Tech Talk for Monday January 29th 2018

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Pre-opening Comments for Monday January 29th

U.S. equity index futures are lower this morning. S&P 500 futures were down 7 points in pre-opening trade.

Index futures were virtually unchanged following release of economic news at 8:30 AM EST. Consensus for December Personal Income was a gain of 0.3% versus an increase of 0.3% in November. Actual was a gain of 0.4%. Consensus for December Personal Spending was an increase of 0.5% versus a gain of 0.8% in November. Actual was an increase of 0.4%.

Much of the early weakness in index futures is attributed to overnight weakness in Apple. The stock dropped $1.22 to $170.29 on reports of a production cut of its iPhone X.

Dr. Pepper Snapple jumped $37.35 to $133.00 on merger news with Keurig Green Mountain.

Transocean gained $0.01 to $11.17 after RBC Capital raised its target price to $13 from $11.

Starbucks eased $0.48 to $57.51 after Bernstein downgraded the stock to Market Perform from Outperform.

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/01/26/stock-market-outlook-for-january-29-2018/

Note seasonality charts on the Health Care sector, New Orders for Capital Goods, World Imports of Goods, World Imports of Goods, Canadian Consumer Prices, Mortgage Interest Costs and Oil and Gas Exploration & Production Index.

 

Wolf on Bay Street

Guest on Wolfgang Klein’s show on Toronto 640 on Saturday

https://globalnews.ca/toronto/program/the-wolfgang-klein-show/

 

Wall Street Raw Radio

SATURDAY, JANUARY 27, 2018 – WITH HOST, MARK LEIBOVIT

GUESTS INCLUDE: DON VIALOUX (EQUITYCLOCK.COM), HARRY BOXER (THETECHTRADER.COM) AND SINCLAIR NOE (EATTHEBANKERS.COM).

https://tinyurl.com/y9dkerx4

 

The Bottom Line

Once again, several broadly based U.S. equity indices reached all-time highs. Traditional seasonally strong sectors (e.g. Consumer Discretionary, Industrials, Technology and Materials) continued to lead the market higher. In addition, seasonal influences change to Positive from Neutral in February. However, medium term technical indicators for the S&P 500 Index, NASDAQ Composite Index and Dow Jones Industrial Average remain overbought

Energy, Oil Services and Metals sectors continue to outperform U.S. equity indices. They have recovered strongly since mid-December when they entered into their period of seasonal strength lasting until at least the end of February. Continuing weakness by the U.S. Dollar Index last week to a three year low corresponding with a breakout by the CRB Index to a three year high adds to their prospects. Look for continuing outperformance by these sectors on both sides of the border. Buy on weakness.

The TSX Composite Index reached a short term peak four weeks ago. Last week, the Index completed a short term double top pattern implying flat to lower prices into February. Weakness in the U.S. Dollar Index (and corresponding strength in Canadian Dollar) are the main reason for underperformance relative to the S&P 500 Index. Concern about NAFTA negotiations, changing real estate purchase laws and rising interest rates also are issues.

 

Economic News This Week

December Personal Income to be released at 8:30 AM EST on Monday is expected to increase 0.3% versus a gain of 0.3% in November. December Personal Spending is expected to increase 0.5% versus a gain of 0.6% in November.

January Consumer Confidence Index to be released at 10:00 AM EST on Tuesday is expected to increase to 123.4 from 122.1 in December.

State of the Union Address by President Trump is made at 9:00 PM EST on Tuesday.

January ADP Employment Report to be released at 8:15 AM EST on Wednesday is expected to show a decline to 195,000 from 250,000 in December.

Canadian November Real GDP to be released at 8:30 AM EST on Wednesday is expected to increase 0.4% versus no change in October.

January Chicago PMI to be released at 9:45 AM EST on Wednesday is expected to drop to 64.0 from 67.6 in December.

FOMC Meeting Announcement to be released at 2:00 PM EST on Wednesday is expected to leave the Fed Fund rate unchanged.

Weekly Jobless Claims to be released at 8:30 AM EST on Thursday are expected to increase to 235,000 from 233,000 last week.

