Tech Talk for Monday November 27th 2017

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Pre-opening Comments for Monday November 27th

U.S. equity index futures were mixed this morning. S&P 500 futures were unchanged in pre-opening trade.

Asian and European equity markets moved lower. Notably lower was the Shanghai Composite Index, down 31 points to 3,323.

Lowe’s added $0.66 to $79.90 after Raymond James upgraded the stock to Outperform from Market Perform.

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2017/11/25/stock-market-outlook-for-november-27-2017/

Note seasonality charts on the Retail industry, Amazon and Canadian Retail Trade

The Bottom Line

Most of the broadly based U.S. equity indices closed at or near all-time highs on Friday. Short term technical indicators moved higher. Seasonal influences for most world equity markets turned positive in mid-October and remain positive until the first week in January. Traditional seasonal sensitive sectors (e.g. Consumer Discretionary, Industrials, Financials and Technology) once again are leading the market higher (notably the FAANG stocks). However, medium term technical indicators for the S&P 500 Index, NASDAQ Composite Index, Dow Jones Industrial Average as well as TSX Composite Index remain overbought and continue to show technical signs of moving lower. Preferred strategy is to take at least partial profits on strength in seasonally attractive sector and industry equities and Exchange Traded Funds with the understanding that their next significant intermediate upside move likely will not resurface until next February.

Earnings Reports This Week

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Economic News This Week

October New Home Sales to be released at 10:00 AM EST on Monday are expected to decline to 625,000 from 667,000 in September

November Consumer Confidence Index to be released at 10:00 AM EST on Tuesday is expected to slip to 124.3 from 125.9 in October

First estimate of third quarter real GDP to be released at 8:30 AM EST on Wednesday is expected to show growth at a 3.3% rate versus growth at a 3.0% rate in the second quarter

Federal Reserve’s Beige Book is released at 2:00 PM EST on Wednesday

October Personal Income to be released at 8:30 AM EST on Thursday is expected to increase 0.3% versus a gain of 0.4% in September. October Personal Spending is expected to increase 0.2% versus a gain of 1.00% in September.

November Chicago PMI to be released at 9:45 AM EST on Thursday is expected to slip to 64.0 from 66.2 in October

Canadian third quarter real GDP to be released at 8:30 AM EST on Friday is expected to show growth at a 1.6% rate versus growth at a 4.5% rate in the second quarter.

Canadian November Employment to be released at 8:30 AM EST on Friday is expected to increase 10,000 versus a gain of 35,300 in October. November Unemployment Rate is expected to slip to 6.2% from 6.3% in October

November Manufacturing ISM to be released at 10:00 AM EST on Friday is expected to slip to 58.3 from 58.7 in October.

October Construction Spending to be released at 10:00 AM EST on Friday is expected to increase 0.5% versus an increase of 0.3% in September

 

Observations

Technical action by individual S&P 500 stocks was quiet last week. Number of stocks breaking resistance totaled 26 while number of stocks breaking support totaled 6. Number of stocks trading in an uptrend increased to 293 from 291, number of stocks trading in a neutral trend was unchanged at 64 and number of stocks in a downtrend slipped to 143 from 145. The Up/Down ratio dropped last week to (293/143=) 2.05 from 2.01.

Economic news this week focuses on the third quarter GDP report on Wednesday and the November ISM report on Friday. Also, the OPEC meeting on Thursday will be watched closely.

Medium term technical indicators (Percent of stocks trading above their 50 day moving average, Bullish Percent Index) remain at intermediate overbought levels and continue to trend down.

Short term technical indicators (short term momentum, above/below 20 day moving average) for equity indices generally moved higher, but are overbought.

Seasonality on a wide variety of equity indices, commodities and sectors began to turn neutral/positive in early October and continues to improve. During the past 20 years, the S&P 500 Index and TSX Composite Index bottomed on average on October 10th. Historically, the month of November has been the strongest month of the year of the S&P 500 Index and TSX Composite and December has been one of the strongest months (mainly during the last two weeks in December).

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Earnings reports continue to trickle in this week. Another 6 S&P 500 companies are scheduled to release fiscal third quarter results. Focus is on the Canadian banks.

