Tech Talk for Monday January 28th 2013

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(Update:  Be sure to catch Don Vialoux as he is now scheduled to appear on BNN Thursday, Jan 31st at 4:50 PM EST)

Pre-opening Comments for Monday January 28th

U.S. equity index futures are higher this morning. S&P 500 futures are up 3 points. Index futures are reflecting strength in Chinese markets. The Shanghai Composite gained 2.43%. Crude oil gained $0.43 per barrel.

Index futures improved slightly following release of the December Durable Goods Orders report at 8:30 AM EST. Consensus was a gain of 2.0% versus an increase of 0.8% in November. Actual was a gain of 4.6%. Ex transportation, consensus was no change from November. Actual was an increase of 1.3%.

Caterpillar added $2.22 to $97.80 after reporting higher than consensus fourth quarter results.

Trans Ocean gained $1.40 to $58.16 on news that Carl Icahn increased his interest in the company to 5.6%.

Halliburton improved $0.37 to $40.09 after MLV Equity upgraded the stock from Hold to Buy.

Magna International added $0.23 to 53.35 after KeyBanc upgraded the stock from Hold to Buy.

Facebook improved $0.43 to $31.97 after Raymond James upgraded the stock from Market Perform to Outperform.

Apple fell another $2.25 to $437.63 after RW Baird downgraded the stock from Outperform to Neutral.

Ford eased $0.22 to $13.46 after Buckingham downgraded the stock from Neutral to Underperform.

 

Economic News This Week

December Durable Goods Orders to be released at 8:30 AM EST on Monday are expected to increase 1.6% versus a gain of 0.8% in November.

November Case/Shiller 20 city home price index to be released at 9:00 AM EST on Tuesday is expected to show a year-over-year gain of 5.2% versus an increase of 4.3% in October.

January Consumer Confidence to be released at 10:00 AM EST on Tuesday is expected to remain unchanged at 65.1.

January ADP Employment Report to be released at 8:15 AM EST on Wednesday is expected to fall to 175,000 from 215,000 in December.

First estimate of annualized fourth quarter GDP to be released at 8:30 AM EST on Wednesday is expected to fall to 1.0% from 3.1% in the third quarter.

The FOMC decision announcement on the Fed Fund rate to be released at 2:15 AM EST on Wednesday is expected to remain unchanged at 0.25%.

Weekly Initial Jobless Claims to be released at 8:30 AM EST on Thursday are expected to increase to 345,000 from 330,000 last week.

December Personal Income to be released at 8:30 AM EST on Thursday is expected to increase 0.7% versus a gain of 0.6% in November. December Personal Spending is expected to increase 0.3% versus a gain of 0.4% in November.

The January Chicago Purchasing Managers Index to be released at 9:45 AM EST on Thursday is expected to improve to 50.5 from 48.9.

January Non-farm Payrolls to be released at 8:30 AM EST on Friday are expected to increase to 180,000 from 155,000 in December. January Private Non-farm Payrolls are expected to increase to 193,000 from 168,000 in December. The January Unemployment Rate is expected to slip to 7.7% from 7.8% in December. January Hourly Earnings are expected to increase 0.2% versus a gain of 0.3% in December.

January Michigan Sentiment to be released at 9:55 AM EST on Friday is expected to improve to 71.4 from 71.3 in December.

January ISM to be released at 10:00 AM EST on Friday is expected to slip to 50.5 from 50.7 in December.

December Construction Spending to be released at 10:00 AM EST on Friday is expected to increase 0.5% versus a decline of 0.3% in November.

 

Earnings News This Week

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Equity Trends

The S&P 500 Index added 16.98 points (1.14%) last week. Intermediate trend is up. The Index closed at a five year high. The Index remains above its 20, 50 and 200 day moving averages. Short term momentum indicators remain overbought.

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Percent of S&P 500 stocks trading above their 50 day moving average increased last week to 92.60% from 90.80%. Percent remains intermediate overbought.

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Percent of S&P 500 stocks trading above their 200 day moving average increased last week to 88.40% from 85.60%. Percent remains intermediate overbought.

