Retail Data, Earnings Season, and U.S.-China Tension Guide Markets
Stocks are trading lower
Following today’s weaker than expected retail data release and the growing tension between the U.S. and China, stocks are trading lower.
Trade sentiment have reversed course
Last Friday’s U.S.-China agreement pushed U.S. benchmarks into the green to start the week, while also being backed by strong corporate earnings, but recent comments from China have reversed course on trade sentiment, citing “strong countermeasures” by U.S. Congress in support of Hong Kong protesters. Brexit and U.S.-China negotiations remain key for global trade while U.S. corporate earnings to follow this week include Netflix and IBM after market close today, Honeywell and Morgan Stanley tomorrow.
(Want free training resources? Check our our training section for videos and tips!)
With the current market conditions in mind, we will look to buy at $294-$296 level for SPY. We do not see evidence the market will retest its 200 days MA and believe it is just a matter of time for the market to break through 52 weeks high. We will follow the semiconductor sector as we approach a strong seasonal trend for the market to make new highs. Although the market is range-bound, further volatility can occur and we recommend readers maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Focus firmly shifts to earning season
With last week’s trade talks behind us, focus now firmly shifts to earning season. Still, sentiment and further development between the U.S. and China will dictate markets through 2019. All three major U.S. indices are on track to close in the red as strong corporate earnings could not hold off shakey retail data and shrinking optimism in a U.S.-China trade deal long term. The latest comments from China showed a different tone than what followed last week’s meeting as Chinese officials have called out U.S. Congress. In regards to the recent Hong Kong protest “strong countermeasures” were cited by China as a detractor to progress and positive sentiment. Retaliatory measures could occur and while the latest round off tariffs was put on pause, additional tariffs could still be in play. Globally, both Asian and European markets closed to mixed results.
Major banks released corporate earnings which supported markets with better-than-expected data
Yesterday, major banks released corporate earnings which supported markets with better-than-expected data from Chase and Citigroup, as well as positive reports from Goldman Sachs and Wells Fargo. Also reporting yesterday were Johnson & Johnson, BlackRock, and United Health Group, all pushing shares higher. Major earnings to follow for the rest of the week include IBM, CSX Corporation, HoneyWell, Morgan Stanley, Philip Morris, and Coca-Cola. One of the biggest reports of the week will be released after the market close today and will feature Netflix’s third-quarter data. With growing competition in the streaming landscape and last quarter’s dip in subscriptions, the first in eight years, today’s report will illuminate the company’s current footing and forward guidance.
(Want free training resources? Check our our training section for videos and tips!)
Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows positive signals. Today’s vector figure of +0.31% moves to +2.30% 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.
Make more money during market turnaround…
75% Success Rate!
Actual Returns… 1431%!
Even in this wild UP and down market, you can do it too.
This no-risk trial will empower you with the same incredible volatility tested “tools” I use to trade my own money!
Click Here to Learn More
Highlight of a Recent Winning Trade
On October 10th, our ActiveTrader service produced a bullish recommendation for Wal-Mart Stores (WMT). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
WMT entered its forecasted Strategy B Entry 1 price range $118.93 (± 0.36) in its first hour of trading and passed through its Target price of $120.12 in the second hour of trading the following trading day. The Stop Loss price was set at $117.74.
Thursday Morning Featured Symbol
*Please note: At the time of publication we do not own the featured symbol, LRCX. 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 Thursday is Lam Research Corporation (LRCX). LRCX is showing a confident vector trend in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (A) indicating it ranks in the top 10th percentile for accuracy for predicted support and resistance, relative to our entire data universe.
The stock is trading at $234.34 at the time of publication, down 3.19% from the open with a +0.83% vector figure.
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.
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.
Oil
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $53.36 per barrel, up 1.06% from the open, 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 $11.16 at the time of publication, up 0.90% from the open. Vector figures show +0.45% today, which turns +2.78% 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.
Gold
The price for the Gold Continuous Contract (GC00) is up 0.60% at $1,492.20 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mostly negative signals. The gold proxy is trading at $140.3, up 0.49% at the time of publication. Vector signals show -0.34% 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 1.67% at 1.74% at the time of publication. The yield on the 30-year Treasury note is down 0.24% at 2.23% 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 negative signals in our 10-day prediction window. Today’s vector of -0.75% moves to -0.145% 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.
Volatility
The CBOE Volatility Index (^VIX) is up 2.88% at $13.93 at the time of publication, and our 10-day prediction window shows positive signals. The predicted close for tomorrow is $14.23 with a vector of +5.18%. 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.
(Want free training resources? Check our our training section for videos and tips!)
Make more money during market turnaround…
75% Success Rate!
Actual Returns… 1431%!
Even in this wild UP and down market, you can do it too.
This no-risk trial will empower you with the same incredible volatility tested “tools” I use to trade my own money!