The outlook for S&P earnings and revenues remains positive. 98% had reported third quarter results by the end of last week. According to FactSet, third quarter earnings are expected to increase 6.3% (up from 6.2% last week) on a 5.8% increase in revenues (down from 5.9% last week). Fourth quarter earnings are expected to increase 10.0% on a 6.3% increase in revenues (down from 6.4% last week. 67 companies have issued negative fourth quarter guidance and 36 companies have issued positive guidance. For all of 2017, earnings are expected to increase 9.5% on a 6.1% increase in revenues (down from 6.2% last week). First quarter 2018 earnings are expected to increase 10.0% (down from 10.5% last week) on a 6.5% increase in revenues (down from 6.6% last week). Second quarter 2018 earnings are expected to increase 10.2% (up from 10.1% last week) on a 6.3% increase in revenues (down from 6.4% last week).

Short term political uncertainties remain, including 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.

Earnings and revenue 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 and in the first and second quarters 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.

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A word of caution on U.S. equity markets in the short term! When the Relative Strength Index for the Dow Jones Industrial Average moves above 70%, the Average is considered overbought. On Friday October 20th, the Relative Strength Index closed at 88.10%, a level not seen during the past 20 years. On Friday, November 24th the Average had dropped to 62.13%. Historically, a rollover of the Index from near its high level has been followed at best by a flat trend and, more frequently, by a downtrend lasting 3-6 months. Next period of seasonal strength starts at the end of January.

The TSX Composite Index is in a similar position. Its Relative Strength Index touched 80% two weeks ago, the highest level in over a decade. On Friday November 24th it had dropped to 64.51%. This Index also is vulnerable to a flat to downward correction during the next 3-6 months after rolling over.

The time to buy both markets is when their Relative Strength Index is near or below the 30% level and are starting to turn up

Recent tax loss selling pressures in selected sectors is setting up a buying opportunity prior to the second half of December when their period of seasonal strength normally begins. The sectors that have been under the most downside tax loss selling pressures are the energy, oil services and gold sectors.

Oil services ETF (OIH $24.23) is forming a potential reverse Head & Shoulders pattern. The pattern is completed on a move above $26.27

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Gold equity ETFs have been forming base building patterns. GDX at $22.83 recorded a minor breakout on Friday on a move above $23.03 before turning back. XGD on the TSE at $12.20 briefly moved above $12.27 before turning back. GDXJ at $32.18 will complete a base building pattern on a move above $33.02

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Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for November 24th 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 23.59 points (0.91%) last week. The Index closed at an all-time high. Intermediate trend remains up. The Index remains above its 20 day moving average. Short term momentum indicators turned up. Technical score increased last week to 4 from 2.

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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 64.60 from 62.80. Percent remains intermediate overbought and trending down.

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Percent of S&P 500 stocks trading above their 200 day moving average was unchanged last week at 71.20. Percent remains intermediate overbought and trending down.

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Bullish Percent Index for S&P 500 stocks increased last week to73.40 from72.60 and remained above its 20 day moving average. The Index remains intermediate overbought.

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Bullish Percent Index for TSX stocks slipped last week to 67.47 from 67.87 and remained below its 20 day moving average. The Index remains intermediate overbought and trending down.

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TSX Composite Index gained 109.51 points (0.68%) last week. Intermediate trend remains up (Score: 2). Strength relative to the S&P 500 Index remains neutral (Score: 0). The Index remained above its 20 day moving average (Score: 1). Shor term momentum indicators have turned up (Score: 1). Technical score increased last week to 4 from 2.

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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 60.83 from 60.42. Percent remains intermediate overbought and trending down.

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Percent of TSX stocks trading above their 200 day moving average increased last week to 61.67 from 60.42. Percent remains intermediate overbought and trending down.

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Dow Jones Industrial Average gained 199.75 (0.86%) points last week. Intermediate uptrend remains up. Strength relative to the S&P 500 Index remains neutral. The Average moved back above its 20 day moving average. Short term momentum indicators have turned up. Technical score increased last week to 4 from 2.

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Bullish Percent Index for Dow Jones Industrial stocks was unchanged last week at 90.00 and remained above 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 62.63 and moved above its 20 day moving average. The Index remains intermediate overbought.

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NASDAQ Composite Index gained 106.37 points (1.57%) 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 turned higher. Technical score increased last week to 6 from 4.

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The Russell 2000 Index gained 26.34 points (1.76%) last week. Intermediate trend changed to up from down on a move above 1,514.94 to an all-time high. Strength relative to the S&P 500 Index changed to positive from neutral. The Index remained above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 6 from 0.

