U.S. Q4 GDP Data Due Thursday; Nasdaq Down 2%, Oil-Futures Rebound

by Vlad Karpel

Following the second day of testimony from Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell, U.S. benchmarks closed in the red with the Nasdaq leading the pack at down 2.01%. U.S. markets dipped to finish the trading day after also closing lower on Tuesday as yields on long-term U.S. Treasury notes continue to slide. With notes trading higher for several weeks, the 10-year note now sits at 1.617%, the 30-year bond at 2.311%. Oil futures have impressively rebounded this week while the dollar trades marginally higher. Following positive sentiment from both Yellen and Powell, the market outlook continues to improve as the latest quarterly earnings and economic reports have shown.

 

Monthly manufacturing and services reports show steady growth while durable goods and core capital goods orders from last month returned better than expected. On Thursday, look out for the fourth-quarter Gross Domestic Product report as well as the regular weekly employment data; Friday will feature February Consumer Spending, Core Inflation, and Personal Income data. Globally, Asian markets closed significantly in the red while European markets traded to mixed results.

 

We continue seeing momentum behind the bulls deteriorating and we expect a short-term correction this week or the next, moving back to the 50-day moving average. Until an additional breakout is maintained, our models are projecting the SPY to trade in the range of $375-$397. The next level of support is set at the 50-day moving average of $375-$380 and 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 (February) – Wednesday
  • Core Capital Goods (February) – Wednesday
  • Markit Manufacturing PMI (March) – Wednesday
  • Markit Services PMI (March) – Wednesday
  • Gross Domestic Product (Q4) – Thursday
  • Weekly Jobless Claims (3/20) – Thursday
  • Personal Income (February) – Friday
  • Consumer Spending (February) – Friday
  • Core Inflation (February) – 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 mixed outlook. Prediction data 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 Coca-Cola Company (KO). KO is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast.

The stock is trading at $51.52 with a vector of -0.31% 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, XLK. 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) is priced at $60.86 per barrel, up 5.37% 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 $41.45 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 up 0.48% at $1733.40 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 $162.37 at the time of publication. Vector signals show +0.41% 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 down, at 1.617% at the time of publication.

The yield on the 30-year Treasury note is down, at 2.311% 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 $21.2 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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