Large-Cap Tech Earnings Due Thursday

by Vlad Karpel

After markets finished mostly lower on Tuesday, U.S. stocks closed higher on Wednesday following the conclusion of the latest Federal Open Market Committee meeting. Federal Reserve Chair Jerome Powell affirmed the Fed’s decision to leave benchmark interest rates unchanged as well as continued support throughout the pandemic. Powell stressed “fiscal policy” and stated the Fed is not looking to close or downsize their current emergency lending facilities; similarly, Powell advised Congress to fast-track additional coronavirus aid. Big-name tech earnings are due this week, including Amazon, Apple, and Google, while over on Capitol Hill, heavyweight tech CEOs met before the House Antitrust Committee today. Currently, we still believe the market is overbought. Our “worst-case” short-term scenario remains $296 as our models are projecting the SPY to trade between $296-$330. For reference, the SPY Seasonal Chart is shown below:

At this moment, we still believe the market is overbought. Our “worst-case” short-term scenario remains $296 as our models are projecting the SPY to trade between $296-$330. As long as the market trades above the $323 level for the SPY, Market Commentary readers can consider adding to their positions using market pullbacks. Short-term traders could consider adding to positions when SPY nears $293 and we will look to be buyers into any short-term corrections. We will continue monitoring the VIX as the market can overshoot support and resistance levels when VIX is trading near $30 level, and we encourage all market commentary readers to maintain clearly defined stop-levels for all positions.

Key U.S. Economic Reports/Events This Week

  • Pending Home Sales (June) – Wednesday
  • FOMC Announcement – Wednesday
  • Weekly Jobless Claims (7/25) – Thursday
  • GDP (Q2) – Thursday
  • Personal Income (June) – Friday
  • Consumer Spending (June) – Friday
  • Core Inflation (June) – Friday

Upcoming Earnings

  • BA – Boeing – Wednesday
  • GE – General Electric – Wednesday
  • GM – General Motors – Wednesday
  • FB – Facebook – Wednesday
  • PYPL – PayPal – Wednesday
  • SHOP – Shopify – Wednesday
  • SPOT – Spotify – Wednesday
  • AMZN – Amazon.com – Thursday
  • AAPL – Apple – Thursday
  • CMCSA – Comcast – Thursday
  • DNKN – Dunkin Brands – Thursday
  • EA – Electronic Arts – Thursday
  • F – Ford – Thursday
  • GOOG – Alphabet Inc. – Thursday
  • MA – MasterCard – Thursday
  • PG – Procter & Gamble – Thursday
  • ABBV – AbbVie – Friday
  • CAT – Caterpillar – Friday
  • CHTR – Charter Communication – Friday
  • XOM – Exxon Mobil – Friday

(Want free training resources? Check our our training section for videos and tips!)

For reference, the S&P 10-Day Forecast is shown below:

Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term mixed outlook. Prediction data is uploaded after the market closes at 6 p.m. CST. Today’s data is based on market signals from the previous trading session.


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Thursday Morning Featured Symbol

Our featured symbol for Thursday is Xlinix Inc (XLNX). XLNX is showing a steady vector 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 current-day predicted support and resistance, relative to our entire data universe.

The stock is trading at $107.82, with a vector of 1.05% 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.

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 not have a position in the featured symbol, XLNX. 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. 


Highlight of a Winning Trade

On July 6th, our ActiveTrader service produced a bullish recommendation for PayPal Holdings (PYPL). ActiveTrader is included in several Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.

Trade Breakdown

PYPL entered its forecasted Strategy B Entry 1 price range $177.21(± 1.24) in the second to last hour of trading that day(7/6/20) and passed through its Target price of $178.98 in the first hour of trading on 7/8/20. The Stop Loss price was set at $116.64.


Oil

West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $41.32 per barrel, up 0.68% 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 $29.57 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.


Gold

The price for the Gold Continuous Contract (GC00) is up 1.02% at $1,964.50 at the time of publication.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $185.13, at the time of publication. Vector signals show +1.24% 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.


Treasuries

The yield on the 10-year Treasury note is down, at 0.576% at the time of publication.

The yield on the 30-year Treasury note is down, at 1.239% 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.


Volatility

The CBOE Volatility Index (^VIX) is $24.1 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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