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Dow Jones Transportation Average gained 137.11 points (1.45%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains negative. The Average remains below its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 0.

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The Australia All Ordinaries Composite Index 18.30 points (0.30%) 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 turned back up. Technical score remained last week at 4.

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The Nikkei Average gained 154.05 points (0.68%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains neutral. The Average remains above its 20 day moving average. Short term momentum indicators have turned up. Technical score increased last week to 4 from 2.

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Europe iShares gained $0.85 (1.83%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index changed to neutral from negative on Friday. Units moved above their 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 0 from -6

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Shanghai Composite Index dropped 29.09 points (0.86%) last week. Intermediate trend changed to neutral from up. Strength relative to the S&P 500 Index has turned down. The Index dropped below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -4 from 0.

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Emerging Market iShares gained $0.89 (1.90%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. Units remain above their 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

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Currencies

The U.S. Dollar Index dropped 0.46 (0.49%) last week. Intermediate trend remains up. The Index remained below its 20 day moving average. Short term momentum indicators are trending down.

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The Euro gained 1.39 (1.18%) last week. Intermediate trend changed to neutral from down on a move above 118.75. The Euro moved above its 20 day moving average. Short term momentum indicators are trending up.

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Canadian Dollar gained US 0.46 cents (0.59%) last week. Intermediate trend remains neutral. The Canuck Buck moved back above its 20 day moving average. Short term momentum indicators have turned up.

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The Japanese Yen gained 0.47 (0.53%) last week. Intermediate trend remains up. The Yen remains above its 20 day moving average Short term momentum indicators are trending up.

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British Pound gained 1.15 (0.87%) last week. Intermediate trend remains up. The Pound remains above its 20 day moving average. Short term momentum indicators are trending up.

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Commodities and Related ETFs

Daily Seasonal/Technical Commodities Trends for November 24th 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 added 1.83 points (0.96%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains neutral. The Index remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 4 from 2.

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Gasoline added 4 cents per gallon (2.23%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains neutral. Gas moved 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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Crude Oil gained $2.24 per barrel (3.955) last week. Intermediate uptrend was confirmed on a move above $57.92. Strength relative to the S&P 500 Index remains positive. Crude remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 6 from 4.

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S&P Energy Index added 3.61 points (0.72%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains negative. The Index remains below its 20 day moving average. Short term momentum indicators have turned up. Technical score increased last week to 0 from -2.

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Philadelphia Oil Services Index added 0.33 (0.25%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index remained neutral. The Index remained below its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 0 from -2.

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Gold slipped $9.20 per ounce (0.71%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to neutral from positive. Gold remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score slipped last week to 4 from 6.

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Silver lost $0.38 per ounce (2.19%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index changed to neutral from positive. Silver slipped below its 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score dropped last week to 0 from 4.

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The AMEX Gold Bug Index added $0.29 (0.15%) last week. Intermediate trend remain down. Strength relative to the S&P 500 Index remains neutral. The Index moved above its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to 2 from -1.

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Platinum slipped $9.30 per ounce (0.98%) last week. Trend remains up. Relative strength is neutral. Remained above its 20 day MA. Momentum is up. Score slipped to 4.

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Palladium added $0.80 per ounce (0.08%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. PALL remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased to 6 from 4.

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Copper gained $0.10 per lb. (3.26%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index changed to neutral from negative. Copper moved above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 0 from -6.

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BMO Base Metals ETF gained $0.36 (3.13%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains negative. Units moved above their 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to -2 from -6.

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Lumber dropped $19.00 (4.32%) last week. Trend remains up. Relative strength changed to negative. Lumber dropped below its 20 day MA. Momentum is down. Score dropped to -2

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The Grain ETN dropped $0.23 (0.91%) last week. Trend remains down. Relative strength remains negative. Units remained below their 20 MA. Momentum has turned up. Score:-4

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The Agriculture ETF gained $1.32 (2.22%) last week. Intermediate uptrend was confirmed on a move above $60.65. Strength relative to the S&P 500 Index turned positive. Units moved above their 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 6 from -2.

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Interest Rates

Yield on 10 year Treasuries slipped 1.4 basis points (0.59%) last week. Intermediate trend remains up. Yield dropped below its 20 day moving average. Short term momentum indicators are trending down.

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Conversely, price of the long term Treasury ETF gained $0.41 (0.32%) last week. Intermediate trend remains up. Price moved above its 20 day moving average. Short term momentum indicators are trending up.

