Tech Selloff Pressures U.S. Markets, Treasury Yields Climb Higher

by Vlad Karpel

After a strong start to the week, U.S. benchmarks shed gains with all three major indices closing in the red. The Dow, S&P, and Nasdaq slipped for the second straight session with the tech sector seeing heavy selling pressure while U.S. Treasury yields continued to climb. Vaccine distribution continues to progress rapidly in the U.S. providing positive sentiment while lawmakers negotiate the latest $1.9 trillion relief bill.

 

The latest Beige Book, released today, showed the U.S. economy expanded modestly as optimism regarding the rest of the year’s economic outlook improved. Similarly, the latest private-job reported showed a slight dip in expected jobs’ created, with additional employment data set to release Thursday and Friday. Next week, February Core CPI and Federal Budget reports are due while earnings tapper off. Globally, both Asian and European markets closed impressively higher.

 

Until an additional breakout is maintained, our models are projecting SPY to trade in the range of $364-$390. We continue to see a strong rotation from growth to value stocks and it is our opinion that the market could be prone to further corrections. The next level of support is set at the 50-day moving average, $364-$370. We encourage all market commentary readers to maintain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:

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 Tyson Foods (TSN). TSN is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast.

The stock is trading at $69.96 with a vector of -0.36% at the time of publication.

10-Day Prediction data 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, TSN. Our featured symbol is part of your free subscription service. 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) priced at $61.06 per barrel, up 2.19% 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 $40.6 at the time of publication. Prediction data 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 1.40% at $1709.30 at the time of publication.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive signals. The gold proxy is trading at $169 at the time of publication. Vector signals show +0.27% for today. Prediction data 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 up, at 1.485% at the time of publication.

The yield on the 30-year Treasury note is up, at 2.280% 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 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 $23.35 at the time of publication, and our 10-day prediction window shows mixed signals. Prediction data 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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