Tech Talk for Thursday December 7th 2017

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Pre-opening Comments for Thursday December 7th

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

Index futures were virtually unchanged following release of the Weekly Jobless Claims report at 8:30 AM EST. Consensus was 240,000 versus 238,000 last week. Actual was 236,000.

Lululemon gained $6.05 to $73.71 after reporting higher than consensus quarterly sales and earnings. Oppenheimer, RBC Capital, Stifel Nicolaus, MKM Partners, JP Morgan, SunTrust, Wells Fargo and Susquehanna raised their target price on the stock.

Dollar General added $4.21 to $95.06 after reporting higher than consensus third quarter sales and earnings.

Nike (NKE $59.71) is expected to open higher after Cowen raised its target to $64 from $55.

Home Depot added $0.20 to $181.00 after RBC Capital increased its target price to $195 from $186.

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2017/12/06/stock-market-outlook-for-december-7-2017/

Note seasonality charts on Consumer Staples, S&P 500 Equal Weight Index, Crude Oil Days of Supply, Gasoline Days of Supply, Crude Oil, Cotton futures and Corn futures

Observations

CRB Index moved below 180.03 completing a double top pattern. The breakdown is unusual at this time of year. Seasonal influence for commodities normally bottom at this time of year (particularly in the energy sector).

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Lower metal prices (precious and base metals) were the greatest contributor to weakness in the CRB Index

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The CRB Index is responding partially to concerns about a slowdown in economic growth in China.

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StockTwits Released Yesterday @EquityClock

More precious metal stocks breaking intermediate support: $YRI.CA $K.CA $PAAS

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Gasoline production and supply returning to seasonal average levels going into colder winter months. $UGA $RB_F #Oil

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Canadian Consumer Goods exports showing weakest calendar year performance on record. http://www.equityclock.com/2017/12/05/stock-market-outlook-for-december-6-2017/ $STUDY

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Hudson’s Bay Company $HBC.CA moved below $10.77 on larger loss extending an intermediate downtrend.

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Power Financial $PWF.CA, a TSX 60 stock moved below $35.08 completing a double top pattern.

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Technical action by S&P 500 stocks to 10:10: Quietly bearish. Breakout: $HRB. Breakdowns: $XEC $AVGO $AVB

Editor’s Note: After 10:10 AM EST, breakout included COTY and breakdowns included SYMC and APC

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Emerging Markets iShares $EEM moved below $45.43 and $45.45 setting intermediate downtrend.

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West Fraser Timber $WFT.CA moved below $76.88 completing a double top pattern.

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Platinum ETN $PPLT moved below $86.40 resuming an intermediate downtrend

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Bank of Montreal $BMO.CA, a TSX 60 stock moved above $100.32 extending an intermediate uptrend.

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TransAlta $TA.CA moved above $7.92 extending an intermediate uptrend.

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ARC Resources $ARX.CA, a TSX 60 stock moved below $14.91 extending an intermediate downtrend.

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Crescent Point Energy $CPG.CA moved below support at $8.90 changing trend.

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Trader’s Corner

Daily Seasonal/Technical Equity Trends for December 6th 2017

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Green: Increase from previous day

Red: Decrease from previous day

 

Daily Seasonal/Technical Commodities Trends for December 6th 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 December 6th 2017

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Green: Increase from previous day

Red: Decrease from previous day

 

Keith Richards’ Blog

The Dogs of the Dow strategy has been around for years. I’ve filtered the list to create a new group called the “Best in show” list

Here’s a blog on the outcome: http://www.valuetrend.ca/best-show-new-way-trading-dogs-dow-strategy/

 

S&P 500 Momentum Barometer

The Barometer slipped another 1.14 to 69.40 yesterday. It remains intermediate overbought and trending down.

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TSX Momentum Barometer

The Barometer lost another 3.49 to 41.32 yesterday. It remains intermediate neutral and trending down.

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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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17 Responses to “Tech Talk for Thursday December 7th 2017”

  1. Vik Says:

    Wayne + Muntazir
    Thanks for the comment re: options!