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Bullish Percent Index for S&P 500 stocks increased last week to 81.40% from 78.40% and remained above its 15 day moving average. The Index remains intermediate overbought.

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Bullish Percent Index for TSX Composite stocks increased last week to 66.80% from 64.37% and remained above its 15 day moving average. The Index remains intermediate overbought.

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The TSX Composite added another 90.34 points (0.71%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the TSX Composite Index remains neutral. The Index has a history of positive relative performance between now and the first week in March. Short term momentum indicators are overbought.

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Percent of TSX stocks trading above their 50 day moving average fell last week to 65.18% from 69.94%. Declines in gold stocks took their toll. Percent remains intermediate overbought.

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Percent of TSX stocks trading above their 200 day moving averages fell last week to 64.78% from 68.42%. Percent remains intermediate overbought.

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The Dow Jones Industrial Average gained 246.28 points (1.80%) last week. Intermediate trend is up. The Average remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index has changed from negative to positive.

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Bullish Percent Index for Dow Jones Industrial Average stocks increased last week to 73.33% from 63.33% and moved back above their 15 day moving average. The Index remains intermediate overbought.

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Bullish Percent Index for NASDAQ Composite stocks increased last week to 62.35% from 61.02% and remained above its 15 day moving average. The Index remains intermediate overbought.

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The NASDAQ Composite Index added 15.00 points (0.48%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index changed from neutral to negative. Short term momentum indicators are overbought.

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The Russell 2000 Index gained another 12.44 points (1.39%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive. Short term momentum indicators are overbought.

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The Dow Jones Transportation Average gained 174.78 points (3.07%) last week to close at another all-time high. Intermediate trend is up. The Average remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive. Short term momentum indicators are overbought.

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The Australia All Ordinaries Composite Index improved 79.18 points (1.66%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains neutral. Short term momentum indicators are overbought.

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The Nikkei Average gained 317.01 points (2.99%) last week. Intermediate trend is up. Resistance has formed at 10,952.31. The Average remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains neutral. Short term momentum indicators have rolled over from overbought levels.

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Europe 350 iShares gained $0.81 (2.01%) last week. Intermediate trend is up. Units remain above their 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index has changed from positive to neutral. Short term momentum indicators are overbought.

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The Shanghai Composite Index fell 25.77 points (1.11%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index has changed from positive to neutral. Short term momentum indicators are rolling over from overbought levels.

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The Athens Index added 40.58 points (4.17%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive. Short term momentum indicators are overbought.

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Currencies

The U.S. Dollar slipped 0.29 (0.36%) last week. A five month trading range between 78.60 and 81.46 has been established. The Dollar remains below its 50 and 200 day moving averages and fell below its 20 day moving average on Friday. Short term momentum indicators are neutral.

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The Euro gained another 1.49 (1.09%) last week. Intermediate trend remains up. The Euro remains above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought.

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The Canadian Dollar fell 1.38 cents U.S. (1.37%) last week. An intermediate downtrend resumed on a break below support at 99.43 on Friday. The Canuck Buck remains below its 20 and 50 day moving averages and fell below its 200 day moving average on news that the Bank of Canada’s overnight rate will remain low for an extended period of time. Short term momentum indicators are trending down.

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The Japanese Yen fell another 0.94 (0.85%) last week. Intermediate trend is down. The Yen remains below its 20, 50 and 200 day moving averages. Short term momentum indicators are oversold.

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Commodities

The CRB Index slipped 1.71 points (0.57%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains negative. Short term momentum indicators are neutral.

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Gasoline added $0.09 per gallon (3.21%) last week. Intermediate trend changed from neutral to up on a break above $2.82. Gasoline remains above its 20 and 50 day moving averages and moved above its 200 day moving average. Strength relative to the S&P 500 Index changed from neutral to up.

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Crude Oil eased $0.16 per barrel (0.17%) last week. Intermediate trend is up. Crude remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive. Short term momentum indicators are overbought.

