Tech Talk for Tuesday October 10th 2017

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Pre-opening Comments for Tuesday October 10th

U.S. equity index futures were higher this morning. S&P 500 futures gained 4 points in pre-opening trade.

WTI Crude Oil gained $0.52 to$50.20 per barrel after Saudi Arabia announced plans to reduce oil production.

Wal-Mart gained $2.02 to $82.55 after raising sales and earnings guidance and after announcing a new $20 billion share buyback program.

Honeywell added $0.96 to $144.56 after announcing plans to spin off two divisions into publicly trading companies.

Jabil Circuit dropped $1.08 to $28.40 after Goldman Sachs lowered its rating to Sell from Neutral.

Eli Lilly fell $3.03 to $84.02 after Credit Suisse dropped its rating to Neutral from Outperform.

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2017/10/09/stock-market-outlook-for-october-10-2017/

Note seasonality chart on the Technology sector.

StockTwits released yesterday @EquityClock

Natural gas ETN $UNG moved below $6.20 extending an intermediate downtrend.

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Tech action by S&P 500 stocks to 10:00: Mixed. Breakouts: $XYL, MCHP $AWK $FB. Breakdowns: $VIAB $SJM $ESRX $ATVI $DVA $ABC $HCA.

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Editor’s Note: After 10.00 AM EDT, breakout included GPN. Breakdowns included BBBY, UHS, SYMC and GE

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Another Milestone

Over the weekend, number of StockTwits followers exceeded 43,000. Previous milestone at 42,000 followers was reached on September 13th

WALL STREET RAW RADIO WITH HOST, MARK LEIBOVIT – SATURDAY – OCTOBER 7, 2017:

GUESTS INCLUDE DON VIALOUX, SINCLAIR NOE, HARRY BOXER, HENRY WEINGARTEN AND KYLE DENNIS.

http://tinyurl.com/y9cqhezf

 

The Bottom Line

Equity markets continue to climb a “wall of worry”. Technical parameters are overbought, but have yet to show signs of rolling over. Seasonally based on the past 20 years, today is the bottom for the S&P 500 Index and TSX Composite (See charts below). Seasonal influences turn positive, particularly for economic sensitive sectors (e.g. Materials, Industrials, Financials, Technology). Preferred strategy is to accumulate favoured equities and ETFs on weakness.

 

Economic News This Week

Canadian September Housing Starts to be released at 8:15 AM EDT on Tuesday are expected to slip to 215,000 from 223,000 in August.

FOMC Meeting Minutes are released at 2:00 PM EDT on Wednesday

September Producer Prices to be released at 8:30 AM EDT on Thursday are expected to increase 0.4% versus a gain of 0.2% in August. Excluding food and energy, September Producer Prices are expected to increase 0.2% versus a gain of 0.1% in August.

September Consumer Prices to be released at 8:30 AM EDT on Friday are expected to increase0.6% versus a gain of 0.4% in August. Excluding food and energy, September Consumer Prices are expected to increase 0.2% versus a gain of 0.2% in August.

September Retail Sales to be launched at 8:30 AM EDT on Friday are expected to increase 1.4% versus a decline of 0.2% in August. Excluding auto sales, September Retail Sales are expected to increase 0.4% versus a decline of 0.1% in August.

August Business Inventories to be released at 10:00 AM EDT on Friday are expected to increase 0.6% versus a gain of 0.2% in July.

October Consumer Sentiment to be released at 10:00 AM EDT on Friday is expected to increase to 95.5 from 95.1 in September.

 

Earning News This Week

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Observations

Technical action by individual S&P 500 stocks was bullish last week. Notable among stocks breaking resistance were Energy and Financial stocks. Notable among stocks breaking support were Consumer Staple stocks. Number of stocks breaking resistance totaled 52 while number of stocks breaking support totaled 9. Number of stocks trading in an uptrend increased to 286 from 260, number of stocks trading in a neutral trend dropped to 85 from 93 and number of stocks in a downtrend decreased to 129 from 147. The Up/Down ratio increased last week to (286/129=) 2.22 from 1.77.

Medium term technical indicators (Percent of stocks trading above their 50 day moving average, Bullish Percent Index) remain at intermediate overbought levels, but have yet to show signs of rolling over

Short term technical indicators (short term momentum, above/below 20 day moving average) mostly moved higher last week to overbought levels, but have yet to show signs of rolling over.