  2. Larry/ON Says:

    Dow Transports – Have outperformed over the past week and a half and maintained upward channel trend. Bodes well for the overall market.

  3. Polish1 Says:

    BITCOIN MANIA / insanityfrom zero hedgeFor those keeping track, this …
    BITCOIN MANIA / insanity
    from zero hedge
    For those keeping track, this is how long it has taken the cryptocurrency to cross the key psychological levels:
    $0000 – $1000: 1789 days
    $1000- $2000: 1271 days
    $2000- $3000: 23 days
    $3000- $4000: 62 days
    $4000- $5000: 61 days
    $5000- $6000: 8 days
    $6000- $7000: 13 days
    $7000- $8000: 14 days
    $8000- $9000: 9 days
    $9000-$10000: 2 days
    $10000-$11000: 1 day
    $11000-$12000: 6 days
    $12000-$13000: 17 hours
    $13000-$14000: 4 hours
    $14000-$15000: 10 hours
    $15000-$16000: 5 hours
    $16000-$17000: 2 hours
    $17000-$18000: 10 minutes
    $18000-$19000: 3 minutes

  4. Larry/ON Says:

    Bitcoin – Someone needs to come up with a leveraged Bitcoin 10x bull ETF. You could sell your house, plow your money in and become a billionaire in 5 minutes.

  5. Mick/NV Says:

    Having a look at mru.to this morning, do not own at the moment but looks like it may head higher. Tested the main pivot point resistance yesterday but could not hold, today opened above that level and holding nicely, if this new support level does hold may run up to around $43 before stalling out. Think there is limited downside in the short term, maybe around the $40 level. Stock is up 4.5% ytd, not great, although has a nice long term chart, up 118% the last 5 years. Small yield of 1.5% but the dividend has increased each year for the past 22, looks like a good investment for a long term hold.

    http://stockcharts.com/h-sc/ui?s=MRU.TO&p=D&b=5&g=0&id=p75362886778&a=561691510

  6. Mick/NV Says:

    ema.to which hit a new all time high yesterday gapped down on the open today after they announced a bought offering at $47.90, trading at around that level now. Have a 1/2 position in this stock and was looking to add more, would prefer to see it drop further before adding however, not sure where the stock price will head at the moment. Even with todays drop, stock is still up 10.5% ytd and has a nice 4% yield.

    http://stockcharts.com/h-sc/ui?s=EMA.TO&p=D&b=5&g=0&id=p96153003920&a=504889876

  7. rick Says:

    Polish ,

    from 1000 to 2000 is a 100 % increase
    from 10.000 to 11.000 is a 10 % increase

    so obviously the time could be 10 times shorter for the same increase .

    But you are right : 15 % increase in one day is huge .

    You can see that only at mergers when a company aggressively want to buy another company .

    Maybe this is what it is .

    Some reach billionaire or millionaire from China instead to buy a house in Vancouver or Seattle is buying bitcoin .
    Because the supply is limited ,exactly like houses in Vancouver ,the price shoot up .

    Do you really think that a 50 year old and rusty and moldy house in West Vancouver deserve 3 million $ ?

  8. Sandra Says:

    Gold money going into Bitcoins.

    When I first mentioned it here it was $7000.

    Who will but when it is time to sell I wonder ?

  9. Mavis Says:

    re Bitcoin: Are we seeing tulips? Rick, while it seems ridiculous that an old house in WV could fetch +$3million the difference to me is that land in the Lower Mainland is finite – supply/demand. Bitcoin is ? what? Beanie Babies? Very good chance that I’m not grasping this.

  10. Polish1 Says:

    Bitcoin Index
    http://stockcharts.com/h-sc/ui?s=XBI&p=D&yr=0&mn=8&dy=0&id=p85176749177&a=431464306&listNum=61

  11. FishFat Says:

    Gold broke support today. It may be that people are selling their gold and buying Bitcoin. Neither has intrinsic value, but Bitcoin is cheaper to store. (Not a recommendation.)
    http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&st=2016-12-01&en=today&id=p64614970825&a=426291163

  12. rick Says:

    Mavis , yes Bitcoin is finite = only 16,6 million and will be maximum 21 million in year 2115. Bitcoin miners will work for those bitcoins .

