Markets Mixed Ahead Of FOMC Minutes, U.S.-China Trade Talks Begin Thursday
Markets are trading to mixed results to start the week
Markets are trading to mixed results to start the week which will feature an appearance from Fed Chair Powell today, FOMC minutes on Wednesday, and the start of the latest round of negotiations between the U.S. and China on Thursday.
Optimism for another interest rate cut in 2019 grows
Optimism for another interest rate cut in 2019 grows while sentiment going into the next round of trade talks remains mixed. On Friday, Powell described the economy as strong with its own set of challenges; falling in line with the latest labor report, which showed over 130,000 jobs added in September, slightly below expectations.
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Sell SPY near $294 and buy near $282
With this in mind, we believe the market is range-bound. Currently, the SPY is trading between $282-$294 and we will look sell near $294 and buy near $282 as we do not believe the market has the potential to overshoot all-time. Market Commentary readers are encouraged to maintain clearly defined stop levels with further volatility anticipated. For reference, the SPY Seasonal Chart is shown below:
Easing trade tensions will be key in supporting markets
After starting the day in the red markets traded to mixed results ahead of Powell’s appearance today, only to revert back into the red. This comes ahead of this week’s U.S.-China trade rep meeting which will discuss global trade and tariffs, and hopefully, provide some clarity on the current state of affairs. With both of the world’s largest economies ready to levy more tariffs, easing tensions will be key in supporting markets.
The latest reports from China indicate a trade group less likely to agree on a complete deal now and more so looking for further concessions and commitments involving both sides. Clarity regarding both sides going into the end of 2019 will likely be one of the main influences in market sentiment in the fourth quarter. Also affecting stocks will be the latest economic reports.
September labor data came in strong but below expectations with over 130,000 jobs added last month. This, along with several reports already released, show a Fed likely to cut rates in the upcoming FOMC. On Wednesday, look for last month’s FOMC minutes to release. Other notable reports released this week include producer price index, core CPI, and consumer sentiment index. Impeachment concerns linger over markets though until further developments occur it is unclear as to how and if this will affect markets this year.
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows mixed signals. Today’s vector figure of +0.29% moves to -2.46% in five trading sessions. 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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Highlight of a Recent Winning Trade
On September 27th, our ActiveTrader service produced a bullish recommendation for Nike Inc (NKE). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
NKE entered its forecasted Strategy B Entry 1 price range $92.17 (± 0.50) in its first hour of trading and passed through its Target price $93.09 in the first hour of trading the following trading day. The Stop Loss price was set at $91.25.
Tuesday Morning Featured Symbol
*Please note: At the time of publication we do own the featured symbol, MDLZ. 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 own personal 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 personal picks, please click here.
Our featured symbol for Tuesday is Mondelez International Inc (MDLZ). MDLZ is showing a confident vector trend 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.
The stock is trading at $55.18 at the time of publication, up 1.21% from the open with a +0.69% vector figure.
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.
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $53.03 per barrel, up 0.42% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows negative signals. The fund is trading at $11.03 at the time of publication, down 0.09% from the open. Vector figures show -0.14% today, which turns -8.55% in five 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.
The price for the Gold Continuous Contract (GC00) is down 0.99% at $1,497.90 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 $140.67, up 0.86% at the time of publication. Vector signals show -0.07% for today. 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.
The yield on the 10-year Treasury note is up 1.78% at 1.56% at the time of publication. The yield on the 30-year Treasury note is up 1.64% at 2.05% 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. Today’s vector of +0.52% moves to +0.22% in three 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.
The CBOE Volatility Index (^VIX) is up 2.70% at $17.5 at the time of publication, and our 10-day prediction window shows negative signals. The predicted close for tomorrow is $17.02 with a vector of -3.73%. 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.