Labor Data Supports U.S. Markets, COVID Cases Rise
Until the market reaches $320 level for SPY, aggressive traders can consider adding to their positions. Our models are projecting the SPY to trade between $285-$330 level. We are raising our “worse case” short-term scenario to $285 with China clearly breaking out from their recent trading channel as sector leadership remains narrow.
Tuesday recording the single-day record for Covid cases at 60,000
Following a dip in all three major U.S. indices on Tuesday, markets rebound today with the Dow, Nasdaq, and S&P rising in early morning trading. Additional labor data, following last week’s positive reports, showed a record number of hirings in June, which is supporting markets today. The recent spike of COVID cases in the U.S. is adding to some market pressure, with Tuesday recording the single-day record for cases at 60,000.
Major banks releasing Q2 data next week
Earnings season picks up next week with major banks releasing Q2 data. Currently, we believe the market is overbought and we will continue monitoring VIX. The market can overshoot support and resistance levels when VIX is trading near $30 level and we will be buyers into any short-term corrections. Short-term traders could consider adding to positions when SPY near $293 and reducing exposure to the market at $320. Investors should consider hedging portfolios into the rallies and we encourage maintaining clearly defined stop-levels for all positions. For reference, the SPY Seasonal Chart is shown below:
Key U.S. Economic Reports/Events This Week:
- Weekly Jobless Claims (7/4) – Thursday, July 9th
- Wholesale Inventories (May) – Thursday, July 9th
- Producer Price Index (June) – Friday, July 10th
Upcoming Earnings:
- WBA – Walgreens Boots Alliance, Inc. – Thursday, July 9th
- SJR – Shaw Communications Inc. – Friday, July 10th
- PEP – Pepsico, Inc. – Monday, July 13th
- JPM – JPMorgan Chase Co. – Tuesday, July 14th
- C – Citigroup Inc. – Tuesday, July 14th
- WFC – Wells Fargo Co. – Tuesday, July 14th
- DAL – Delta Air Lines, Inc. – Tuesday, July 14th
- UNH – UnitedHealth Group – Wednesday, July 15th
- IBM – International Business Machines – Wednesday, July 15th
- UNH – UnitedHealth Group – Wednesday, July 15th
- GS – Goldman Sachs Group – Wednesday, July 15th
- PGR – The Progressive Corp. – Wednesday, July 15th
- PNC – The PNC Financial Services Group – Wednesday, July 15th
- EBAY – eBay Inc. – Wednesday, July 15th
- MSFT – Microsoft Corporation – Thursday, July 16th
- JNJ – Johnson & Johnson – Thursday, July 16th
- NFLX – Netflix – Thursday, July 16th
- BAC – Bank of America – Thursday, July 16th
- ABT – Abbott Laboratories – Thursday, July 16th
- HON – Honeywell International – Thursday, July 16th
- MS – Morgan Stanley – Thursday, July 16th
- HDFC – HDFC Bank – Friday, July 17th
- BLK – Blackrock, Inc. – Friday, July 17th
(Want free training resources? Check our our training section for videos and tips!)
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 Chipotle Mexican Grill (CMG). CMG is showing a steady vector in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (A) indicating it ranks in the top 10th percentile for accuracy for current-day predicted support and resistance, relative to our entire data universe.
The stock is trading at $1112.25, with a vector of -0.48% at the time of publication.
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.
*Please note: At the time of publication Vlad Karpel does have a position in the featured symbol, CMG. 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 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.
Highlight of a Winning Trade
On July 6th, our ActiveTrader service produced a bullish recommendation for PayPal Holdings (PYPL). ActiveTrader is included in several Tradespoon membership plans and is designed for day trading, with signals meant to last for 1-2 days.
Trade Breakdown
PYPL entered its forecasted Strategy B Entry 1 price range $177.21(± 1.24) in the second to last hour of trading that day(7/6/20) and passed through its Target price of $178.98 in the first hour of trading on 7/8/20. The Stop Loss price was set at $116.64.
Oil
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $40.85 per barrel, up 0.57% from the open, 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 $29.2 at the time of publication. 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.
Gold
The price for the Gold Continuous Contract (GC00) is up 0.33% at $1,815.00 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $169.89, at the time of publication. Vector signals show +0.03% 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.
Treasuries
The yield on the 10-year Treasury note is up, at 0.657% at the time of publication.
The yield on the 30-year Treasury note is down, at 1.391% 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 is 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 $29.36 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.