January ISM Index to be released at 10:00 AM EST on Thursday is expected to dip to 58.7 from 59.7 in December

December Construction Spending to be released at 10:00 AM EST on Thursday is expected to increase 0.5% versus a gain of 0.8% in November.

January Non-farm Payrolls to be released at 8:30 AM EST on Friday is expected to increase to 176,000 from 148,000 in December. January Private Non-farm Payrolls are expected to increase to 172,000 from 146,000 in November. January Unemployment Rate is expected to remain unchanged from December at 4.1%. January Average Hourly Earnings are expected to increase 0.3% versus a gain of 0.3% in December

January Consumer Sentiment Index to be released at 10:00 AM EST on Friday is expected to increase to 95.0 from 94.4 in December

 

Earnings News This Week

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Observations

Technical action by individual S&P 500 stocks remained bullish last week. Number of stocks breaking resistance totaled 36 while number of stocks breaking support totaled 10. Number of stocks trading in an uptrend increased to 351 from 342, number of stocks trading in a neutral trend decreased to 41 from 45 and number of stocks in a downtrend decreased to 108 from 113 The Up/Down ratio increased last week to (351/108=) 3.25 from 3.03

U.S. economic news this week focuses on the January ISM report released on Thursday and the January employment report released on Friday.

Canadian economic news this week focuses on November GDP report released on Wednesday

Fourth quarter earnings reports starts to flow quickly this week. 5 percent of S&P 500 companies have reported quarterly results to date. Focus this week remains on reports by major U.S. banks. Twenty eight S&P 500 companies are scheduled to report (including four Dow Jones Industrial stocks)

Medium term technical indicators in the U.S. (Percent of stocks trading above their 50 day moving average, Bullish Percent Index) remain at intermediate overbought levels, but have yet to show technical signs of rolling over. In contrast, medium term technical indicators in Canada have rolled over and are trending down.

Short term technical indicators for equity markets and most sectors in the U.S.(short term momentum, above/below 20 day moving average) generally are overbought. Short term technical indicators for equity markets and most sectors in Canada have rolled over and turned down.

Seasonal influences on a wide variety of U.S. equity indices and economic sensitive sectors tend to change at the end of January from Neutral to Positive. See chart below.

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Seasonal influences by TSX also are positive at this time of year. See chart below

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Fourth quarter results released by S&P 500 companies to date have been encouraging.

24% of S&P 500 stocks have reported to date. 76% reported higher than consensus earnings and 81% reported higher than consensus revenues. Another 125 S&P 500 stocks and 10 Dow Jones Industrial stocks are scheduled to release quarterly results this week.

The outlook for S&P earnings and sales remains positive: According to FactSet, fourth quarter earnings are expected to increase 12.0% including one time write downs related to the tax bill on a 7.0% increase in sales (up from 6.9% last week). Estimates beyond the fourth quarter of 2017 were revised higher again mainly due to changes in U.S. corporate tax laws. First quarter 2018 earnings are expected to increase 16.0% (up from 15.2% last week) on a 7.1% increase in sales. Second quarter 2018 earnings are expected to increase 16.0% (up from 15.0%) on a 7.2% increase in revenues (up from 7.1%). Third quarter earnings are expected to increase 17.3% (up from 16.3%) on a 5.9% increase in revenues. Fourth quarter 2018 earnings are expected to increase 28.2% on a 4.6% increase in revenues. For all of 2018, earnings are expected to increase 16.3% on a 6.0% increase in sales.

Short term political uncertainties remain, including North Korean “sabre rattling”, struggling NAFTA negotiations, possibly another shut-down of the U.S. government and increased scrutiny by special council on Russia’s influence on the Presidential election

Earnings and revenue prospects beyond the fourth 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 16% in 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 are translated into U.S. Dollars. For example, a U.S. based company with 50% of its earnings and revenues coming from international operations will see earnings and revenues increase by 7% from foreign currency translation alone following a 14% fall in the U.S. Dollar Index from its high at 103.82 in January 2017. The U.S. Dollar Index averaged 100 in the fourth quarter of 2016 and 101 in the first quarter of 2017. Weakness again last week to below the 89 level likely will encourage analysts to raise their 2018 earnings and revenue estimates again.