Technical parameters show increasing evidence of a bottom in the U.S. Dollar Index and a top in other major world currencies (including the Canadian Dollar).

Seasonality on a wide variety of equity indices, commodities and sectors begin to turn to neutral/positive beginning early in October and continue to improve to the end of October. During the past 20 years, the S&P 500 Index and TSX Composite Index normally bottom today (October 10th). See updated ratings for markets, commodities and sectors below.

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Focus on U.S. economic news this week is on inflation. September Producer Prices and September Consumer Prices are expected to show accelerating gains.

Earnings reports this week will focus on third quarter results from major U.S. Banks. Twelve S&P 500 companies are scheduled to release fiscal third quarter results including one Dow Industrial company: JP Morgan.

The outlook for S&P earnings and revenues remains positive (albeit at a slower growth rate). 76 companies have issued negative third quarter guidance and 42 companies have issued positive guidance. According to FactSet, third quarter earnings are expected to increase 2.8% (down from 4.2% last week) on a 4.9% increase in revenues (down from 5.0%. Fourth quarter earnings are expected to increase 11.1% (down from 11.2%) on a 5.7% increase in revenues. For all of 2017, earnings are expected to increase 9.2% (down from 9.6%) on a 5.7% increase in revenues. First quarter 2018 earnings are expected to increase 10.5% on a 6.1% increase in revenues. Second quarter 2018 earnings are expected to increase 10.3% on a 5.9% increase in revenues.

Short term uncertainties remain, including assessment of impact of three hurricanes (including Hurricane Nate) on the U.S. economy, North Korean “sabre rattling”, slow progress by Congress to pass crucial legislation (notably tax reform) and increased scrutiny by special council on Russia’s influence on the Presidential election.

Prospects beyond the third quarter report season are exceptional for U.S. based companies with international exposure. Consensus for S&P 500 earnings on a year-over-year are expected to exceed 10% in the fourth quarter of 2017, first quarter of 2018 and second quarter of 2018. Earnings will benefit significantly from weakness in the U.S. Dollar on a year-over-year basis when revenues and earnings from international operations will benefit from higher valued foreign currencies. The U.S. Dollar Index averaged 100 in the fourth quarter of 2016 and 101 in the first quarter of 2017. If the U.S. Dollar Index currently near 94 maintains that average in the fourth quarter of 2017, revenues and earnings from international operations will be boosted from currency alone by 7.5% in the fourth quarter of 2016 and by 8.6% in the first quarter of 2018.

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Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for October 6th 2017

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Green: Increase from previous day

Red: Decrease from previous day

 

Calculating Technical Scores

Technical scores are calculated as follows:

 

Intermediate Uptrend based on at least 20 trading days: Score 2

          Higher highs and higher lows

Intermediate Neutral trend: Score 0

          Not up or down

Intermediate Downtrend: Score -2

          Lower highs and lower lows

Outperformance relative to the S&P 500 Index: Score: 2

Neutral Performance relative to the S&P 500 Index: 0

Underperformance relative to the S&P 500 Index: Score –2

Above 20 day moving average: Score 1

At 20 day moving average: Score: 0

Below 20 day moving average: –1

Up trending momentum indicators (Daily Stochastics, RSI and MACD): 1

Mixed momentum indicators: 0

Down trending momentum indicators: –1

Technical scores range from -6 to +6. Technical buy signals based on the above guidelines start when a security advances to at least 0.0, but preferably 2.0 or higher. Technical sell/short signals start when a security descends to 0, but preferably -2.0 or lower.

Long positions require maintaining a technical score of -2.0 or higher. Conversely, a short position requires maintaining a technical score of +2.0 or lower.

The S&P 500 Index gained another 29.97 points (1.19%) last week to an all-time high. Intermediate trend remains up. The Index remains above its 20 day moving average. Short term momentum indicators are trending up.

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Percent of S&P 500 stocks trading above their 50 day moving average (Also known as the S&P 500 Momentum Barometer) increased last week to 75.00 from 68.20. 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 74.00 from 73.80. Percent remains intermediate overbought.

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Bullish Percent Index for S&P 500 stocks increased last week to 72.60 from 70.60 and remained above its 20 day moving average. The Index remains intermediate overbought.

