Tech Talk for Friday December 29th 2017

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Pre-opening Comments for Friday December 29th

U.S. equity index futures were higher this morning. S&P 500 futures were up 12 points in pre-opening trade.

Equity market volumes are expected to remain lower than average today as investors check out early prior to start of the New Year’s holiday weekend.

Energy stocks on both sides of the border are expected to open higher after natural gas and crude oil prices added to recent gains due to record low temperatures in Canada and north eastern U.S. states.

 

Next Tech Talk Report

The report is released on Tuesday January 2nd 2018

 

Observations

Canadian oil services stocks also have started to move higher during their period of seasonal strength from mid-December to the end of April.

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StockTwits Released Yesterday

Technical action by S&P 500 stocks to 10:45: Quiet. Breakout: $STZ. No breakdowns.

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Solar ETF $TAN moved above $25.05 extending an intermediate uptrend.

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Chart of the year for U.S. equity markets in 2018. History repeats!

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“Gassy” ETF $FCG moved above $22.93 extending an intermediate uptrend.

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Natural gas prices $UNG responding to greater than expected inventory drawdown at this time of year.

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George Weston $WN.CA, a TSX 60 stock moved below $108.08 discontinuing an intermediate uptrend.

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Another gold stock breakout! Agnico Eagle $AEM $AEM.CA, a TSX 60 stock moved above $46.18 extending an intermediate uptrend.

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‘Tis the season for strength in Agnico Eagle $AEM $AEM.CA to move higher from mid-December to the end of February!

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Buoyed by strength in energy and metals sectors, the Canadian Dollar moved back above US79.22 cents.

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Trader’s Corner

Daily Seasonal/Technical Equity Trends for December 28th 2017

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Green: Increase from previous day

Red: Decrease from previous day

 

Daily Seasonal/Technical Commodities Trends for December 28th 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 28th 2017

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Green: Increase from previous day

Red: Decrease from previous day

 

S&P 500 Momentum Barometer

The Barometer added 1.60 to 75.40 yesterday. It remains intermediate overbought.

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TSX Momentum Barometer

The Barometer was unchanged yesterday at 59.50. It remains intermediate overbought.

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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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33 Responses to “Tech Talk for Friday December 29th 2017”

  1. wsto Says:

    Does anyone have an opinion on the USD? Has it reach the bottom?

  2. Mick/NV Says:

    not a lot of action in the cdn banks after earnings season passed. TD.to has been trying to break thru the main pivot point resistance the last 3 trading days, without success. There is a gap at around $74.30 that I suspect will get covered before the $65 earnings gap created back in Sept. Stock is up 13.5% ytd, not too bad, will probably continue in the same direction in 2018. Have a full position so won’t be adding on any significant pullback, I think any of the top 5 banks are good holds going into the new year.

    http://stockcharts.com/h-sc/ui?s=TD.TO&p=D&b=5&g=0&id=p09344074224&a=402003323

  3. Ron/BC Says:

    wsto
    Here is a long term chart of the U.S.$. The upper charts show the Euro which trades inverse to the U.S.$ at major resistance. And the other above chart shows the CD$ also at its downtrendline relative to the U.S.$. And the major price breakout of the U.S.$ over 92 resistance is still holding. So the long term bullish trend is still intact for the U.S.$. The last several months the U.S.$ has been choppy and trading between 91 and 95. A break below this 91-92 support would suggest a test of the next support at the 89 area. But as long as those upper charts don’t see breakouts the long term bullish trend is still intact. Short term price is simply choppy. The CD$ did breakout above its tight 1.5 cent two month channel between 77.41 and 79. Odds favour a run up to the 80-81 area.

    http://stockcharts.com/h-sc/ui?s=%24USD&p=W&yr=20&mn=0&dy=0&id=p59298191990&a=388965041

    http://stockcharts.com/h-sc/ui?s=%24CDW&p=D&yr=2&mn=0&dy=0&id=p66094918907&a=459723983

  4. Ron/BC Says:

    wsto
    Here is the seasonal trend charts from Equity Clock that show the historical trend of the U.S.$ and the CD$. Not an exact science of course but is what ‘typically’ occurs in these time frames for a wide variety of reasons.

    http://charts.equityclock.com/us-dollar-index-futures-seasonal-chart

    http://charts.equityclock.com/canadian-dollar-futures-cd-seasonal-chart

  5. Sandra Says:

    Ron/BC:
    What do you think of VALE.S.A – extremely bullish?
    If one had to add where do you see pullback?