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Volatility

The VIX Index plunged 1.78 to 9.65 (15.57%) last week to a 10 year low. Intermediate trend is down. The Index remains below its 20 day moving average. Short term momentum indicators are trending down.

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Sectors

Daily Seasonal/Technical Sector Trends for November 24th 2017

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Green: Increase from previous day

Red: Decrease from previous day

StockTwits Released on Friday @EquityClock

MSCI EAFE iShares $EFA moved above $70.00 to all-time high extending an intermediate uptrend.

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TSX Gold ETF $XGD.CA moved above $12.27 completing a base building pattern.

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Gold Miners ETF $GDX moved above $23.03 completing a base building pattern.

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Technical action by S&P 500 stocks to 10:15: Quiet. No breakouts. Breakdown: $SIG

Editor’s Note: After 10:15 AM EST, breakout included FB and AVGO and breakdown included IT.

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Facebook $FB, one of the FAANG stocks moved above $182.90 to all-time high extending an intermediate uptrend.

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Wheat ETN $WEAT moved below $6.13 to all-time low extending an intermediate downtrend. Bad for Ag stocks!

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US Natural Gas ETN $UNG moved below $5.86 to 20 month low extending an intermediate downtrend. Bad for gassy stocks

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Disclaimer: Seasonality and technical ratings offered in this report and at

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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15 Responses to “Tech Talk for Monday November 27th 2017”

  1. Larry/ON Says:

    Bitcoin – A construction worker doing a job for me gave me a hot tip. He got together with his friend to buy some Bitcoin. Does this story sound familiar? Consult the shoeshine boy and he may give you the same tip.

  2. Larry/ON Says:

    To add : Bitcoin is the first stock he ever owned in his life.

  3. Larry/ON Says:

    I mean the first financial instrument he ever owned (not really a stock is it)

  4. rick Says:

    Larry/ON ,

    You are correct but is fun to watch !

    I will not agree with bitcoin = tulip just because there is an unlimited supply of tulips and only a limited supply of bitcoin . That is a big difference .

    The big question with bitcoin is how many people are using it today and how many will use it in 10 years from now .
    That is similar with : how many people used amazon 10 years ago and how many people use amazon today .

    Maybe ( only maybe ) bitcoin will be like amazon or not .

    Why we don’t look to marijuana stocks ?
    Huge capital gains and is not even legal.
    At least is a plant like tulips .

    The bottom line is this :
    IF bitcoin will not be used by new generation than bitcoin will go down big time .
    And the reverse is true : IF will be used will go up .

    We should ask college students if they are using or planning to use bitcoin (not marijuana)

  5. Ron/BC Says:

    Here is a chart of the energy stocks on the $TSX with $WTIC overlaid in blue. Oil is selling off sharply today down around one dollar to roughly $58. Note the XEG.to Energy ETF and how with sharply rising Oil prices since June this ETF topped out in early November and has been falling sharply ever since and breaking its 3 month uptrendline. Also see the above ratio chart of XEG.to:$WTIC and note the steady downtrend and breakdown in this ratio showing the relative weakness in the Energy stocks. The C.O.T. report has shown extreme bullish speculation on Oil for some time now. And typically when all the speculators are on one side of the boat,the boat tips over. The key for $WTIC strength will be if it can hold above the $55 breakout point or not which is also its 3 month uptrendline. The big OPEC/Russian Oil meeting later this week should have some effect on prices.

    http://stockcharts.com/h-sc/ui?s=XEG.TO&p=D&yr=1&mn=0&dy=0&id=p55306365428&a=531757458

    http://stockcharts.com/h-sc/ui?s=%24WTIC&p=D&yr=3&mn=0&dy=0&id=p33119643468&a=532354817

  6. Bernie Says:

    Rick & Tawny,

    Are you playing the seasonal U.S. Mid cap strategy again this time?

  7. rick Says:

    Bernie ,

    I tried to play seasonality with TQQQ with TFSA money .(those 5500 $ for 2017 )
    I had a limit buy order at 100 in September .
    Never get filled because no correction in September – October period .
    Now is 140 .
    Maybe next year .
    My favorite indicator for buys is $SPXA50R .
    It was around 45 In August so I was hoping for under 30 In September -October .