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Bullish Percent Index for TSX stocks increased last week to 64.11 from 63.71 and remained above its 20 day moving average. The Index remains intermediate overbought.

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TSX Composite Index gained 93.38 points (0.60%) last week. Intermediate trend remains up (Score: 2). Strength relative to the S&P 500 Index remains Positive (Score: 2). The Index remains above its 20 day moving average (Score: 1). Short term momentum indicators are trending up (Score: 1). Technical score remained last week at 6.

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Percent of TSX stocks trading above their 50 day moving average (Also known as the TSX Momentum Barometer) increased last week to 79.01 from 69.83. Percent remains intermediate overbought.

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Percent of TSX stocks trading above their 200 day moving average increased last week to 60.91 from 57.44. Percent remains intermediate overbought.

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Dow Jones Industrial Average gained 368.58 points (1.65%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. The Average remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

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Bullish Percent Index for Dow Jones Industrial stocks was unchanged last week at 76.67, but fell below its 20 day moving average. The Index remains intermediate overbought.

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Bullish Percent Index for NASDAQ Composite stocks increased last week to 64.89 from 62.88 and remained above its 20 day moving average. The Index remains intermediate overbought.

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NASDAQ Composite Index added 94.22 points (1.45%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Positive from Negative. The Index remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 6 from 2.

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Russell 2000 Index gained 19.37 points (1.30%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. The Index remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

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Dow Jones Transportation Average slipped 27.47 points (0.28%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. The Average remains above its 20 day moving average. Short term momentum indicators have just turned down. Technical score dropped last week to 4 from 6.

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Australia All Ordinaries Composite Index added 32.50 points (0.56%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Negative. The Index moved above its 20 day moving average on Friday. Short term momentum indicators have turned up. Technical score increased last week to -2 from -6.

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The Nikkei Average gained 334.43 points (1.64%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. The Average remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week at 6 from 4.

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Europe iShares slipped $0.12 (0.26%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Negative from Positive. Units remain above their 20 day moving average. Short term momentum indicators have turned down. Technical score dropped last week to 0 from 4.

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The Shanghai Composite Index was unchanged last week. Markets were closed for Golden Week. Technical score remained at -2.

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Emerging Markets iShares added $0.82 (1.83%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Neutral from Negative. Units moved back above their 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to 4 from -2.

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Currencies

The U.S. Dollar gained 0.76 (0.82%) last week. Intermediate trend changed to Neutral from Down on Friday on a move above 94.06. The Dollar remained above its 20 day moving average. Short term momentum indicators are trending up.

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The Euro dropped 0.88 (0.74%) last week. Intermediate trend changed on Friday from Up to Neutral on a move below 116.82. The Euro remained below its 20 day moving average. Short term momentum indicators are trending down.

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The Canadian Dollar dropped US 0.41 to 79.74 cents last week. Intermediate trend remains up. The Canuck Buck remains below its 20 day moving average. Short term momentum indicators are trending down.

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The Japanese Yen fell 0.10 (0.11%) last week. Intermediate trend remains up. The Yen remained below its 20 day moving average. Short term momentum indicators are trending down.

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British Pound dropped 3.31 (2.47%) last week. Intermediate trend remains up. The Pound remained below its 20 day moving average. Short term momentum indicators are trending down.

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Commodities and Related ETFs

Daily Seasonal/Technical Commodities Trends for October 6th 2017

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Green: Increase from previous day

Red: Decrease from previous day

* Excludes adjustment from rollover of futures contracts

 

The CRB Index dropped 2.14 points (1.17%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Negative from Neutral. The Index moved below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -2 from 2.

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Gasoline dropped 3.2 cents per gallon (2.01%) last week. Intermediate trend changed to down from up on a move below 1.5828. Strength relative to the S&P 500 Index remains Negative. Gas remains below its 20 day moving average. Short term momentum indicators turned back down on Friday. Technical score dropped last week to -6 from -2.

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Crude Oil dropped $2.38 per barrel (4.61%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Negative from Positive. Crude dropped below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -2 from 4

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Natural Gas dropped $0.15 per MBtu (5.00%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained Negative. “Natty” remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at -2.

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S&P Energy Index slipped 2.93 points (0.58%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Neutral from Positive. The Index remains above its 20 day moving average. Short term momentum indicators have just turned down. Technical score dropped last week to 2 from 6.