    Thanks!

  6. wsto Says:

    #3,4 Ron/BC

    Thank you for the charts. If my interpretation is correct, we are close to an intermediate bottom of the USD, and seasonality charts suggest a good probability of a USD rebound at the beginning of Jan. Are there any other charts/indicators I should check?

  7. Ron/BC Says:

    Sandra
    Vale broke out above $11.50 so that is now support. All the metal stocks are rallying in anticipation of bullish commodity markets ahead. I’ve overlaid a few metal markets to show their relative performance to Vale. I am very curious as to how the first week in the new year responds and the entire month of January to see if the gains in some markets hold or not, or if the commodity related markets do take off and dominate. This would affect the CD$ especially one would think and see the CD$ rally. I do think the U.S. would like to see a low U.S.$ to attract business and manufacturing back to the U.S. and be more competitive exporting those goods. And historically commodities do well in the last part of a bull market. So there are a lot of good reasons for a strong commodity based market ahead. But as usual “A chain is only as strong as its weakest link.”

    http://stockcharts.com/h-sc/ui?s=VALE&p=D&yr=2&mn=0&dy=0&id=p79799603748&a=566292580

  8. Ron/BC Says:

    wsto

    Those 4 charts cover the U.S.$ well for decades. The 91-92 area is important price support and if broken as I posted would likely see 89 hold a support as that is also the 6 year uptrendline area and former highs that were finally cleared and should serve as support. But as I posted in #7 the U.S. would do much better with a low currency and bring back a lot of manufacturing which it lost over the years. Politics always play an important role in currencies. All I can do is track the charts and 2017 was a bearish year for the U.S.$. So now is the big test of support right here. Here is one more chart of the difference between the U.S.10 year treasury rate and the German 10 year treasury rate. The theory is the U.S.$ follows the country that pays the highest rate. I’ve overlaid this ‘spread’ of rates on the U.S.$ chart and it does seem to be basically true as big money is ‘parked’ in these treasuries and they will chose to park their cash with whichever pays the most. Small rate differences have a huge effect on large amounts of cash. Not a perfect correlation but worth paying attention to.

    http://stockcharts.com/h-sc/ui?s=%24USD&p=D&yr=1&mn=0&dy=0&id=p65149657053&a=532603566

  9. Sandra Says:

    Ron/BC:
    Thanks for comments on VALE.
    Metal and mining stocks have done well this month. But today most of them pulled back, I guess profit taking but than daily charts start looking bearish (indicating lower close). It will be interesting to see what happens next week. Will there be some more profit taking or with everyone back buyers will push prices higher. Also markets are usually up in first week of month. So holding off any adding till next week. I actually sold some TECK.B/TO this morning so will see if that was good or not 🙂

    Ron/BC, thank you for your help this year. Hope that 2018 will bring you great health, happiness and lot of golfing and travelling! Have a blissful new year!

  10. Sandra Says:

    Hi everyone!

