Tech Talk for Wednesday October 4th 2017

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Pre-opening Comments for Wednesday October 4th

U.S. equity index futures were lower this morning. S&P 500 futures were down 3 points in pre-opening trade.

Index futures were slightly lower following release of the September ADP Private Employment report. Consensus was a drop to 150,000 from 228,000 in August. Actual was 135,000. The impact of hurricanes influenced the report.

Lennar added $0.60 to $55.95 after MKM Partners upgraded the stock to Buy from Neutral.

Republic Services slipped $0.35 to $66.20 and Waste Management dropped $0.28 to $79.00 after Stifel Nicolaus downgraded them from Buy to Hold.

Pepsico dropped $2.38 to $106.85 after reporting less than consensus third quarter sales.

Netflix gained $2.51 to $181.70 after UBS raised its target price to $225 from $190.

Amazon dropped$3.36 to $953.74 after receiving an unexpected tax bill from European authorities

Monsanto gained $0.95 to $120.71 after releasing higher than consensus fiscal fourth quarter earnings

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2017/10/03/stock-market-outlook-for-october-4-2017/

Note seasonality charts on Consumer Staples sector, Utilities sector, Airlines industry, Airline Revenues per Passenger Mile, Amazon, Netflix, Alphabet and TSX Materials Index

Notes used for the BNN appearance on Market Call on Monday

Market Outlook

A word of caution for the next 10 days! This is the time of year when companies issue negative guidance and analyst lower their earnings estimates. Companies have a reason to lower guidance and analysts have a reason to lower estimates this year. Impacts of hurricanes Harvey and Irma currently are being assessed.

Beyond the next 10 days, North American equity markets have a positive outlook. Seasonal influences turn positive in mid-October for the S&P 500 Index and the TSX Composite Index and last until the first week in January. A major reason for strength is positive investor sentiment during the Christmas season. An explanation why seasonal influences are expected to be particularly strong this year will be offered later in the show.

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Top Picks

Currency is a driving force for the top 3 picks. The U.S. Dollar Index dropped to 93 in the third quarter of 2017 from 100 in the fourth quarter of 2016 (7.5%) and 101 in the first quarter of 2017 (8.6%). Companies and sectors that realize a large part of their earnings and revenues from operations outside of the U.S. will benefit substantially from currency conversion alone and will see earnings and revenue gains accelerate. For example, consensus for S&P 500 earnings calls for a 4.2% year-over-year gain in the third quarter followed by an 11.1% gain in the fourth quarter and 10.3% gain in the first quarter of 2018

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1.Dow Jones Industrial Average ETF (DIA)

Approximately 60% of earnings and revenues realized by Dow Jones Industrial Average companies come from international operations. Currency conversion will significantly help fourth quarter 2017 and first quarter 2018 results.

Technical parameters are positive. The Average is in an intermediate uptrend, is outperforming the S&P 500 Index and shows positive momentum.

Seasonal influences are positive from mid-October to the first week in January.

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2. First Trust Technology ETF (FHQ.TO)

Units hold big cap U.S. Technology stocks. Companies realize over 70% of their revenues and earnings from international operations. Units trade in Canadian Dollars and are unhedged.

Technical parameters are positive. Units are in an intermediate uptrend, are outperforming the S&P 500 Index and have positive momentum.

Seasonal influences are positive from the first week in October to the second week in January (just after the Las Vegas Consumer Electronics show).

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3. First Trust Industrial ETF (FHG.TO)

Units hold large cap U.S. Industrial stocks. Companies realize over 60% of their revenues and earnings from international operations. Units trade in Canadian Dollars and are unhedged.

Technical parameters recently turned positive: Trend is up. Strength relative to the S&P 500 Index recently turned positive. Momentum indicators are trending up.

Seasonal influences are positive between the first week in October and the first week in January.

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Observation

Encouraging double bottom pattern completed yesterday by HMMJ on a move above $9.66!

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StockTwits Released Yesterday @EquityClock

Cameco $CCO.CA and Uranium ETF $URA broke support resuming intermediate downtrends.

Editor’s Note: Scotia downgraded Cameco

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Technical action by S&P 500 stocks to 10:10: Bullish. Breakouts: $VFC $AMP $SYF $CMI $PAYX $ALK $SPGI $LUV. Breakdowns: $WBA $VTR $JWN

Editor’s Note: After 10:10 AM EDT, breakouts included PKI and LVLT. No breakdowns.