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Natural Gas fell $0.11 (3.08%) last week. Intermediate trend is neutral. Gas remains above its 20 and 200 day moving averages, but fell below its 50 day moving average. Strength relative to the S&P 500 Index remains neutral. Short term momentum indicators are overbought and showing early signs of rolling over.

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The S&P Energy Index gained 10.19 points (1.81%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive. Short term momentum indicators are overbought.

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The Philadelphia Oil Services Index gained another 4.86 points (2.02%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive. Short term momentum indicators are overbought.

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Gold eased $31.40 per ounce (1.97%) last week. Intermediate trend is neutral. The Index remains below its 50 day moving average and fell below its 20 and 200 day moving averages. Support is at 1,626.00. Gold fell back after an unsuccessful attempt to break above $1,700. Strength relative to the S&P 500 Index remains negative. Short term momentum indicators are rolling over from overbought levels.

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The Gold Bug Index plunged 30.81 points (7.17%) last week. Intermediate downtrend was confirmed on a break below support at 418.74. The Index remains below its 20, 50 and 200 day moving averages. Strength relative to Gold remains negative. Short term momentum indicators are oversold.

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Silver lost $0.72 per ounce (2.25%) last week. Intermediate trend remains up despite weakness late last week. Silver remains above its 20 and 200 day moving averages. Strength relative to gold remains positive. Short term momentum indicators are overbought and showing early signs of rolling over.

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Platinum gained $18.00 per ounce (1.08%) last week. Intermediate trend is up. Strength relative to gold remains positive.

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Palladium gained $16.20 (2.24%) last week. Intermediate trend is up. Strength relative to gold remains positive

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Copper eased $0.03 per lb. (0.82%) last week. Intermediate trend is up. Copper remains above its 50 and 200 day moving averages, but fell below its 20 day moving average on Friday. Strength relative to the S&P 500 Index changed from neutral to negative. Short term momentum indicators are neutral.

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The TSX Metals & Mining Index eased 8.90 points (0.86%) last week. Intermediate trend is up. Resistance has formed at 1,050.76. The Index remains above its 50 and 200 day moving averages, but fell below its 20 day moving average on Friday. Strength relative to the S&P 500 Index changed from positive to negative. Short term momentum indicators have rolled over from overbought levels.

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Lumber fell $9.34 (2.55%) last week. Intermediate trend is down. Lumber remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative.

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The Grain ETN eased $0.33 (0.61%) last week. Intermediate trend is down. Strength relative to the S&P 500 Index remains neutral.

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The Agriculture ETF added another $1.34 (2.43%) last week. Intermediate trend is up. Units remain above their 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive. Short term momentum indicators are overbought

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Interest Rates

The yield on 10 year Treasuries increased by 10.4 basis points (5.64%) last week. Once again, yield is testing its nine month high. Yield remains above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought.

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Conversely, price of the long term Treasury ETF fell $2.01 (1.67%) last week. Once again, it is testing key support at $117.06

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Other Issues

The VIX added 0.43 (3.45%) last week.

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Fourth quarter earnings reports remain a focus. A total of 147 S&P 500 companies have reported to date: 111 companies reported higher than consensus earning, 1 company was in line and 35 companies reported less than consensus earnings. Year-over-year gain to date is 7.7%, but that figure was skewed by a few companies (e.g. Apple). The energy sector is prominent on the list of companies reporting this week.

Economic focus this week is on two events: the FOMC decision to be released on Wednesday and the employment report on Friday. Both are expected to have a neutral impact on equity markets.

Short and intermediate technical indicators for most equity markets and sectors are overbought, but have yet to show significant signs of peaking.

February has been the second worst performing month for U.S. equity markets during the 1950-2012 periods.

History shows that U.S. equity markets in the year after a Presidential election move higher into January in conjunction with the fourth quarter earnings report season, weaken in February and March (when tough policies are enacted) , move higher into May and close the year at a high. History is repeating in 2013.

Cash and cash equivalents continue to pile up at the corporate level, but corporations are reluctant to commit to capital expansions due to political uncertainties related to the Sequester, U.S. budget, tax reform and the debt ceiling.