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Philadelphia Oil Services Index dropped 3.84 points (2.70%) last week. Intermediate trend remains Neutral. Strength relative to the S&P 500 Index changed to Neutral from Positive. The Index remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to 0 from 4.

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Gold dropped $9.90 per ounce (0.77%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Negative. Gold remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at -2.

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Silver added $0.11 per ounce (0.66%) last week. Intermediate trend changed to Neutral from Up. Strength relative to the S&P 500 Index remains Negative. Silver remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -4 from -2.

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AMEX Gold Bug Index added 5.60 points (2.85%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Negative. The Index moved above its 20 day moving average on Friday. Short term momentum indicators have turned up. Technical score increased last week to 2 from -2.

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Platinum added $1.40 per ounce (0.15%) last week. Trend remains Neutral. Relative strength remains Negative. PLAT remains below its 20 day MA. Momentum remains down.

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Palladium dropped $17.85 per ounce (1.91%) last week. Trend remains up. Relative strength remains Negative. PALL dropped backed below its 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score remained last week at 0.

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Copper gained $0.08 per lb. (2.71%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Neutral from Negative. Copper moved back above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 4 from 0.

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BMO Base Metal ETF gained $0.63 (5.54%) last week. Intermediate uptrend was confirmed on a move above $12.00. Strength relative to the S&P 500 Index changed to Positive from Negative. Units moved above their 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to6 from 0.

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Lumber added 9.90 (2.46%) last week. Trend remains up. Relative strength remains Positive. Remains above its 20 day MA. Momentum remains up. Score remains at 6.

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Grain ETN slipped $0.24 (0.93%) last week. Intermediate trend remains up. Relative strength changed to Negative from Neutral. Units dropped below their 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -2 from 4.

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Agriculture ETF added $0.07 (0.12%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Negative from Positive. Units remain above their 20 day moving average. Short term momentum indicators are trending up. Technical score slipped last week to 2 from 4.

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Interest Rates

Yield on 10 Year Treasuries increased last week by another 4.4 basis points (1.89%) last week. Intermediate trend changed on Friday to Neutral from Down on a move above 2.396%. Yield remains above its 20 day moving average. Short term momentum indicators are trending up.

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Price of the long term Treasury ETF dropped $1.17 (0.94%) last week. Intermediate trend remains up. Units remained below their 20 day moving average. Short term momentum indicators are trending down.

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Volatility

The VIX index added 0.04 (0.42%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average.

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Sectors

Daily Seasonal/Technical Sector Trends for October 6th 2017

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Green: Increase from previous day

Red: Decrease from previous day

 

StockTwits Released on Friday @EquityClock

U.S Dollar Index ETF $UUP moved above $24.39 setting a new intermediate trend.

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Selected precious metal stocks break support setting new intermediate downtrends: $YRI.CA $PAAS.

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Medical Devices iShares $IHI moved above $170.60 extending an intermediate uptrend.

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Technical action by S&P 500 stocks to 10:00: Bullish. Breakouts: $FAST $IR $MSI $LNC. Breakdown: $O

 

Editor’s Note: After 10:00 AM EDT, breakouts included BBY, ADSK, QCOM, PPG and A. Breakdowns included COG, CVS and WBA.

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Another Canadian “gassy” stock breaks support extending an intermediate downtrend. $BIR.CA moved below $5.31.

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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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13 Responses to “Tech Talk for Tuesday October 10th 2017”

  1. Mick/NV Says:

    was having a look at atd/b.to this morning, this is a stock that has done really well the past 5 years up around 260%, this year though it is down about 2.5%. Moved above the main pivot point last week and holding, not sure whether it has much upside , maybe around $60. I have looked at this in the past to buy, my loss for not doing so. If i was paying attention looks like it would have been a good pickup at the end of sept, now with metro(mru.to) possibly selling all it’s shares of atd/b.to and hurricane issues in the southern states, might have to wait again to purchase, more pressure on the stock price. Not much of a yield at around .6% but the dividend has increased each year for the past 7, which is a good sign.

    http://stockcharts.com/h-sc/ui?s=ATD%2FB.TO&p=D&b=5&g=0&id=p69625320453&a=529931874

