Markets Reach Record High Ahead of Key Earnings Week, Potential for Additional Stimulus
All three major U.S. indices closed in the green
After trading impressively higher last week, U.S. stocks added to their gains this week as all three major U.S. indices closed in the green. Strong performance from the tech sector and the latest positive economic data released, including earnings, are helping markets trade higher.
Additional COVID relief bills on horizon
This week, stimulus talks resume in D.C. with Treasury Secretary Mnuchin meeting with Senate Majority Leader McConnell to discuss additional COVID relief bills while on Tuesday the Fed is set to vote on potential new committee members Judy Shelton and Christopher Waller.
(Want free training resources? Check our our training section for videos and tips!)
Q2 corporate earnings remain in the spotlight
Q2 corporate earnings will remain in the spotlight with major releases from Microsoft, Tesla, American Airlines, Intel, and more due this week. With this in mind, we are raising our “worst-case” short-term scenario to $296 as our models are projecting the SPY to trade between $296-$330. Sector leadership is widening and China continues to break from its recent trading channel; at this moment, we still believe the market remains overbought. We will continue monitoring the VIX as the market can overshoot support and resistance levels when VIX is trading near $30 level.
Short-term traders could consider adding to positions when SPY nears $293
We will look to be buyers into any short-term corrections and aggressive traders can consider adding to their positions until the market reaches $320 level for SPY. Short-term traders could consider adding to positions when SPY nears $293 and reduce exposure to the market at $320. 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
- FOMC Vote on Fed Nominations Judy Shelton, Christopher Waller – Tuesday, July 21st
- Existing Home Sales (June) – Wednesday, July 22nd
- Weekly Jobless Claims (7/18) – Thursday, July 23rd
- Leading Economic Indicators (June) – Thursday, July 23rd
- New Home Sales (June) – Friday, July 24th
Upcoming Earnings
- COF – Capital One Financial – Tuesday, July 21st
- KO – Coca Cola – Tuesday, July 21st
- PM – Philip Morris International – Tuesday, July 21st
- SNAP – Snap – Tuesday, July 21st
- MSFT – Microsoft – Wednesday, July 22nd
- TSLA – Tesla – Wednesday, July 22nd
- SAVE – Spirit Airlines – Wednesday, July 22nd
- UAL – United Airlines – Wednesday, July 22nd
- AAL – American Airlines – Thursday, July 23rd
- ATT – AT&T – Thursday – July 23rd
- INTC – Intel – Thursday, July 23rd
- TWTR – Twitter – Thursday, July 23rd
- AXP – American Express – Friday, July 24th
- VZ – Verizon Communications – Friday, July 24th
(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 positive 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.
Vlad’s Portfolio Lifetime Membership!
DO AS I DO… AS I DO IT WATCH LIVE AS I WORK THE MARKETS! TRY IT NOW RISK-FREE!
Click Here to Sign Up
Tuesday Morning Featured Symbol
Our featured symbol for Tuesday is Baxter International Inc (BAX). BAX 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.
(Want free training resources? Check our our training section for videos and tips!)
The stock is trading at $87.82, 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 not have a position in the featured symbol, BAX. 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 $41.01 per barrel, up 1.81% 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 $28.88 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 0.02% at $1,813.80 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows mixed signals. The gold proxy is trading at $170.35, at the time of publication. Vector signals show +0.19% 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.
(Want free training resources? Check our our training section for videos and tips!)
Treasuries
The yield on the 10-year Treasury note is up, at 0.634% at the time of publication.
The yield on the 30-year Treasury note is up, at 1.333% 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 $27.94 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.
(Want free training resources? Check our our training section for videos and tips!)
