All Eyes on Apple, China Relations Could Improve

All three major U.S. indices are looking at recording their third straight day of gains behind strong earnings and renewed optimism in global trade relations. Apple is due to report today after market close, one of many big-names still yet to report, while Facebook reported yesterday to fairly positive results. On the tariff front, recent tweets from President Trump indicate to some progress with Chinese President Xi:

While there is some optimism in the more progressive rhetoric, rather than the previous combative back and forth the U.S. and China engaged in which resulted in harsh tariffs and threats, there is still no scheduled talks between the two sides and therefore it should be an issue worthy of monitoring. For now, midterm elections will continue to hold a presence over markets. Any strong rallies will be capped until next week’s elections are through. The late stages of a bull market are on the horizon for November and should continue through the first quarter of 2019. Current levels of SPY support and resistance are $260-$280, if they are violated, expect next level to be in the range of $255-$287. For reference, Tradespoon Seasonal Chart for SPY is shown below.

There is no bigger earnings report today than Apple which can help support the rally in tech and internet related companies. Yesterday, Facebook rose by almost 7% in early morning trading after Tuesday’s earnings showed growth but ultimately missed expectations. This helped shares end near a 3% gain yesterday, supporting the Nasdaq, but slightly down today at just under 1% loss for the day. Other FAANG members to have already reported include Amazon and Google last week, both beat expectations, while Netflix reported the week before that. Spotify slightly rose in premarket movement only to fall almost 7% for today after third-quarter earnings missed expectations. DowDuPont shares rose by 7% after the company announced earnings that beat expectations along with a $3 billion stock buyback program. Besides Apple, other big after-market-close reporting include Starbucks, Kraft Heinz, Metlife, and CBS. Earnings to monitor tomorrow include Berkshire Hathaway, Exxon, Chevron, and Alibaba Group.

Globally,  Asian markets were mostly up today, with Chinese markets up while Japan’s Nikkei index closed lower. European markets were modestly up today while oil lowered today. October was a particularly bad month for the commodity as it experienced its worst monthly performance in over two years. Traders of the commodity should continue monitoring Iran sanctions and any further Middle-East developments. The dollar is slightly down today while gold, commonly trading inversely of the dollar, is up almost 2% today.

Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows mixed signals. Today’s vector figure of +0.71% moves to -4.59% in five trading sessions. The predicted close for tomorrow is 2,760.29. 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.  

Highlight of a Recent Winning Trade

On October 30th, our ActiveTrader service produced a bullish recommendation for HCP Inc. (HCP). ActiveTrader is included in all Tradespoon membership plans and is designed for intraday trading.

Trade Breakdown

HCP entered the forecasted Entry 1 price range of $27.02 (± 0.14) in its first hour of trading and hit its Target price of $27.29 that hour, reaching a high of $27.84 for the trading day. The Stop Loss was set at $26.75.

Volatility Performance

Even with increased volatility, Tradespoon technology has been able to provide strong results and accuracy in our post-selloff trading. Similar selloff, to the one we’re seeing this week, in mid-August resulted in 77% winning trades, or 7 out of 9!

On October 16th, in the midst of last week’s volatility, we recommended Netflix (Option) call spread at $0.54 and shorted the stock at $0.10 (36.36% Net Gain!), and that’s just one of many winning trades we had during volatility!

Friday Morning Featured Stock

Our featured stock for Friday is Goldman Sachs Group Inc (GS). GS is showing a confident 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 predicted support and resistance, relative to our entire data universe.  

*Please note: Our featured stock 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 ActiveInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.

The stock is trading at $226.85 at the time of publication, up 0.66% from the open with a +1.17% 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 next trading session relative to the average of actual prices for the last trading session. The column shows 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 December delivery (CLZ8) is priced at $63.69 per barrel, down 2.48% from the open, at the time of publication. Looking at USO, a crude oil tracker, our 10-day prediction model shows negative signals. The fund is trading at $13.49 at the time of publication, down 2.18% from the open. Vector figures show -0.58% today, which turns -1.16% in five trading 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.

Gold

The price for December gold (GCZ8) is up 1.70% at $1,235.60 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 $116.76, up 1.39% at the time of publication. Vector signals show +0.23% for today. 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.  

Treasuries

The yield on the 10-year Treasury note is down 0.03% at 3.14% at the time of publication. The yield on the 30-year Treasury note is down 0.23% at 3.38% 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 +0.19% moves to +2.08% 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 down 8.86% at $19.35 at the time of publication, and our 10-day prediction window shows positive signals. The predicted close for tomorrow is $21.90 with a vector of +2.29%. 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.