Markets Mixed Following FOMC Announcement
Fed is likely holding interest rates near zero through 2023
The new top for the SPY is set at $360 and we believe it will be retested by the end of September or early October. U.S. Benchmarks slumped today, giving up most of their gains following the latest from the Federal Open Market Committee. Fed Chair Powell met with the press following the latest FOMC meeting and announced the Fed is likely holding interest rates near zero through 2023 while also outlining the latest risks to the economy. Inflation and employment were also discussed as key factors for the move. August Retail Sales, released today, showed a 0.6% rise while tomorrow we will see monthly housing data and weekly employment reports. Gold Futures, the Dollar, and Treasuries saw moved slightly higher while Oil saw a sizable boost.
Both Asian and Europen markets closed to mixed results. With the SPY breaking through its overhead resistance at $340, short-term traders could consider adding to positions when SPY is near $332. Our models are still projecting the SPY to trade in the range of $330-$360 and we will look to be buyers into any short-term corrections. We will continue monitoring the VIX as the market can overshoot support and resistance levels when VIX is trading near $20 level, 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
- Retail Sales (August) – Wednesday
- Business Inventories (July) – Wednesday
- FOMC Announcement/Powell Press Conference – Wednesday
- Housing Starts (August) – Thursday
- Building Permits (August) – Thursday
- Weekly Jobless Claims (9/12) – Thursday
Upcoming Earnings
- BRC – Brady Corp. – Wednesday
- MLHR – Herman Miller – Wednesday
- SCHL – Scholastic Corp. – Thursday
- PGR – Progressive Corp. – Thursday
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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 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 Discover Financial Services (DFS). DFS is showing a steady vector 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 $59.22 with a vector of -0.88% at the time of publication.
10-Day 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, DFS. 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.
Oil
West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $40.17 per barrel, up 4.94% 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 $28.7 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 0.05% at $1,967.20 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 $183.97, at the time of publication. Vector signals show -0.52% 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 0.697% at the time of publication.
The yield on the 30-year Treasury note is up, at 1.463% 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 $26.04 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.
