Tech Talk for Wednesday January 3rd 2018

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Pre-opening Comments for Wednesday January 3rd

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

IBM gained $0.63 to $47.26 after RBC Capital upgraded the stock to Outperform from Sector Perform.

Wendy’s added $0.13 to $16.45 after SunTrust raised its target price to $22 from $17.

McDonald’s advanced $1.02 to $174.24 after SunTrust raised its target price to $205 from $178.

Scana jumped $8.43 to $47.30 after announcing a share exchange merger with Dominion Energy valued at $7.9 billion.

American Express gained $0.31 to $99.25 after Deutsche Bank initiated coverage with a Buy rating

Oracle added $0.63 to $47.26 after Morgan Stanley upgraded the stock to Overweight from Equal Weight.

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/01/02/stock-market-outlook-for-january-3-2018/

Note seasonality charts on the Energy sector, Technology sector, Healthcare sector, CRB Index, Shanghai Composite Index and Dow Jones Industrial Average during a Mid-term election year.

Observations

Gold equities and related ETFs soared on continuing U.S. Dollar weakness

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Conversely, the Euro closed at a 3 year high.

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Zinc prices are following copper and aluminum prices to new multi-year highs.

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Strength in the Materials sector (e.g. XLB) is led by strength in the S&P Chemical Index to an all-time high.

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StockTwits Released Yesterday @EquityClock

Technical action by S&P 500 stocks to 10:00: Quietly mixed. Breakouts: $BDX $IP. Breakdown: $VRSN

Editor’s Note: After 10:00 AM EST, breakouts included NFLX, INCY, FRT, AAP and SYK. Breakdowns included: HON, PHM, AWK, HII and IVZ.

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China is back! China iShares $FXI moved above $47.42 to a 32 month high extending an intermediate uptrend.

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Editor’s Note: Hong Kong iShares also moved to an all-time high.

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Loblaw $L.CA, a TSX 60 stock moved below $67.47 setting an intermediate downtrend.

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Brazil iShares $EWZ moved above $40.92 resuming an intermediate uptrend.

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Lithium ETN $LIT moved above $39.50 to an all-time high extending an intermediate uptrend.

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Netflix $NFLX, one of the FAANG stocks moved above $199.68 on a Macquarie upgrade.

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Telus $T.CA, a TSX 60 stock moved below $47.07 completing a double top pattern.

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TSX Energy iShares $XEG.CA moved above $12.33 changing trend.

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Biotech ETF $BBH moved above $127.20 completing a short term reverse Head & Shoulders pattern.’Tis the season for strength!

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‘Tis the season for Biotech stocks and ETFs to move higher prior to the JP Morgan Healthcare Conference: Jan.8-11 this year! $BBH $IBB $FBT

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Suncor $SU.CA, a TSX 60 stock moved above $46.66 to a 9 year high extending an intermediate uptrend.

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Ensign Energy Services $ESI.CA, a Cdn. oil services stock moved above $6.43 completing a double bottom pattern.

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Russell Steel $RUS.CA moved above $29.51 to a 3 year high extending an intermediate uptrend.

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Trader’s Corner

Daily Seasonal/Technical Equity Trends for January 2nd 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Daily Seasonal/Technical Commodities Trends for January 2nd 2018

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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 January 2nd 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

S&P 500 Momentum Barometer

The Barometer added 3.00 to 75.80 yesterday. It remains intermediate overbought.

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TSX Momentum Barometer

The Barometer added 4.26 to 65.83 yesterday. 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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32 Responses to “Tech Talk for Wednesday January 3rd 2018”

  1. Ana Says:

    So, is anyone still with TD WebBroker? Locked out of my account, no phone number is active to contact at TD. A recording to say that they are having technical difficulties, even the phone service!

    Serenity now! Serenity now!

    https://www.youtube.com/watch?v=Ow_9MglZrhs

    😀 😀 😀

  2. Mick/NV Says:

    Ana

    Using Advanced Dashboard, no issues.

  3. Mick/NV Says:

    About a week or so ago, I made a comment that i thought the cdn banks had flattened out, it appears that has stopped today, at least for ry.to which this morning is at a new all time high. Stock was up 16% last year, nice gain compared the the TSX’s 6% gain, I expect that ry.to will have a good year this year as their U.S. operations should benefit from the u.s. tax changes. Wouldn’t buy the stock today, but a drop to the s2 pivot point support or lower should be a good entry point. Have a full position in this one, might be tempted to go overweight if price dropped to $99 or below.

    http://stockcharts.com/h-sc/ui?s=RY.TO&p=D&b=5&g=0&id=p90355347794&a=402353557

  4. Ana Says:

    Thank you Mick/NV.