  8. roy Says:

    Ron/BC – Great call on Square. Thanks

  9. rick Says:

    Regarding QE unwind , watch this 5 minutes video ( especially the last minute )

    https://youtu.be/jp9XtnvsPH4

    If FED will put less and less pressure on buying bonds = probably the price for long term bonds will go down (TLT) and the yield will go up .
    The yield curve will be more steep and will stimulate the economy and stocks .

    Plus the money will come out from bonds and will move in stocks .
    Or maybe smart money already did this move ( stocks are up nicely this year )and next year will be a usual year = volatility will be back to 20 )

    ( consider the mantra : don’t fight the FED and don’t buy bonds when FED is not buying or is buying less and less )
    In December FED will let to expire and NOT buying new bonds in value of 10 Billions (minute 4.43 in video )
    In December 2018 that amount will jump to 50 Billions (minute 4.49 in video )

    But there is no guarantee that TLT will go down .
    In August 2011 Bill Gross (” the bond guru “) short TLT (S&P just downgraded US Bonds)
    But surprise , surprise = bonds were going up ( European crisis )
    Pimco and Bill Gross lost a huge amount of money .
    Big upset = big fight = Bill Gross was fired or he quit .

  10. Ron/BC Says:

    Rick
    Re:#7
    Here is the 2 year Daily $SPXA50R chart with the $SPX overlaid in blue. What do you look for with this index for your buys???

    http://stockcharts.com/h-sc/ui?s=%24SPXA50R&p=D&yr=2&mn=0&dy=0&id=p87404193825&a=417562457

  11. bruce Says:

    sherri

    Any chance of getting Armstrongs latest “Dow and November” ?

  12. rick Says:

    Ron/BC

    $spxa50r = percentage of stocks from S&P above their 50 day moving average = in uptrend

    I add a 10 day SMA .
    when the 10SMA is turning up is a good signal that the market is turning up too for maybe a few months .

    Lower the number ( and the SMA ) = better signal that the sell-off is close to be over .
    I am trying not to buy when this number is above 30 .

    Buffet = buy when nobody is buying = when $spxa50r is low

    In a way is similar with RSI but RSI is related to price and this is related with trend (50 day moving average )so is a slower-later indicator .

    Better to buy when this indicator is under 30 than above 70

  13. Ron/BC Says:

    Rick
    Does this look like what you look for?

    http://stockcharts.com/h-sc/ui?s=%24SPXA50R&p=D&yr=2&mn=0&dy=0&id=p99265627140&a=417562457

  14. Sherri Says:

    Armstrong

    “The DOW made a new high today but is crawling higher against our second target resistance we gave back in 2010 which was 23,700. To be precise, that resistance this week stands at 23,770.39-23,776.30. This is primarily the closing resistance barrier. There is some intraday resistance slightly higher at 23,899.71. The breakout resistance stands at 24,148.06. In other words, that is the point where the market could break-through and begin to run.

    There has been a steady inflow of European capital that according to our sources reflects the deep concern over the political crisis in Germany. The SPD may yield fearing that they will lose even more power to the rising AfD. That is the best hope to keep Merkel in play and that is the entire support behind the Euro. The smart money sees the handwriting on the wall with the Italian elections coming up. Then there is the crisis in the budget developing in Spain. All of this puts pressure on capital asset flows, and it is also starting to weigh heavily of fixed assets like real estate. The high-end market is coming under pressure just about everywhere.

    We must be careful here for this week is the turning point and a Directional Change. With the ECM turning on the weekend targeting really the fixed asset class, caution is duly advisable at this time. The Directional Changes on a daily level begin to come in on Wednesday and peak on Thursday 30th. The highest daily closing remains last week, created on the 21st.

    Support lies at 23500. A daily closing below that will signal that a retest of support is likely. A weekly closing below 23250 now will signal a correction is unfolding. The major support lies at the 20990 area and only a crack of that level on a monthly closing basis will signal a more sustained correction is at hand.

    Using our long-term database for the Dow back to 1790, we see 2018 as a Panic Cycle Target year. Clearly, only a December closing below 19987 would warn of a major sharp correction in early 2018, which would then probably flip back up going into the end of 2018. Our models are showing that 2018 is the start of real chaos, which should extend then into 2022.”

  15. Bernie Says:

    rick,

    Re: #7
    Thanks. I decided to buy some XMC.TO for my wife’s RRSP on Nov 3rd as per the U.S. mid cap seasonal trade (Nov to May).

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