Partial Government Shutdown Begins as 2018 Ends
U.S. stocks and indices are trading sharply lower today after unsuccessful attempts to avoid a government shutdown last week were dead on arrival in both the Senate and the House. Markets will close early today for the Christmas holiday and will be completely closed tomorrow. As long as the market remains below $253 it is in a correction and investor should expect more downside. There is no support until SPY reaches $220. For reference, the SPY Seasonal Chart is shown below:
The final full calendar week of the year will be short on trading days and light on economic reports. Labor numbers will be available at week’s end as well as home sales numbers for November. After last week’s interest rate increase by the Fed was poorly received by the President, word began to make rounds that Powell might be next on the chopping block. The Trump administration has since come forth to reassure the public of Powell’s job security, easing investors worry of a more turbulent Fed and White House relationship. Elsewhere in D.C., lawmakers from both sides of the aisle worked to avoid a government shutdown last week by both passing a stopgap spending bill and a bill with the $5 billion President Trump has asked for the border wall. Both bills did not pass the successfully pass through Congress, offering no budgetary solution to the several departments that run out of funding on Friday. Lawmakers left D.C. for the Christmas holiday and it now looks like there will be no resolution to this until after the Christmas, or even possibly after the New Year holiday.
Some things to note this week include Treasury Secretary Mnuchin continued effort to maintain market stability, geopolitical relations, and how the market continues to fair under a partially shut down government. Security Mnuchin made rounds to all major U.S banks, forming the “Plunge Protection Team.” After a historically bad December and the recent government shutdown, market conditions are worsening and Mnuchin will also meet with Fed and SEC officials. Globally, both Asian and European markets traded to mixed results today.
Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows mostly positive signals. Today’s vector figure of -1.14% moves to +6.46% in five trading sessions. The predicted close for tomorrow is 2,438.80. 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.
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Highlight of a Recent Winning Trade
On December 21st, our ActiveTrader service produced a bearish recommendation for Mastercard Inc. (MA). ActiveTrader is included in all Tradespoon membership plans and is designed for intraday trading.
Trade Breakdown
MA entered the forecasted Entry 1 price range of $182.71 (± 1.83) in its first hour of trading and hit its Target price of $180.88 in the third hour of trading that day. The Stop Loss was set at $184.54.
Wednesday Morning Featured Stock
Our featured stock for Wednesday is Barclays iPath S&P 500 VIX (VXX). VXX 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 $49.35 at the time of publication, up 4.64% from the open with a +0.89% 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 February delivery (CLG9) is priced at $43.95 per barrel, down 4.06% 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 $9.29 at the time of publication, down 2.93% from the open. Vector figures show -1.99% today, which turns -16.73% 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 February gold (GCG9) is up 1.15% at $1,272.60 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 positive signals. The gold proxy is trading at $120.02, up 1.10% at the time of publication. Vector signals show +0.21% 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 1.42% at 2.74% at the time of publication. The yield on the 30-year Treasury note is down 0.75% at 3.01% 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 +1.59% 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 15.94% at $34.91 at the time of publication, and our 10-day prediction window shows mixed signals. The predicted close for tomorrow is $27.66 with a vector of -8.59%. 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.
YEAR-END SPECIAL:
Prices are Going UP!