    Wish you a very blissful 2018. May it bring you and yours loads of joy, happiness and great health.
    See you here next year 🙂

  11. Mick/NV Says:

    I believe some time ago Bernie(I think it was Bernie) had asked on what people had as their top 5 holdings and how their portfolios performed over a period of time. I tried to post my top 5 holdings and performance quarterly, since I tend to be buy and hold, with my correlation to the market(TSX) running around .25 this year, so in theory no big swing either way should have a big impact. My current top 5 are T.to, enb.to, fts.to, aapl and cnr.to, I added shares in cnr.to a month or so ago moving it above ry.to which had been in my top 5 for quite some time. As the trading day and year comes to an end, my portfolio is up 14%, or approx a real return of 12% considering a 2% inflation for BC. Not as good as last year when my return was around 23% but considering the TSX is up just under 6% ytd, the overall return is not too bad. All of my stocks pay dividends, some have increased yearly for a number of years, others such as WSP.to pay a consistent dividend , which I suspect will continue . I’m sure others here have done better, maybe some worse, overall if you are able to keep up with inflation and still match the market performance, you have done really well. Hope the new year brings even better returns for everyone.

  12. Ron/BC Says:

    Sandra
    A lot of analysts will be watching January as an indicator of what to expect in 2018. The first week in January is often extremely volatile with major selloffs along with major buying and everything imaginable inbetween on the week. So the first week will be watched and then the first 1/2 and then the entire month for an assessment of 2018. But there is usually some fireworks in January so I wouldn’t jump to any conclusions on any given day’s price action. The broad market ‘could be’ volatile and all over the place. I posted some time ago that I’d love to see a chart of the market at the end of January. But I’ll just have to wait and deal with the cards served or stand aside. All the best ahead….

  13. bruce Says:

    Hi Sherry
    Any chance of you posting Armstrong’s year end closings blog?…..

  14. Sherri Says:

    Happy New Year!

    Armstrong today – the close 2017:

    “Welcome to 2018 the year of Chaos, Confusion, and Panics. On our Yearly Models, we have had THREE Directional Change targets all back-to-back from 2017 to 2019. From a technical perspective, we achieved an outside reversals to the upside in the Euro making 2017 the low but closing above the 2016 high. We never quite reached our target in the 125 level, so it appears we still have time to do this here in the coming New Year. We can see that technical resistance begins at 12386 followed by 13056. Now that the Trump Tax Reform is in place, the rumor is done and now we have the news to face. With the Democrats gearing up on the Impeachment to try to use that as the means to take back the Congress, we can count on the polls swinging the dollar and the market up and down for now.

    We still see the dollar in the broader term rising to record highs, but that seems more likely off into 2021, where we also have panic cycles. This could buy us more time before the worst of the monetary crisis begins to tear governments apart.

    Strangely, gold has once again amazingly actually closed precisely on our Yearly Resistance number which was 1309.30 to be precise. Back in February 16, 2016, we wrote on the blog: “The 1309 is where we start to encounter the yearly resistance level.”

    The broad channel from the 1970 low rests at the top-end at 1296.70 during 2018. This will be the important support to watch. Dipping below that will reinstate the bearishness near-term whereas gold is at least neutral.

    However, when we look at gold in Euros, it finished the year in a weaker position. This further implies that we will see dollar weakness BEFORE we get the major meltdown moving into 2021. The closing in terms of Euro for the year 2017 was 1091.63. Here the top of that channel resides at 1151.08 so here we are in a weaker position warning that the Euro can still rally against the dollar before turning lower. Note that there was a clear 3-year reaction in gold and then it turned lower in Euro during 2017.

    So while gold may retest the resistance in dollars, this still does not appear to be breakout until we see it rise in all currencies. Nonetheless, we are running out of time. Now the major low for gold at 1045 back in 2015 is a 3-year correction from the highest closing in 2012. Therefore, this is a good technical pattern that can hold. The worse case scenario is a 2018 low. However, any low in dollars after that pushes us off into 2021 and that could be the final outcome with a gold low and a massive dollar high that breaks the monetary system. More on that in an upcoming special report.

    The DAX closed just below our key yearly technical resistance which stood at 1295803 settling at 1291764. The Nikkei closed at an 8-year high 2276494 and now critical support will lie at 1998390 during 2018. The Canada share index also closed at an 8-year new record high. Our resistance for 2017 stood at 163405 and the high for the year stopped short of that target reaching 162322. In 2018, this target resistance moves up slightly to 164722.