 

The Bottom Line

The continuing short term stock market spurt triggered by better than expected fourth quarter results has provided an opportunity to take profits on strength on a wide variety of seasonal trades (e.g. agriculture, technology, semiconductors, biotech) and to rotate into other sectors that have a history of outperformance during the January to April period (e.g. energy, platinum, copper).

Thackray’s 2013 Investment Guide

Thackray’s 2013 Investor’s Guide is here. Order through www.alphamountain.com , Amazon, Chapters or Books on Business.

 

Special Free Services available through www.equityclock.com

Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices.

To login, simply go to http://www.equityclock.com/charts/

Following is an example:

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The latest weekly update on ETFs in Canada to January 25th is available at

http://www.etfinsight.ca/

Tom Rogers’ Weekly Elliott Wave Blog

Following is a link:image

http://www.tomrogers.net/signpost.htm

 

Disclaimer: Comments and opinions offered in this report at www.timingthemarket.ca are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.

Don and Jon Vialoux are research analysts for Horizons Investment Management Inc. All of the views expressed herein are the personal views of the authors and are not necessarily the views of Horizons Investment Management Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by Horizons Investment Management Inc

Horizons Seasonal Rotation ETF HAC January 25th 2013

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·

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22 Responses to “Tech Talk for Monday January 28th 2013”

  1. Nirmal Ghosh Says:

    Hi
    Is anybody interested in SLW-Silver stock?
    DV thinks SILVER is still a good SEASONAL play.
    I am loosing faith in SILVER.
    Any comments?

  2. Tawny Says:

    Nirmal

    I am also losing faith… sold some of my silver holding and put a stop loss under the balance… placed the stop a little under todays low – I hate to be out and watch it move up after I sell. But if it goes lower now I am out and will observe.

  3. Wayne Says:

    Nirmal,
    Since I trade off pivot levels, I was out last Thursday when Silver broke down through 32.13. If it fails to hold at 31.00 – it could head back down to 28.30 where there is some support.
    Although I do pay some attention to seasonal plays, the chart tells me whether it will work this year. It had a nice run from Jan 3 – to the 23rd.
    It’s trading at 39.50 right now and appears to be headed lower.

    Best!

  4. Mavis Says:

    Hi Nirmal:

    I sold USLV and HZU on Thursday and bought DSLV today. All chart signs that I follow are pointing lower for SLV. I’ll switch back to USLV when this changes.

  5. tony Says:

    Nirmal

    I was triggered out of slv on thursday as it broke below its 50MA.

    remember every MA becomes either resistance or support. since price moved above its 50MA it was just natural for me to set it up as support but because it failed my stop was triggered

    slw played out exactly the same way as my slv trade. I sell out and wait til price moves back above the 18MA before renetering the trade at the 50 I would set up a stop just in case we don’t break tru.

  6. Sam Says:

    Hi Tony,
    just so i know how to setup stop loss, did you put set it at the 50MA or at price percentage below it? thanks for the info.

    Sam

  7. Sam Says:

    Hi Tony,
    Re#5 just so i know how to setup stop loss, did you put set it at the 50MA or at price percentage below it? thanks for the info.

    Sam

  8. ch Says:

    Hi Tony,
    Thanks for your prompt response and highly appreciate your explanation and example.
    In the near future if you see some opportunity coming just near or above 18ma, or getting below it, pls let me know then I will see how effective MA is working on the charts. Thanks again with all my heart.

  9. steve Says:

    To Anyone,
    Is anyone speculating on tomorrow’s minor Bradley turning point?

  10. StagDeflation Says:

    Yes. No mention of silver in the Techtalk today. After little skirmish with gold recently, I was hoping Silver would help me out.

  11. tony Says:

    Hi Sam

    there are three ways to set up your stop loss.

    you either set it up according to your risk tolerance. my risk tolerance is between 4 and 6% loss(in general) 10% for levered products.

    you either set it up according to the price movement.
    if you take a company that swings .50 to .70$ per day well in this case you set it up accordingly below the previous days low. so lets say slv low was 30.1 and it moves by .5 avg well at 29.6 you set up your exit

    finally you have stop loss set up according to the MA. the big boys love to play mind games so I set up my trigger below the 50MA I took non round number since the MA was at 30.9 I set it up at 3.89 just so I’m not picked off for the fun of it.

