U.S. Stocks Reaching Record Highs, U.S.-China Deal and Bank Earnings Next Week

by Vlad Karpel

Next week’s U.S.-China four day meeting

Major U.S. indices are setting new intraday highs behind easing tension in the Middle East and anticipation of next week’s signing of the partial U.S.-China trade deal. Yesterday’s comments from President Trump eased fears of further military action which has shifted investor focus to next week’s U.S.-China four day meeting. Vice Premier Liu He will be part of the Chinese delegation traveling to D.C. to sign the “phase one” deal, with intent to hold the next round of negotiations in Beijing. Also holding investor attention today is the latest developments on the Boeing-Iran crash, new policies by Uber and Verizon, and the latest earnings and economic data.

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Our short-term mindset remains bullish on the market

Current support and resistance levels have edged higher,$320-$330,  and we will look to buy when SPY is near $320. Our short-term mindset remains bullish on the market, however, some shallow pullbacks going into the next earnings season are possible. Further volatility could be expected and we encourage readers to retain clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:

Latest de-escalation efforts in Iran are having positive results on the market

Following today’s gains, all three major U.S. indices were able to record intraday records. Positive sentiment heading into next week’s U.S.-China meeting in D.C. as well as the latest de-escalation efforts in Iran are having positive results on the market. Geopolitical concerns regarding further involvement in the Middle East, as well as responses from other nations, worried investors heading into this week, which initially caused shares to lower substantially. Currently, both sides are looking to avoid further military action which has helped markets rise globally. Also impacting stocks today are the latest developments regarding Boeing, Uber, Verizon, and Bed Bath & Beyond.

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Uber and Verizon shares slightly lower after their latest policy announcements

Boeing saw shares drop yesterday following the crash in Iran but have since rebounded as reports continue to speculate the crash was not due to technical difficulties but Iranian missiles. Uber and Verizon saw shares slightly lower after their latest policy announcements. Uber will allow drivers in California to deny ride requests without penalty in order to support the notion drivers are independent contractors and not employees. Verizon will drop its cable packages for TV as it reshifts its focus towards streaming.

Bed Bath & Beyond earnings missed expectations

Finally, Bed Bath & Beyond released earnings that missed expectations and underwhelmed investors, causing shares to lower over 17% today. Next week, look for the U.S.-China meeting and “phase one” signing to impact markets as well as several notable earnings: Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley.

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Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term negative outlook. Today’s vector figure of -0.25% moves to -0.57% in four trading sessions. 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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Highlight of a Recent Winning Trade

On December 20th, our ActiveTrader service produced a bullish recommendation for Eli Lily and Company (LLY). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.

Trade Breakdown

LLY entered its forecasted Strategy A Entry 1 price range $129.39(± 1.03) in its first hour of trading and passed through its Target price of $132.16 in the last hour of trading the following trading day in the final hour of trading. The Stop Loss price was set at $132.16.

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Friday Morning Featured Symbol

*Please note: At the time of publication Vlad Karpel does have a position in the featured symbol, EA. 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 Friday is Electronic Arts (EA). EA is showing a mixed 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 current-day predicted support and resistance, relative to our entire data universe.

The stock is trading at $109.23 at the time of publication, with a +0.10% 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.


Oil

West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $59.64 per barrel, up 0.05% from the open, at the time of publication.

Looking at USO, a crude oil tracker, our 10-day prediction model shows mostly positive signals. The fund is trading at $13.13 at the time of publication. Vector figures show 0.00% today, which turns to +1.46% in three 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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Gold

The price for the Gold Continuous Contract (GC00) is down 0.54% at $1,551.80 at the time of publication.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive signals. The gold proxy is trading at $147.97, at the time of publication. Vector signals show +0.51% 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.

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Treasuries

The yield on the 10-year Treasury note is down 1.15% at 1.85% at the time of publication.

The yield on the 30-year Treasury note is down 1.57% at 2.33% 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 positive signals in our 10-day prediction window. Today’s vector of +0.20% moves to 2.08% in four 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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Volatility

The CBOE Volatility Index (^VIX) is $13.45 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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(Want free training resources? Check our our training section for videos and tips!)