U.S.-China “Phase One” Could Be Signed Before December Tariffs

by Vlad Karpel |

U.S. stocks  higher today off positive U.S.-China reports

U.S. stocks are trading higher today off positive U.S.-China reports which indicate a part of the “phase one” deal could be signed before the December 15th tariffs, which would avert the planned tariff hikes. Reports that a partial part of the deal could be signed sooner than expected has all three major U.S. indices on track to close in the green while, globally, Asian markets closed in the red and U.K. markets hit a multi-month high off election optimism.

Google co-founders Larry Page and Sergey Brin stepped down

Alphabet Inc shares are trading higher today, one day after Google co-founders Larry Page and Sergey Brin stepped down; Sundar Pichai steps in as CEO. Other stocks in focus today include Campbell’s Soup, which has shares up 1.2% off strong earnings released this morning, and Slack Technologies and H&R Block which will report third-quarter earnings after market close.

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SPY short-term overhead resistance is currently near $315-$317 level and we do not see any technical data that supports this level being broken in the next two weeks. We will look to buy when the SPY is near $303 level. There is little evidence SPY will retest its 200 days MA and we will look to buy when the SPY is near $303 level. Further volatility is expected, as well as shallow pullbacks, and we encourage Market Commentary readers to maintain clearly defined stop levels for all positions. For reference, the SPY Seasonal Chart is shown below:

Relief in U.S.-China tensions

Following several signs of tension, the latest reported development in the U.S.-China negotiations has a partial part of the “phase one” deal signed sooner than expected. This helped erase yesterday’s losses which had U.S. stocks trading lower. Today, all three major U.S. indices closed in the green as the latest news looks to avert the planned tariff hikes set to kick in on December 15th.

The U.S. private sector added 67,000 jobs last month

Other factors pushing markets higher include several positive economic reports, including November employment and monthly factory orders. The U.S. private sector added 67,000 jobs last month while new factory orders were up to 57.1%, from the previous month’s 55.6 %. Campbell’s Soup reported third-quarter earnings before the market opened today which topped profit expectations and consequently saw shares rise over 1.2% today. After the market close today, H&R Block and Slack Technologies are due to report corporate earnings.

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Using the “^GSPC” symbol to analyze the S&P 500 our 10-day prediction window shows a near-term mixed outlook. Today’s vector figure of -0.04% moves to +1.67% in four trading sessions. 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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Highlight of a Recent Winning Trade

On November 11th, our MonthlyTrader service produced a bullish recommendation for Eli Lilly and Company (LLY). MonthlyTrader is included in Tools, Premium, Elite Trading Circle or available as a standalone subscription. This service provides 3 bullish and 3 bearish stock & single option signals for 2-5 day trades.

Trade Breakdown

LLY entered its forecasted Strategy A Entry 1 price range $112.03 (± 0.70) in its first hour of trading on 11/14 and passed through its Target price of $117.63 in the first hour of trading today- 11/25/19. The Stop Loss price was set at $106.43. Every stock recommendation includes a single option strategy based on the stock price parameters.

Thursday Morning Featured Symbol

*Please note: At the time of publication Vlad Karpel does not have a position in the featured symbol, EA. 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 own personal 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 personal picks, please click here.

Our featured symbol for Thursday is Electronic Arts Inc (EA). EA 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 current-day predicted support and resistance, relative to our entire data universe.

The stock is trading at $101.2 at the time of publication, down 0.07% from the open with a +0.88% vector figure.

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.


Oil

West Texas Intermediate for Crude Oil delivery (CL.1) is priced at $58.04 per barrel, down 0.63% from the open, at the time of publication.

Looking at USO, a crude oil tracker, our 10-day prediction model shows a near-term negative trend. The fund is trading at $12.10 at the time of publication, down 0.08% from the open. Vector figures show -0.90% today, which turns -1.29% in three trading sessions. 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 0.45% at $1,453.70 at the time of publication.

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive signals. The gold proxy is trading at $136.94, down 0.58% at the time of publication. Vector signals show +0.43% 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 1.33% at 1.77% at the time of publication.

The yield on the 30-year Treasury note is up 0.55% at 2.19% 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 overall positive signals in our 10-day prediction window. Today’s vector of +0.40% moves to +0.53% in three sessions. 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 at $11.54 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.


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