    In the Dow, our Channel Resistance stood at 24,801.95 and the intraday high for 2017 came in at 24,876.07 with the closing for the year at 24,719.22 closing below that top of the channel. This channel moves up to 25,537.13. Back on October 14, 2014, we wrote:

    “Instead of a Phase Transition that doubles the Dow Jones from the 2009 low of 6,440 (12,000), which we have already achieved, we are looking at a rally into 2017-2018 with the Dow reaching the 25,000-28,000 level. That would be the minimum target objective. ”

    So now that many people are starting to mimic whatever we say calling for an immediate rally, they may be in for a big surprise. This 2018 will be a PANIC CYCLE YEAR and high volatility. We reached our objective stated back in 2014 of the minimum target objective of 25,000. A Panic Cycle typically causes both directions to be tested. So just when you thought this might be easy, the market has a way of confounding the best of human minds.

    We will also be doing a special report on the stock markets as well as the metals.”

  15. bruce Says:

    tnx Sherri………very kind of you…..have a healthy 2018….

  16. Ron/BC Says:

    I see in the paper today that the S&P500 had a 21.8% return for the year. And the Dow Industrials had a 25.1% return. And the NASDAQ had a 28.2% return. I have been considering a variety of “investments” over the last few years including holding a stock portfolio. I’ve gone over a variety of Mutual Funds including ones made up of ETFs and after examining their holdings considered making my own portfolio to avoid management expense fees. Wouldn’t be that difficult as most of the funds have similar stock portfolios. After looking at many funds they all had a few from High Risk to Medium Risk down to Low Risk. But with the broad market indexes performance as I listed above I really don’t think I could match those returns that are over 20%. After all,each Index is a broad based basket of stocks not a bunch of random single stocks that have their issues along the way and individual risks. When a stock in the $SPX crashes and is dumped from the index it is simply replaced with a good stock. The person holding that single stock loses big time while those holding an ETF of the Index isn’t that effected. All one needs to track is the Index to hold the equivalent ETF in each Sector as long as an uptrend exists. Cherry picking stocks to hold in a wide variety of sectors and industries just doesn’t seem to compare in results or risk. Even the best of them don’t tend to outperform the Indexes as has been reported year after year. As I pointed out I don’t think I could beat the performance of the major Indexes this year with a selected group of stocks no matter how much time I spent on research etc. I realize those are U.S. Indexes but the $TSX has always been dominated by Energy and mining etc and the only time it will do well is in a commodity bull market. The TSX even with a strong banking group only returned less than 6% on the year. Not a good Index to focus on. I am leaning towards buying the 3 or 4 major Index ETFs on a good pullback.

  17. Kam Says:

    Ron/BC,

    re-16.

    Thanks for saying that. I remember posting that this year or last when people asked what they should hold and my answer was to hold these all market etf’s. What is the point of holding stocks and still can’t beat the market? Imagine holding Spy on Jan01 2017 and walking out with 20%(don’t know if the dividend is incl) and go to sleep not worried about earnings or anything else.

    However, it is time to wait now. We are looking for that game over 4th wave drop and when blood is on the streets then we walk in,lol. I am only day trading due to wait.

    I bought some SVXY Jan 120 expiry and IWM 150 puts yesterday. Let’s see. Maybe it turns into 2016 beginning months soon. Happy New Year.

  18. FishFat Says:

    When looking at the impressive returns on the US markets it is useful to also consider the foreign exchange gains/losses to relate the performance to Cdn$ investments. For instance at the close on the last trading day in 2016 Cdn$ was 0.7448 (Bank of Canada published rate). At the close on the last of trading day in 2017 the Cdn$ was 0.7971.

    In 2017 SPY gained $48.13 USD (including $4.80 UD in dividends) or 21.53% in USD and 13.56% in Cdn$ terms. Comparatively, XIU.to returned 9.57% in 2017 (including dividends).

    There is saying: “If you can make an 8% return on the market you are GOOD, if you can make a 12% return you are VERY GOOD, and if you can make a 16% return you are very lucky.”