    Will try to get to that once I can get into my account!

    Except I trade on the indicators on my WebBroker that I have been using for the past many years, with help from the indicators on my live feed. That is what happens when you get a bit older, you no longer are willing to change things that work. Plus, never enough time to sit down to learn about Advanced Dashboard.

    What features are there on Advanced Dashboard that you do not get on the normal WebBroker?

  5. Mick/NV Says:

    Ana

    You can bypass webbroker entirely to use advanced dashboard as there is a separate app you can download. Advanced Dashboard has free real time cdn/u.s. quotes (level 1) plus quasi scans, charts, fundamental analytics etc. I suspect any indicators you have in webbroker you will also have in advanced dashboard, but you would have to check. Took me awhile to get used to the system and set everything up that I need or like to see, overall works well for me.

  6. Mick/NV Says:

    AQN.to has been pulling back the last few weeks and has just dropped below the s1 pivot point support. the stock was up close to 29% last year, not sure how it will perform this year. Have owned this one for awhile and was looking at adding more as I have maybe a 1/2 position at most. Would like to see price drop to below the s2 pivot point support before buying, which might happen if this trend continues.

    http://stockcharts.com/h-sc/ui?s=AQN.TO&p=D&b=5&g=0&id=p50154551422&a=456603884

  7. Mavis Says:

    Ana, this from CBC this morning.

    http://www.cbc.ca/news/business/td-webbroker-website-login-problems-1.4470835

  8. Mick/NV Says:

    re: #7

    The only think I can think of is that these people have level 2 quotes on their webbroker account which they get for free based on their net worth, other than that their comments make no sense. Why would an active trader pay $9.99 a trade when they can pay 1/2 that at interactive brokers or virtual brokers, as 2 examples. I doubt they will be leaving TD.

  9. roy Says:

    Hello Mick/NV Re # 8 – seems like with the threat of increasing rates, these high dividend stocks like AQN,FTS,T etc are getting hurt. You sound like you feel the drop will be temporary?

  10. Ana Says:

    #3. Mick/NV

    So on my very fast day trading charts for RY.TO, there is still some room to run.

    Will have to see what the chart looks like tomorrow.

  11. Ana Says:

    #7. Mavis,

    Thank you for that information! Still on hold from the morning opening to speak to Investment Support.

  12. Scot Says:

    Sherri, did you see Armstrong had another private post on Jan 191st for the Dow? https://www.armstrongeconomics.com/markets-by-sector/stock-indicies/dow-jones/private-blog-the-dow-view-in-2018/

  13. Mick/NV Says:

    Roy

    Other than Telus, FTS,AQN and EMA have business’s in the U.S., which I suspect with the current tax bill should be positive for the bottom line. SAP.to , although not a utility, also has u.s. subsidiaries, the latest comment by TD suggest the tax bill will add approx 15 cents to sap’s earnings for the year, that is significant.
    All these companies, including Telus increase their dividends yearly, I do not see that changing, I consider these pullbacks to be good buying opportunities for those looking to invest, as I noted with enb.to yesterday, one can even make a good trade if they are able to pick that nice entry point, not always easy to do though.

  14. roy Says:

    Hello Mick/NV Re # 13 – makes sense. Thanks for responding

  15. LonyJ Says:

    Bernie
    You enquired re my progress with a DGI strategy.
    I am still a capital gains swing trader at heart but over the past 6 months have boosted DGI in TFSAs and RIFs.
    Some of the higher yields are IPL, T(AT&T),BEP, BCE, T, AQN, FTS, VLO, RY, TD.
    Thanks for your initial assistance.
    Re the “U.S. Mid-cap trading strategy”, I followed along your work with Ron/BC and the 20,50,1 MACD ‘fitting’ strategy.
    Did Alpha Investment Management’ have anything useful for adjusting your strategy for ‘mid-term election years.
    I intend to get on the TTM board more this year, at least until golf season rolls around again in Ontario.

  16. Bernie Says:

    LonyJ,

    Re: #15 – adjusting your strategy for mid-term election years

    I haven’t looked into this is in any detail but there are modified strategies which deal with election years on the Alpha Investment Management site. I suggest you look into the “Alpha Seasonal Strategy” and “The FormulaTM”. They are detailed on this page – http://www.alphaim.net/programs.html.

