S&P Nears Record Level as COVID Rate Slows

by Vlad Karpel | 08/12/2020, 18:24

Upbeat earnings continue to release

All three major U.S. indices recorded impressive gains today as stronger-than-expected economic data and upbeat earnings continue to release.

Slowdown in the number of new U.S. COVID

Similarly, a reported slowdown in the number of new U.S. COVID cases as well as momentum regarding a vaccine is also supporting markets today.

The S&P remains close to its record high

The S&P remains close to its record high and we are seeing strong rotation into the value stocks (industrial, metals, energy, and banks) and away from growth stocks. Our latest models projecting the SPY to trade between $296-$333, marking $296 as our “worst-case” scenario. As long as the market trades above the $323 level for the SPY, Market Commentary readers can consider adding to their positions using market pullbacks. Short-term traders could consider adding to positions when SPY nears $293 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 $30 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

Consumer Price Index (July) – Wednesday
Core CPI (July) – Wednesday
Federal Budget (July) – Wednesday
Import Price Index (July) – Thursday
Weekly Jobless Claims (8/8) – Thursday
Retail Sales (July) – Friday
Productivity (Q2) – Friday
Unit Labor Costs (Q2) – Friday
Industrial Production (July) – Friday
Consumer Sentiment Index (July) – Friday
Business Inventories (June) – Friday

Upcoming Earnings

CSCO – Cisco Systems – Wednesday
LYFT – Lyft – Wednesday
TCEHY – Tencent Holdings – Wednesday
BIDU – Baidu – Thursday
DKNG – DraftKings – Friday
JD – JD.com – Friday

(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.

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Thursday Morning Featured Symbol

Our featured symbol for Thursday is Rockwell Automation Inc (ROK). ROK 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 $232.18, with a vector of -0.48% 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 not have a position in the featured symbol, ROK. 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 $42.60 per barrel, up 0.19% 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 $29.82 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 down 1.13% at $1,927.00 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 $179.94, at the time of publication. Vector signals show -0.74% 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 0.559% at the time of publication.

The yield on the 30-year Treasury note is up, at 1.234% 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 $22.28 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.