FOMC Raise Interest Rates by Quarter Point, Three More Hikes in 2019

Key U.S. tickers, such as Dow, S&P, Nasdaq, and the dollar, were all up today after the Federal Reserve released its latest policy directive. Feds raised interest rates by a quarter point, one of two expected hikes due in 2018, which likely points to another hike in the December meeting. With all eyes on the interest rate before the meeting, investors will now turn their attention to the dollar and interest-sensitive sectors like emerging markets, commodities, currencies, and treasuries. Although the dollar saw support following the meeting, it looks like treasuries have begun retreating. Three more hikes are projected for 2019. SPY Seasonal Chart forecast is shown below:

The vote to raise interest rates was unanimous and instant reaction was positive, with all three major U.S. indices slightly up. Since then, markets reversed course with all three major U.S. indices closing for small net losses for the day. As investors dissected the new policy, one point of concern for investors and analysts alike was the removal of the phrase “remains accommodative” in its policy. This, to some, signaled a more hawkish bias going forward. Following the meeting, Fed Chairman Powell met with the media and had some interesting input. Some things to note in Powell’s prepared statement before the press include repeated indication of a strong and healthy economy, reiterating that the financial system is stronger than it was 10 years ago and that dropping “accommodative” from the policy does not imply any changes in the expected course of interest rates. Although starting strong before and during the meeting, tickers started losing steam as Powell’s press conference went on. With multiple questions referencing previous recessions and uncertainty about financial outlook, Powell acknowledged “we have been on an unsustainable fiscal path for a long time,” and that the 2008 crisis was a product of the Fed not paying attention to the stability of the financial system. Powell indicated that he and his peers are actively working at combating this and ensuring financial stability. In regards to emerging markets, Powell stated that the fed “can’t worry too much” about the impact of its policies outside of the U.S. and that they are doing what is best to keep the U.S economy strong and growing.

Besides the FOMC, trade-related news is still on the mind of investors as the back and forth tariffs between China and the U.S. continue. Still, stocks look little bothered by the tension and continue to adhere and react solely to economic data. Some big market-movers to note include Nike, which saw its stock struggle after a better than expected 2019 outlook was clouded with rising expenses, while Papa John’s trended in the opposite direction, up 8%, after news that recently ousted company-founder John Schneider was interested in buying back his company. Globally, both Asian and European stocks were up today.

Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows mixed signals. Today’s vector figure of -0.01% moves to +0.68% in five trading sessions. The predicted close for tomorrow is 2,917.95. 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 September 20h, our ActiveTrader service produced a bearish recommendation for Twenty First Century Fox Inc (FOX). ActiveTrader included in all Tradespoon membership plans and is designed for intraday trading.

Trade Breakdown

FOX entered the forecasted Entry 1 price range of $44.39 (± 0.06) in its second hour of trading and moved through its Target price of $43.95 the following trading session in its final hour of trading. The Stop Loss was set at $44.83.

Live Trading Room Update

See how we traded in volatile conditions and what you might expect in our next Live Trading Room. During recent volatility, we held Live Trading Room Session, on September 25th, where we had some great trades below!

Our Live Trading Room is open every trading day from 9:15 am Eastern Time for the first hour of trading, but these Live Trading Sessions are only available for Premium Members.

We wanted to share the recording with you so you can see the profits you might be missing- even during volatile markets.

Click Here to Watch the Recording

Thursday Morning Featured Stock

Our featured stock for Thursday is Cisco SYS Inc (CSCO). CSCO 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 $48.41 at the time of publication, down 0.12% from the open with a +0.27% 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 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 November delivery (CLX8) is priced at $71.96 per barrel, down 0.44% from the open, at the time of publication. Looking at USO, a crude oil tracker, our 10-day prediction model mostly positive signals. The fund is trading at $15.11 at the time of publication, down 1.05% from the open. Vector figures show -0.86% today, which turns +1.87% 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 down 0.52% at $1,198.8 0 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 positive signals. The gold proxy is trading at $113.05, down 0.52% at the time of publication. Vector signals show +0.24% 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 1.59% at 3.05% at the time of publication. The yield on the 30-year Treasury note is down 1.35% at 3.18% 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 mostly negative signals in our 10-day prediction window. Today’s vector of +0.04% moves to -0.58% 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 7.28% at $12.53 at the time of publication, and our 10-day prediction window shows mixed signals. The predicted close for tomorrow is $12.67 with a vector of +1.96%. 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.