CI Financial $CIX.CA moved above $27.83 extending an intermediate uptrend.

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Stantec $STN.CA moved above $34.97 extending an intermediate uptrend.

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Airline stocks $XAL lead Dow Jones Transportation Average to all-time high. S&P Industrials also gain.

Editor’s Note: Strength was triggered by favourable news from Delta.

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Trader’s Corner

Daily Seasonal/Technical Equity Trends for October 3rd 2017

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Green: Increase from previous day

Red: Decrease from previous day

 

Daily Seasonal/Technical Commodities Trends for October 3rd 2017

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Green: Increase from previous day

Red: Decrease from previous day

* Excludes adjustment from rollover of futures contracts

 

Daily Seasonal/Technical Sector Trends for October 3rd 2017

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Green: Increase from previous day

Red: Decrease from previous day

 

Disclaimer: Seasonality and technical ratings offered in this report and www.equityclock.com 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

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7 Responses to “Tech Talk for Wednesday October 4th 2017”

  1. Ron/BC Says:

    Here is a chart of ZQQ.to on the $TSX which reflects the Nasdaq 100 and tracks the QQQ quite well. Price topped out in late July just under $46 and bumped up against this price resistance in September and again over the last couple of days. Nice trend up with the rising 20ema above the rising 50ema like a set of train tracks. Price needs to clear $46 to suggest a breakout and then hold above which would project a rally to the $50 level. Meanwhile resistance is resistance but price has chewed away at this resistance numerous times now so hard to say just how much is left to go through. Support is at $44 and more at just under $43 which is also its uptrendline.

    http://stockcharts.com/h-sc/ui?s=ZQQ.TO&p=D&yr=2&mn=0&dy=0&id=p96319410835&a=547454013

  2. polish1 Says:

    SHOP
    getting whacked !
    http://stockcharts.com/h-sc/ui

  3. Mick/NV Says:

    Re:shop

    Regardless of how the technicals are for shop.to, I could never understand why this company is being rated so high, the fundamentals don’t justify the chart, yet since inception the stock is up 317%, 126% ytd, no earnings, negative cash flow, obviously investors or speculators think this company will grow over time, they may be right, will see what happens. Here is the performance chart for the past year

    http://stockcharts.com/h-sc/ui?s=SHOP.TO&p=D&st=2017-01-01&en=today&id=p25641095201

  4. polish1 Says:

    In poker, over time it’s 90% skill and 10% luck. In trading, it’s 90% discipline
    Always determine a stop and a profit objective before entering a trade. Place
    stops based on market information, not your account balance. If a “proper”
    stop is too expensive, don’t do the trade.

  5. Bernie Says:

    Mick/NV,

    Re: #3
    IMO SHOP & TSLA are sentiment driven trading stocks. There’s little fundamental basis to invest in them. Horrors, they don’t even pay dividends so the DGR is 0%. lol.

  6. Paula Says:

    Catching up on posts.
    Thanks Neil/Ab for your #22 yesterday – I wondered what others thought about that.

    Ron/BC, ZQQ.TO is one that I sold way too soon, earlier in the year (along with QQQ on the USD side).

    Re: SHOP: I heard that Andrew Left, a famous American short seller is now targeting Shopify. I looked at this when it was ~ $50 last year but didn’t buy. I thought it was too speculative/risky then! LOL!

    https://www.bloomberg.com/news/articles/2017-10-04/shopify-tumbles-as-citron-calls-company-get-rich-quick-scheme

  7. Sherri Says:

    Ron/BC

    Thanks, Ron. Job is going well but I’m EXHAUSTED. This working for a living is for the birds 🙂 Seriously, the learning curve and long days are going to take a while to get used to but I think I will enjoy it once I’m more confident and have the family trained to pitch in more around the house. I’m working as a Visual Technician for two ophthamologists alongside two others who are very supportive and helpful and great to work with so it will all be good, plus I’ll only be working four days a week eventually. Maybe I’ll even have time to buy a stock here and there! I was going to try this morning BEFORE work, but I just didn’t have enough time……….

    Try to read this blog everyday though. Thanks – happy investing!

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