Latest Housing Data Supports Markets, FOMC Minutes Wednesday

by Vlad Karpel

Our models are projecting the SPY to trade between $270-$330 level and it is our opinion the market remains overbought. We will continue monitoring VIX, as the market can overshoot support and resistance levels when VIX is trading near $30 level, and we will be buyers into any short-term corrections.

All three major U.S. indices higher today behind impressive housing and retail data

While the spread of COVID in the U.S. pressured markets last week, all three major U.S. indices traded higher today behind impressive housing and retail data. Optimism in the economy as the country deals with rapidly rising hotspots is also supporting markets today although most are expecting the economic impact to last past 2020.

FOMC minutes to release on Wednesday

Micron Technology is due to release earnings after the market close today; FedEx, General Mills, and Constellation Brands are due to report later this week. Look for the latest FOMC minutes to release on Wednesday, May Trade Deficit and Employment data on Thursday, and a closed market in observance of Independence Day Holiday on Friday. With SPY trading above $300, aggressive traders can consider adding to their positions until the market reaches $320 level. Short-term traders could consider adding to positions when SPY near $293 and reducing exposure to the market at $320. Investors should consider hedging portfolios into the rallies and we encourage maintaining clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:

Key U.S. Economic Reports/Events This Week

  • Consumer Confidence Index (June) – Tuesday
  • Fed Chair Powell, Treasury Secretary Mnuchin Congressional Testimony – Tuesday
  • ADP Employment Report (June) – Wednesday
  • FOMC Minutes – Wednesday
  • Weekly Jobless Claims (6/20) – Thursday
  • Unemployment Rate (June) – Thursday
  • Average Hourly Earnings (June) – Thursday
  • Trade Deficit (May) -Thursday

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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 negative 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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Tuesday Morning Featured Symbol

Our featured symbol for Tuesday is Eli Lilly and Company (LLY). LLY 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 $162.89, with a vector of -0.21% 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, LLY. 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. 


Oil

West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $39.63 per barrel, up 2.96% 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 $27.36 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 0.21% at $1,784.10 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 $166.54, at the time of publication. Vector signals show +0.41% 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 0.683% at the time of publication.

The yield on the 30-year Treasury note is down, at 1.435% 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 $31.78 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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