  2. Mick/NV Says:

    WMT gapped up above the R2 pivot point resistance this morning in what appears to be an all time high. Not sure whether this will hold during the week as the jump made WMT overbought, might be some selling to cash in on the gains. Have owned a small amount of shares for awhile unsure at the moment whether I will also take advantage of the run up, which I don’t normally do. I do expect this gap to be covered sometime in the next few weeks.

    http://stockcharts.com/h-sc/ui?s=WMT&p=D&b=5&g=0&id=p14674586597&a=549500361

  3. bruce Says:

    Hi Sherri
    Armstrong has another Dow update if you wouldn’t mind sharing it with us……tu……

  4. Polish1 Says:

    http://stockcharts.com/h-sc/ui
    very nice move for QCOM

  5. NRG Says:

    Mick/NV

    ATD.B I sold this am for the above reasons. Was not going to pay me much in dividends in the long run. Made good profit on this one as I owned for 4 years. Took the proceeds and bought TOY Spinmaster. Was waiting to buy on a pull back but I read an article this weekend on their hatchimals toy which was best seller last year for Christmas. They have a new hatchimals toy again this year with two in each shell which communicate with each other. The writer predicted another sell out again this Christmas.

    WMT Walmart buying back 2 billion in shares so stock up this am.

  6. roy Says:

    dutchcanuck
    nice move by SIS.TO

  7. dutchcanuck Says:

    atd/b is a co with a rollup strategy. They are now so big that they need to take over bigger and bigger cos. The momentum has gone out of the stock and internal growth is minimal. Dollarama may be a better idea. Own neither.

    For those interested in Photon Control: Good interview on their website with Mark Bunting and the CEO. Own lots.

  8. Mick/NV Says:

    NRG

    I sold my small holdings of WMT at $84.51, don’t know if I will repurchase at a lower price if that happens

  9. Neil/Ab Says:

    Roy
    SIS.t
    Yes, nice move today, don’t know why. Seems some of the smaller guys are starting to catch a bid here and there. I pared back my SIS in June when it began rolling over but still kept a goodly amount. Haven’t added since. I do note that with today’s action it has hit a pretty significant band of resistance so could be interesting over the next few days to see how that resolves. Unless there is some very good reason for today’s move, I would expect it to drift back lower from this resistance point.

  10. Neil/Ab Says:

    Portfolio trackers:
    I have been using Google finance portfolio to track my stocks. It is a bit cumbersome but it is free and seems to do a relatively good job in a very basic way. Anyway, apparently the service will be discontinued mid-November. Just wondering if anyone out there has found a decent free portfolio tracker? I know I could use my TDW but I’m not ‘secure’ during the days so prefer not to log in there. ” Paranoia strikes deep” as the Buffalo Springfield once wrote. Any thoughts would be appreciated.

  11. Paula Says:

    Neil/Ab,
    Here is a link to Globe Investor. You can register for free to get a login and create a watch list that will track your portfolio. I have this from a long time ago but don’t actively use it. I think it might work for what you want to do. They do have a premium version if you want to spend money…

    https://www.theglobeandmail.com/globe-investor/my-watchlist/

  12. Sherri Says:

    Armstrong Dow & Oct 11 update:

    “The 8.6 Year wave calculation from the 2009 low brings us to the 11th of October, 2017. This is by no means a major all time high. It is merely the place where we can see a temporary pause. So far, this has been like a party where everyone is drunk but nobody had a good time and they cannot even remember what has happened.

    We can see that the last turning point provided a temporary low, not a major low. So we have the same potential this time – just a pause.

    We still see this week as a target for a turning point and the Panic Cycle is turning up. A break now of yesterday’s low will signal that we can see a drop unfold so be careful at this time.

    If this pans out and a high forms today of this week, then a move down into December is possible, with a move thereafter back into February.”

    Remember, the charts/graphs are missing from this commentary or it would make more sense. Hi Kam! 😉

  13. Bernie Says:

    Neil/AB,

    Re: #10 Portfolio Tracker
    I don’t use an on-line tracker other than what’s available on BMO InvestorLine. I prefer to keep my own manual spreadsheets. That said, I heard there were a lot of good tools on the TMX Money site. Perhaps check them out. Here’s a link:
    https://web.tmxmoney.com/account/portfolio.php

    If its any decent lets us know.

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