  19. Ron/BC Says:

    FishFat
    Currency will always be a factor with investments. I’ve always found it is always worth having plenty of U.S.$ on hand for many reasons. But my observations are the major indexes in the U.S. consistently outperform the mutual funds and top individual investors year after year with few exceptions. And with all the Etfs of them today why try to outdo what has such a successful track record. If you can’t beat them might as well join them. Many also trade on the $TSX in CD$ as well. And to satisfy the trading bug have some cash just for trading and see how we compared to the index investments at the end of the year.

    ALL THE BEST IN 2018 EVERYONE!

  20. FishFat Says:

    Ron/BC
    Your point on buying a market ETF is a good one and I don’t disagree. But I do wonder why people (including me) persist on picking stocks when a passive investment in a market ETF will consistently get you good returns. I think it might relate to a flaw in the human character. A comedian once said something that stuck in my head. He remarked that no matter our age, race, religion, gender, or sexual orientation – we all have one thing in common, we all think we are better than average drivers.

  21. Bernie Says:

    Ron/BC,

    I disagree with your observation that major indexes in the U.S. consistently top individual investors year after year with few exceptions. As you know I primarily invest for dividends and growing income but I do track my total returns as well. I’ve had an off year in 2017 with respect to total returns with a 5.0% TR but I’ve beaten SPY 5 years out of the past 10 with a 70% Canadian 30% U.S. content. Overall since I started with my dividend growth investing in 2008 my average annual TR is 10.2% vs 10.5% for SPY and 4.2% for XIU.TO. I am certainly not an exceptional investor. If I can outperform the SPY 50% of the time without even trying to with a predominantly Canadian stock portfolio I’d bet there is a larger percentage of investors out there beating the index than what we’re lead to believe.

    I won’t invest in the U.S. equity indexes in my primary account, even though they are outperforming me slightly in TR, because they’re a rotten income vehicle. I prefer to choose my own course through passive individual dividend stock selections. That’s me. A younger investor, like Kam, is probably better off with a growth focus via passive equity index ETFs. As you’ve often said there are many ways to skin a cat. The index ETF path you’re considering is likely the right one for you if you’re not comfortable with stock selection and don’t need income.

  22. Bernie Says:

    Mick/NV,

    Re: #11 Top 5
    I’m pretty sure it was NeilAB who asked what everyone has for their top 5 holdings. Regardless, I think its fun to see what’s in other peoples financial wallets and how they’re doing performance wise.

    My current top 5 ranked by market value are:
    EIF.TO, LMT, CMI, WEC, and AD.TO

    My current top 5 ranked by income are:
    LMT, ENB.TO, BIP.UN, OHI, WEC

    As for 2017 TR performance I had an off year at 5.0%. My dividend growth was 8.7%, still not too shabby when compared to inflation.

  23. Bernie Says:

    HAPPY NEW YEAR TO ALL 🙂

  24. Pat/Vic Says:

    I gained 46% in my margin..a small increase in my RRSP and I am down about 10% in my TFSA.
    I wish my gains were in the TFSA!
    I did that with a lot of help from the people on this board..Thank you!
    Cheers,Pat

  25. Pat/Vic Says:

    Forgot to mention most of my gains were going in and out of CRH,MX and SHOP
    One very lucky trade with NVCN made 12K

  26. bruce Says:

    hi sherri
    can we trouble you again for Armstrong;s newest?……..tnx….

  27. Sherri Says:

    Armstrong Dow 2018:

    “A lot of emails have come in on the last Private Blog Post. Our three primary target were 18500, 23700, and then 36000-40000. We also mentioned there would be intermediate resistance at the 25000 and 28000 level. While one email said we were cherry-picking from 2014 comments, the fact is these numbers do not change. The entire point is that 2018 is a Panic Cycle Year and the profile appears to be choppy noting every other month until we reach July. The Empirical models point to May as the strongest target with a Monthly Panic Cycle at that time.