    N.B: stop loss aren’t perfect so if your stop loss failed as price gapped below it, don’t be a fool and hope it will be triggered on the way up. because when it comes back up its often time to go long the move.

    I will recall a march 2012 trade of mine bnp.to I had set up my trade 6% stop loss, One morning my SL wasn’t triggered as price gapped lower I lost 8% on that trade but I didn’t let it run out of reach

  12. Rami/AB Says:

    Hi all,
    Is Suncor reporting after hours?
    Tony do you think its wise to buy it now if its reporting after hours? What does options say? can you tell?

  13. Tawny Says:

    Tony

    Hi! How was your weekend?

    I have been selling partial positions even in my Europe ETFs. Bound to be a pull back soon. What are your thoughts?

  14. tony Says:

    ch

    OK you want a stock that broke below the 18MA, or broke above it to follow.

    here are two 18MA break. slv and tck, I was the owner of these two securities just last week I sold both between thursday and friday I made money on slv but lost some a less the 20 cents/share on tck but being prudent investor as I am I am way better off then the two investors who bought both of my trades, as both are way below my selling point.

    Here is one who is trying to make it back above the 18MA vet.to, it held on the 50MA for support, so you can probably buy it here with a tight stop under the 18MA once it reaches the 50MA you can retry it going long but if it fails to hold. simply make a pass on it.

    BAC tried to break above the 18MA on friday but failed.

    CAT retested the 18MA but popped higher.

    these are suggestions to follow, but there is a myriad of securities to follow it all depends how what sector you like to trade on.

    as

  15. tony Says:

    Rami

    Suncor is simply playing in a trading ranges (Nov-Dec between 32 and 33.5) now 33.5-34.5, I would wait after earnings see how it reacts.

    Options volume is scarce on this name, as they are pegging it at 36$
    I think they are waiting for the results to see if they should go long or short this name.

    you should play the same game as the big boys…wait and see before buying in.

  16. tony Says:

    Tawny

    after the brutal sinus congestion, w-e was ok…

    Ok my toughts on this market, if spx had to break the 1500 mark it would have done so with the same force it used to move from 1430 to 1460, instead in the last 4 trading sessions its been trading between 1490 and 1500. with good volume. don’t you find it odd people are buying and price isn’t bulging…
    I think the easy money has been made, MACD Histogram has been declining since december I think we could see a short term retracement and then we move north.

  17. Tawny Says:

    Tony

    NTR

    Oh dear. I suffer with sinus challenge too from time to time and know what you mean by “brutal”! Personally, I find a neti pot works very well… here is some research, then if you are interested, search out Neti Pots with Google — there are videos on How to Use them.

    ww.webmd.com/allergies/sinus-pain-pressure-11/neti-pots

    A product that has helped me and many others as well is Sinus Busters (this is a spray and has natural ingredients) – search this out on line to and if you want delivery to your door, I can vouch for Well dot ca.

  18. Tawny Says:

    Tony

    Re your market view – I share in your thoughts… Too much struggle to get over this hump and have to consider history that says markets do not do well in Feb… 2nd worse month – if I knew that, I had forgotten . LOL. Oh I do admire those with this kind of memory. Thanks to Don V. keeping us alert.

    Anyway, nobody went broke taking profits..

  19. tony Says:

    Tawny

    NTR

    Last week I got my self the neti, Water flows tru the nostrils but its deeper…

    I also made the purchase of HydraSense with Aloes it helps out

  20. Tawny Says:

    Tony

    NTR
    Well then that is unfortunate with all these weapons you still had the problem!
    Last year I had terrible sinus headaches and I cannot imagine pain that is any worse.
    Somehow, I have been mostly spared this year. Sorry to learn you are having such a problem.

  21. Ana Says:

    http://www.bloomberg.com/news/2013-01-28/toronto-dominion-joins-canadian-lenders-in-moody-s-cut.html

  22. Rami/AB Says:

    Hi All,
    Did Eve stop posting here?
    Rami

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