  17. Bernie Says:

    Ron/BC et al,

    You might be interested in the linked article below “Dividend Aristocrat Performance: December 2017”. The U.S. Dividend Aristocrats are still alive and doing well, especially the low yielders. They’ve outperformed the broad equity index long term, especially during the downturns. I think $USD ETFs NOBL and DGRO would look good in your portfolio. They returned 21.02% and 23.01% respectively in 2017.
    https://seekingalpha.com/article/4135114-dividend-aristocrat-performance-december-2017

  18. Ron/BC Says:

    Bernie
    I’ve spent considerable time on the 20,50,1 strategy and found adding a 10ema on that MACD indicator which is under OVERLAY on the far right of MACD improved the timeliness of the buy signals considerably. So when the 10ema line crosses above that MACD especially when far below the zero line you don’t have to wait for the MACD line to cross above the zero line. Much better entry point. As far as seeing that MACD falling when above the zero line that does not mean “price” will selloff as often price will track sideways or even go higher with a falling MACD. Definately don’t short when you see this. Sometimes price will selloff when the MACD sells off but definately not always. Best signals are when MACD is below the zero line and then curls back up with the 10ema crossing above it first for a quicker signal. But as long as that MACD is above the zero line the 20ema is above the 50ema like a train track and that market is healthy. You’ll also often see the MACD pullback and tag the zero line and curl up again. This is bullish for price as well. Here is the MDY with MDYG (growth) and MDYV ( value) overlaid to show the 3 Mid Cap ETFs relative relationship if that means anything to you. But try this MACD but always with the 10ema at the end under OVERLAY then update and save. I think you’ll be happy you did.

    http://stockcharts.com/h-sc/ui?s=MDY&p=D&yr=3&mn=0&dy=0&id=p18294151646&a=567373337

  19. Ron/BC Says:

    Bernie
    I should add the above oscillators are good for ‘short term’ trades (bounces) which you will get even in a pronounced downtrend. The MACD strategy ignores them. Also for clarity view a one year chart with these MACD signals to see exact prices and signals rather than multiple years that is just for validating the signals and reference. The Daily chart seems to be the best for timeliness on signals and price and clarity. Weekly charts are very clear but not as timely. Try it out on other strategies and if you come across something let me know.

  20. roy Says:

    Hello Ron/BC and Bernie
    wrt MDY – The optimum buy is Nov 1 to May 31,but is there really a need to sell it at that time? I noticed the stock has done very well over a long period with no need to sell. Am I reading it correctly?

  21. Ron/BC Says:

    Here is a chart of Fortis FTS.to. Price is all the way back to its uptrendline. The oscillators are oversold but no positive divergences to be seen. The Modified MACD is back to the zero line once again but no signal of it curling up yet. And it’s not a fast indicator as it measures the ‘trend’ not short term prices. The Utility stocks have been hammered but many are at price support areas & oversold and are either the place to buy or are just continuing to break down and crash and burn. FTS.to closed right on the lows of the day which is not a good sign as smart money didn’t jump in near the close. No sign of a turn around yet………A selloff of the broad market would be typical here to see the Utilities bounce back from oversold levels with scared money getting into them again for safety. Big test dead ahead for Utilities and the broad market. Rat hair/rat now.

    http://stockcharts.com/h-sc/ui?s=FTS.TO&p=D&yr=1&mn=0&dy=0&id=p04915847161&a=482742096

  22. Ron/BC Says:

    Bernie
    Here is a chart of NOBL and DGRO. Both looking very healthy but also a little stretched out in price and momentum and in need of a pullback. Note the Modified MACD ‘major’ signals. Far more signals are present but best to stick to the best ones. I would likely exit more often than necessary and take more bullish crossovers but that’s just me. You can see not all pullbacks in the Modified MACD result in price pullbacks. Doesn’t mean one can’t exit on the negative crossovers and stand aside though. So a person can have two strategies with this being one longer term and one shorter term.

    http://stockcharts.com/h-sc/ui?s=NOBL&p=D&yr=2&mn=0&dy=0&id=p94457204231&a=498359829

    http://stockcharts.com/h-sc/ui?s=DGRO&p=D&yr=3&mn=6&dy=0&id=p77612352178&a=533582992

  23. Ana Says:

    The Leonard Cohen Tribute Show is tonight on CBC.

    “Tower of Song”

  24. Bernie Says:

    Ron/BC,

    Re: #18, 19 & 22
    Lots to look at here and little time to do it. I’ll get back to you on this, thanks!

  25. Bernie Says:

    Roy,

    Re: #20
    The Nov to May period is only the period of strong seasonality. The May 31 and Oct 31 exit/entry points are only suggestions for the common denominator of investors who want to keep things as simple as possible. I’d estimate 99%+ of investors have no clue of what technical analysis is about.

