Markets Slide as Stimulus Stalls, Big-Tech Earnings Due This Week

by Vlad Karpel

All three major U.S. indices closed deep in the red, over 1.5% down but off session lows, as data showed COVID-19 cases continue to rise while stalled stimulus talks in D.C. also pressured stocks. Last week, all three indices finished lower for the week with over 83,000 reported new cases, topping the previous mid-summer record of 77,000 cases in a week.

 

This week, earnings will remain at the forefront of the market while additional stimulus talks and the Supreme Court confirmation could also impact U.S. shares. Marquee earnings this week include Alphabet, Microsoft, Visa, Amazon, Apple, and Facebook. With the market having broken through the $340-342 support level, and prone for further corrections, the next level of support is set at $330. Our latest models are projecting the SPY to trade in the range of $318-$360 and we will look to be buyers into any short-term corrections. Short-term traders could consider adding to positions when SPY is near $330. We continue monitoring VIX levels as the market can overshoot support and resistance levels when VIX is trading near the $25 level. As always, we encourage all market commentary readers to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:

Key U.S. Economic Reports/Events This Week

  • Durable Goods Orders (September) – Tuesday
  • Core Capital Goods Orders (September) – Tuesday
  • Consumer Confidence Index (October) – Tuesday
  • Gross Domestic Product (Q3) – Thursday
  • Weekly Jobless Claims (10/24) – Thursday
  • Pending Home Sales Index (September) – Thursday
  • Personal Income (September) – Friday
  • Consumer Spending (September) – Friday
  • Core Inflation (September) – Friday
  • Consumer Sentiment Index (October) – Friday

Upcoming Earnings

  • MSFT – Microsoft – Tuesday
  • PFE – Pfizer – Tuesday
  • MRK – Merck – Tuesday
  • MMM – 3M Company – Tuesday
  • RTX – Raytheon Tech – Tuesday
  • CAT – Caterpillar – Tuesday
  • V – Visa – Wednesday
  • MA – MasterCard – Wednesday
  • UPS – United Parcel Service – Wednesday
  • BA – The Boeing Company – Wednesday
  • SNE – Sony – Wednesday
  • GILD – Gilead Sciences – Wednesday
  • GE – General Electric – Wednesday
  • EBAY – eBay – Wednesday
  • F – Ford Motor – Wednesday
  • AAPL – Apple – Thursday
  • AMZN – Amazon.com – Thursday
  • GOOG – Alphabet Inc. – Thursday
  • FB – Facebook – Thursday
  • CMCSA – Comcast – Thursday
  • SHOP – Shopify – Thursday
  • SBUX – Starbucks – Thursday
  • ATVI – Activision Blizzard – Thursday
  • SPOT – Spotify Tech – Thursday
  • ABBV – Abbvie – Friday
  • XOM – Exxon Mobil – Friday
  • CVX – Chevron – Friday
  • HON – Honeywell – Friday
  • CHTR – Charter Communications – Friday

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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 positive 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 iPath S&P 500 VIX Short-Term (VXX). VXX is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast.

The stock is trading at $24.17 with a vector of 1.11% at the time of publication.

10-Day 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 have a position in the featured symbol, VXX. 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 $38.66 per barrel, up 0.26% at the time of publication.

Looking at USO, a crude oil tracker, our 10-day prediction model shows positive signals. The fund is trading at $27.11 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 down 0..09% at $1,903.80 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 $178.55, at the time of publication. Vector signals show -0.25% 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 0.804% at the time of publication.

The yield on the 30-year Treasury note is down, at 1.596% 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 $32.46 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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