    It is always hard to guess the fundamentals that will be involved. There will be more EU elections to call confidence to come into question in the March/May time period so that could be reason for that period of interest. But we also have the Democrats who will do everything possible now to raise the controversy of Impeachment and mainstream media will play along. So 2018 is going to be a bashing-Trump celebration for the Democrats will have nothing else to rally their cause but to just oppose whatever Trump and the Republican propose. With the 2018 midterm elections in November, the computer does not seem to be looking at that period with any crazy volatility. It definitely appears that we are dealing with the first half of 2018 rather than the second. Thus, the chaos comes first and them we may get back to a trend for the second half of 2018.

    What will become absolutely CRITICAL is a new high in the Dow above the 2017 high of 24876.07. The entire point of bringing up the 2014 post calling for a high at this time at the minimum threshold of 25,000-28,000, is the fact that we have reached this minimum target and that warns we can consolidate trapping people into a bear position. We do have a Monthly Bearish now at the 21279.00 level. This is the FIRST time a Monthly Bearish has risen above the 20,000 level so this is NOT something to ignore. If that were elected, then a sharp drop back to 17850 area becomes possible. Only a monthly closing below 16,000 level would signal a sustainable correction. That would then be a sign of a full blown extension of TIME meaning the ultimate high will be clearly pushed off into the 2032 period and that means the MOST EXTREME target would become likely, which I am hesitant to even mention and will not do so on the public blog for it would surely be taken out of context and used improperly. ”

    Our 40,000 target was for a high no sooner than 2020. That is not the target for an extended rally into 2032.

    So the question becomes, what will January produce? High or Low? The Main Weekly Bearish is still at the 23240 level with the Minor at 23500. That has not moved up. We warned that once that Weekly Bearish rose to 23,500, the market had a choice. It would either elect it when we were trading at 23700 or we would blast out to new highs. The market took the second position but the numbers did not change.

    If the Dow OPENS above 24876.07, that will be a very bullish indicator for the year LONG-TERM. What does appear is March and May should produce opposite events.A breach of last week’s low of 24708.42, will ring an alarm bell here that we could test support before resistance early only.

    This 25,000-28,000 is the new barrier. Once we get through that area, then the next minimum target becomes 32,000.

    Keep in mind that the dollar is still vulnerable short-term. We could still see the Euro rally to the 12570 level before it declines. So a decline in the dollar could spark foreign selling and that means we could see weakness in the Dow before we get the strength.”

  28. Sherri Says:

    darn, tried to beat you to it, Bruce!

  29. Ron/BC Says:

    FishFat
    I agree with #20. Everyone thinks they can do better than the standard. That’s just human nature. But a bird in the hand is better than two in the bush they say. And at some point in our life one needs to bet on the bird in the hand rather than chase the two in the bush. Especially when that bird in hand is also one of the better ones.

  30. Muntazir Says:

    I agree & have thought that if one (I) can not beat index year after year then one should invest in index etf. Personally have invested in index mutual funds for resp ( small $).
    This year have underperformed markets with 20% in money markets as might need to draw & some small a/c.
    In my main a/c Canadian holdings returned 15% ( biggest holding here is qqq(>%).
    I started monitoring in but cf to index from 2014 (7.7%) & beat tsx,dow & hac but behind s&p & Nsdq. 2015 was 0.4% & beat tsx,dj & s&p but below nsdq.2016 (11% beat s&p & nsdq but below s&p & dow. 2017 below markets.

    just sharing above.

    top 5 holdings qqq,cm,wpm ( write cc against it),scl & pot.

    Wishing the Best of everything to Everybody in 2018

  31. Muntazir Says:

    oops ! 3rd line should read Canadian holdings returned less than 5% & US 15% + where biggest holding is qqq (22%)

  32. bruce Says:

    thanks again Sherri……he’s always interesting but hard to pinpoint….

  33. Ana Says:

    Happy New Year!

    Wishing you all a very healthy, happy and prosperous 2018!

    Do not be afraid to step back and not be in the market from time to time, just to watch. That is the

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