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Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for January 26th 2018

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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.

 

S&P 500 Index gained another 62.57 points (2.23%) last week. The Index remains above its 20 day moving average. Short term momentum indicators are trending up.

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Percent of S&P 500 stocks trading above their 50 day moving average increased last week to 84.00 from 81.60. Percent remains intermediate overbought.

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Percent of S&P 500 stocks trading above their 200 day moving average increased last week to 82.80 from 79.60. Percent remains intermediate overbought.

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Bullish Percent Index for S&P 500 stocks increased last week to 82.80 from 81.60 and remained above its 20 day moving average. The Index remains intermediate overbought.

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Bullish Percent Index for TSX stocks dropped last week to 68.80 from 70.00 and dropped below its 20 day moving average. The Index remains intermediate overbought and has started to roll over.

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TSX Composite Index dropped 114.24 points (0.70%) last week. Intermediate trend changed to down on Thursday on a move below 16,229.26 (Score: -2). Strength relative to the S&P 500 Index remains Negative (Score: -2). The Index dropped below its 20 day moving average (Score:-1). Short term momentum indicators are trending down (Score: -1). Technical score dropped last week to -6 from 0.

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Percent of TSX stocks trading above their 50 day moving average dropped last week to 56.20 from 59.50. Percent remains intermediate overbought and showing signs of rolling over.

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Percent of TSX stocks trading above their 200 day moving average slipped last week to 62.40 from 63.64. Percent remains intermediate overbought and trending down.

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Dow Jones Industrial Average gained 544.99 points (2.09%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. The Average remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

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Bullish Percent Index for Dow Jones Industrial stocks was unchanged last week at 90.00 and remains below its 20 day moving average. The Index remains intermediate overbought and rolling over.

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Bullish Percent Index for NASDAQ Composite Index increased last week to 69.78 from 69.31 and remained above its 20 day moving average. The Index remains intermediate overbought.

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NASDAQ Composite Index added 169.49 points (2.31%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index turned Positive. The Index 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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Russell 2000 Index added 10.43 points (0.65%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Negative. The Index remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at 0.

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Dow Jones Transportation Average dropped 179.66 points (1.59%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Negative from Positive. The Average remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to 0 from 6

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Australia All Ordinaries Composite Index added 45.40 points (0.74%)\ 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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Nikkei Average dropped 176.66 points (0.74%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Negative from Neutral. The Average remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score slipped last week to 0 from 2.

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Europe iShares gained $0.85 (1.70%) 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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Shanghai Composite Index added 70.27 points (2.01%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index improved to Positive from Neutral. The Index 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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Emerging Markets iShares gained $1.64 (3.25%) 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 remains last week at 6.

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Currencies

The U.S. Dollar Index plunged 1.48 (1.64%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average. Short term momentum indicators are trending down.

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The Euro gained 2.01 (1.64%) last week. Intermediate trend remain up. The Euro remains above its 20 day moving average. Short term momentum indicators are trending up.

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The Canadian Dollar gained U.S.1.16 cents (1.45%) last week. Intermediate trend remains Neutral. The Canuck Buck remains above its 20 day moving average. Short term momentum indicators are trending up.

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Japanese Yen gained 1.76 (1.95%) 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 added 2.82 (2.03%) 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

Daily Seasonal/Technical Commodities Trends for January 26th 2018

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Green: Increase from previous day

Red: Decrease from previous day

* Excludes adjustment from rollover of futures contracts (as happened last week)

The CRB Index gained 5.02 points (2.57%) last week to a three year high. 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 remained last week at 4.

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Gasoline added 6.5 cents per gallon (3.49%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. Gas remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

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Crude Oil gained $2.83 per barrel (4.47%) last week. Intermediate trend remains up. 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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Natural Gas slipped $0.01 (0.31%) after futures contracts were rolled over. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. “Natty” remains above its 20 day moving average. Short term momentum indicators have turned down. Technical score slipped last week to 4 from 6.