    And that was the point ( sorry that I did not explain more clearly )
    Houses in vancouver = limited supply
    Bitcoin = limited supply

    so if an old house is valued 3 million why people are surprised about crazy prices in bitcoin ?
    like you said : price is an equilibrium between supply and demand .
    If a 3 million house in vancouver will be 10 million in 10 years ( and again people will accept that price like it is real ), bitcoin could be more right ?
    somebody bought Marylin Monroe dress for 4,8 million . Because is only one , unique .
    somebody pay 450 million for a Leonardo Da Vinci paint .
    Does not have any relation with how much it cost the paint and the frame.
    and the dress ,I am sure that the guy who bought it will not use it .

  13. Polish1 Says:

    If only you could buy a few puts against bitcoin!

  14. Polish1 Says:

    BITCOIN MANIA
    Perhaps the roller coaster has gone over the top?
    $19,000-$18,000: less than an hour
    $18,000-$17,000: less than an hour
    $17,000-$16,851 a few minutes
    $16,851–back to the thin air it was created out of: ???????

  15. rick Says:

    Sandra , I red first time about bitcoin few years ago when the price just dropped from 800 to 200 for a 75 % correction
    Than you mention bitcoin in June this year when the price was 2500 .
    Than I find that there is a limited supply of bitcoin
    and I invest 3000 $ because price = demand divided by supply
    Only 3000 because I am not a big believer in bitcoin . 75 % correction can start tomorrow .
    Going to 0 ? yeah that is possible to .
    So 3000 is the money that I can afford to lose . No more than that .

  16. rick Says:

    Polish , going long on bitcoin is crazy , going short is even more crazier .

    If a long investor is buying something at 100 , the worst can happen = it will go to 0 and he will lose 100 % of the investment .
    If a short trader is selling something at 100 , the worst can happen = it will go to 1000 ( like amazon , google , priceline ) and the trader will lose 10 times more than the initial investment = 1000 %

    CBOE will start trading bitcoin futures next week and CME the following week .
    NO options in this moment but please check , I could be wrong .

    Maybe this is why the price is going so high : people cannot short Bitcoin
    And who knows from next week , because of short sellers in futures ? , the price will go down .
    The only problem is that shorting futures or buying puts is only a simple bet that bitcoin will go down . Is not actually a short position .
    Because a real short position is to borrow bitcoin from your broker and selling it and buy that position later ( with profit or not ) and give it back to your broker .
    Only going short will put pressure on the price .
    By placing a bet ( buying a put option ) that will not influence the price .
    and the losses can go to infinite so I am not sure that you will find a broker and a clearing house to accept a put option .

  17. Polish1 Says:

    rick
    I’ve found that most people fail at trading because of emotion and discipline. For example, a person buys a stock that they like for whatever reason, and typically they don’t have an exit plan, they don’t set a stop for when it goes against them, or have any plans to take profits along the way. Let’s say that the person buys stock ABC at $10 without placing a protective stop, and the stock falls to $9, that’s a 10% loss. The person says to themselves, well the analyst reports are good, it will come back so I’m going to hold. Next the stock falls to $8.50, then $8, they say well, I’ll give it a little more room.
    It becomes a cycle of, I’ll give it a little more room, and one day they are down say 50% and it’s a big loss. The ‘I’ll give it a little more room’ is a vicious cycle, it’s always best to set a stop when you FIRST enter a position, and then stick to it. Otherwise it becomes an emotional game of giving it more room, and now you can’t make an objective non-emotional decision.
    I’ve also seen the same thing on the flip slide, a person buys a stock, it goes up nicely for them, and the higher it goes up, the more bullish they become, when in reality they should consider taking some profits or trailing their stops. (remember my example above when I bought the gold stock in college that went up 10-fold and I didn’t sell only for it to come all the way back down).
    Mechanical systems / models, can be a good fit for the average trader because they instill disciple that the common person doesn’t typically exhibit when trading. They have defined entries and exits based on statistics and logic, use protective stops, etc. and they are unemotional.

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