  26. Bernie Says:

    Roy,

    If interested, I’d suggest reading about the strategy which is detailed on the Alpha Investment Management site in the link I gave LonyJ in #16. The power/dead zones are explained in the Alpha Mid-Cap Power Index links.

  27. Sherri Says:

    #12 Scott
    Posted two DOW updates on the Dec 29th blog……..Dec 30th and Jan 1

  28. Sherri Says:

    Armstrong Gold 2018

    “The Gold closing at 1309.30 was technically bullish. It did elect a very minor Yearly Bullish Reversal we have at the 1307.80 level. However, the Major Yearly Bullish stands at the 1432.50 level, so this provides an indication that gold is preparing for a rally, but we are not quite there just yet for a breakout.

    This 2017 closing indicates that we may now test the upper bands of resistance during 2018 coinciding with a test of support in the dollar. Our projected resistance for 2018 stands at 1449.73 with closing resistance for 2018 at 1393. Ideally, to create at least a reaction high means we would need to exceed 1377.50 intraday, which is the 2016 high. We did close above the Downtrend Line from the 2011 high to the 2016 high, which stood at 1268.26. This once again indicates that gold is in a near-term reaction phase.

    Everything will turn on 2019. Since the low now in 2015 intraday, reactions max-out at 3 time units. This implies that gold should exceed 1377.50 here during this new year 2018. At the very least, 2018 must close above 1393 to imply that the 2015 low will hold as a 3-year reaction low from the 2012 high-close rather than the 2011 intraday high.

    Technically, we should see gold rally to at least exceed 1377.50. The resistance will stand at 1393, 1432, and 1449. It remains possible that the low is in place. This depends upon how bad things unfold in Europe for the support in gold is really the retail market. People in Europe are already hoarding cash. We may see this begin to move to gold in Europe.

    We will be doing a Special Report for the Metals and review gold in various currencies.”

  29. Bernie Says:

    Ron/BC,

    Re: #18-19
    Thanks for your chart. I’m not sure what you mean when you say “adding a 10ema on that MACD indicator which is under OVERLAY on the far right of MACD”. Unfortunately, I’m unable to change the settings or time frame without the chart becoming very small and unclear with less features, ie; I’m not a paid subscriber so I don’t have the luxury of options subscribers have. Without changing the settings I do see your addition of the 10EMA can make for more timely trade entries. I would really appreciate it if you could update the chart with a one year time frame.

  30. Bernie Says:

    Ron/BC,

    If possible, could you also provide similar one year charts of XMC.TO and XMH.TO?

  31. Bernie Says:

    Ron/BC,

    Re: #22 NOBL & DGRO
    I’m not looking to buy either. The yield is too light for my liking. I just felt you’d be interested in these ETFs because they will likely outperform the broad index in the long run and in down markets. They’re really more about growth than yield which is also up your alley. I agree they’re a bit pricey to enter right now.

  32. Ron/BC Says:

    Bernie
    Here is a one year chart of MDY with MDYG and MDYV overlaid. Don’t know if you want to see the other two overlaid or not as I can remove them. Just thought you may find the other two have value for whatever reason with one Mid Cap being growth and the other value. Also I have the RSI 8 and the Slow Stochastics on above as a short term indicator. Don’t know if you want them either as they wont line up with the 20,50,1 MACD as that is a “TREND” indicator that is for investing not trading so much like the above oscillators. In any case this one year chart has only one important buy signal with the Modified MACD when below the zero line support. Most of the year price was consolidating with the MACD also trading sideways. I don’t think I explained the crossovers well. You can see the black line is the 20,50,1 MACD. The blue line is the 10 day exponential moving average of the MACD which of course is slower being a 10 day average of it. So the crossovers are the 20,,50,1 MACD in black crossing over its 10 day average. When the MACD is above the zero line the market is healthy overall and cross overs don’t need to be reacted on unless you want to trade very short term. That in itself would be ok for trading short term at times but not for investing. What gives the best bang for the buck is when the MACD is below the zero line and the further the better and then it crosses over the blue 10 day moving average for a buy signal. From the charts I’ve viewed you tend to see a strong run up. Also when the MACD is above the zero line and comes down and tags that zero line and curls up the market tends to rally again. This one year chart only shows the one buy signal while the #18 post example shows a few of them but is smaller to view. I’ve changed this chart’s size to 1280 rather than 1024 to increase the size if you are having trouble viewing it. Let me know if this is what you want to see. I’ll have to look at the other $TSX stocks you mentioned later on.

    http://stockcharts.com/h-sc/ui?s=MDY&p=D&yr=1&mn=0&dy=0&id=p36098118110&a=567627164

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