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S&P Energy Index gained 8.58 points (1.52%) 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 are trending down. Technical score slipped last week to 2 from 4.

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Philadelphia Oil Services Index added 2.44 points (1.52%) 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 are trending down. Technical score dropped last week to 2 from 4.

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Gold added $19.00 per ounce (1.43%) last week. Intermediate uptrend was confirmed on Thursday when Gold moved to an 18 month high. Strength relative to the S&P 500 Index remains Neutral. Gold 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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Silver gained $0.40 per ounce (2.35%) last week. Intermediate trend changed to up from down. Strength relative to the S&P 500 Index remains Neutral. Silver remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased to 4 form -2.

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AMEX Gold Bug Index added 6.43 points (3.27%) last week. Intermediate trend changed to up from neutral on a move above 205.35. Strength relative to the S&P 500 Index remains Neutral. The Index remained 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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Platinum slipped $1.70 (0.17%) last week. Intermediate trend changed to up from neutral. Relative strength remains Positive. Trades above its 20 day MA. Momentum: Up

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Palladium dropped $13.35 per ounce (1.22%) last week. Trend remains up. Relative strength changed to Negative from Neutral. Dropped below its 20 day MA. Momentum: Down

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Copper added $0.01 per lb (0.31%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained Negative. Copper 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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BMO Base Metals ETF slipped $0.03 (0.23%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Negative from Positive. Units remained above their 20 day moving average. Short term momentum indicators are trending down. Technical score slipped last week to 0 from -2.

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Lumber added 7.30 (1.52%) last week. Intermediate trend remains up. Relative strength remains Positive. Trades above its 20 day moving average. Momentum is up.

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Grain ETN gained $0.58 (2.36%) last week. Trend changed to neutral from down. Relative strength changed to Neutral from Negative. Units moved above their 20 day moving average. Short term momentum indicators are trending up. Technical score increased to 2 from -2.

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Agriculture ETF added $1.43 (2.22%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Neutral. Units remain above their 20 day moving average. Short term momentum indicators have turned up. Technical score increased last week to 4 from 2.

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Interest Rates

Yield on 10 year Treasuries increased 2.5 basis points (0.95%) last week. Intermediate trend remains up. Yield remains above its 20 day moving average. Short term momentum indicators are trending up.

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Price of the long term Treasury ETF added $0.53 (0.43%) last week. Intermediate trend remains up. Units remain below their 20 day moving average.

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Volatility

The VIX Index slipped 0.17 (1.51%) last week. Trend remains down. The Index remains above its 20 day moving average.

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Sectors

Daily Seasonal/Technical Sector Trends for January 26th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

StockTwits Released on Friday @EquityClock

Technical action by S&P 500 stocks to 10:00: Bullish. Breakouts: $AJG $RHI $INTC $HIG. Breakdown: EXPD

Intel $INTC, a Dow Jones Industrial stock moved above $47.64 to an all-time high extending an intermediate uptrend.

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Dollarama $DOL.CA moved above $166.50 to an all-time high extending an intermediate uptrend.

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Pfizer $PFE, a Dow Jones Industrial stock moved above $35.35 to an all-time high extending an intermediate uptrend.

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Fertilizer ETF $SOIL moved above $10.94 to a 3.5 year high extending an intermediate uptrend.

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Bombardier $BBD.B.CA moved above $3.24 to a 3 year high on favourable trade panel ruling extending an intermediate uptrend.

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Chart of Mortgage Interest Cost a big standout in today’s Canada CPI report — largest annual increase since 2008. #CDNecon #CAD $STUDY

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US Durable Goods up 22.9% (NSA) in December, short of 26.7% average increase. #Manufacturing #Economy $MACRO

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Canada CPI softens in December but still manages to close the year inline with historical average trend, up 1.9%

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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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18 Responses to “Tech Talk for Monday January 29th 2018”

  1. dutchcanuck Says:

    Patriot One Tech PAT.V
    Breakout this morning. Neil/Ab no sooner said than done.
    Bought another few shares.

  2. Ron/BC Says:

    BMO.to (Bank of Montreal) broke out above its previous high of $102.26 recently and ran up to $105.55 and has now pulled back to the $102 area breakout level again in classic fashion. Still not tagging the low $102 level but getting there. This CD bank stock was the last of the big banks to breakout. As the long term chart shows the big CD Banks are not immune from long,steep selloffs. Meanwhile back on the ranch,price is approaching support of $102.26.

    http://stockcharts.com/h-sc/ui?s=BMO.TO&p=D&yr=2&mn=0&dy=0&id=p48769257996&a=568088253

    http://stockcharts.com/h-sc/ui?s=BMO&p=D&yr=7&mn=0&dy=0&id=p77807882600&a=399446735

  3. Sandra Says:

    Ron/BC: EMA.TO

    Hope you did not buy it.
    Seems like it still wants to go down further.

  4. Sandra Says:

    Anybody looking at TECK.B/TO? Only one on my list going up.

  5. Ron/BC Says:

    Sandra
    I insist on believing what I see, not what I or others think. Ever hear the expression “Don’t believe everything you (or others) think.” No I didn’t buy any of the Utility stocks or ETFs as they did not breakout,yet. And even then I would insist on a breakout with some conviction. I did buy T.to as it broke its downtrendline and poked its nose above the breakdown price of $47 but it did not hold so I dumped the stock the last time it bounced back above $47 as it did not perform as I expected. Utility stocks are not likely to fair well with rates rising still and likely in the future. But I’ll watch them for opportunities regardless. I should add the banks are not acting bullish now even with rates rising. Not a good sign……….

    http://stockcharts.com/h-sc/ui?s=EMA.TO&p=D&yr=2&mn=0&dy=0&id=p28689338212&a=569503889

  6. Bernie Says:

    10 shared traits of value investors:
    http://www.moneysense.ca/save/investing/successful-value-investor/

  7. Ron/BC Says:

    FTS.to (FORTIS) tagged important price support this morning at $42.50 as this was the 2016 high that saw a breakout in March of 2017 and was successfully tested in May. So important and significant support that does need to hold to remain healthy. The stock is very oversold and the price bar presently is showing a long tail suggesting buyers getting long the stock at this support level. No buy signals yet but looking promising……think like a sniper,not a cowboy.

    http://stockcharts.com/h-sc/ui?s=FTS.TO&p=D&yr=2&mn=0&dy=0&id=p45318310733&a=505251651

  8. Bernie Says:

    Interesting way to add Canadian dividend stocks to ones portfolio. The “Safer Canadian Dogs” strategy did quite well in 2017.

    “Find an edge when investing in TSX ‘dogs’ strategy”
    http://www.moneysense.ca/save/investing/stocks/find-an-edge-when-investing-in-tsx-dogs-strategy/

  9. JP/BC Says:

    Bernie:

    Point number 3 says that one must have the ability to do in depth fundimental analysis. I have come to believe that if one can’t do proper technical analysis chances of success are slim over the long term. Because we are 9 years into a bull market it’s easy to believe that most anyone can be a stock picker by looking at a few fundimentals. Back during the last crash in 2008 the fundimentals on many familiar large cap stocks looked quite good, but the price still dropped by 30, 40, or 50 percent. Only by looking at the technicals could you have saved yourself from major losses. I worry that the average investor is being setup for a major shock when the market turns and the fundimentals don’t matter as much as negative market sentiment.

    I hadn’t heard of the Kelly Criterion. It would be useful to know how much money to allocate to each stock based on risk level.

  10. Mick/NV Says:

    I haven’t read Bernie’s article but the purpose of fundamental analysis is to try and determine how well the company is doing/has done by reviewing the associated financial statements with regards to revenue/profit/debt/cashflow/dividends etc. The intent is to give an ‘investor’ an overview on whether a particular company would be a good investment over time. Technical analysis can give someone an idea on where a good entry/exit points may be, but it won’t give you a perfect entry/exit point, unless extremely lucky you will never buy at the lowest point or sell at the highest point, despite what one might see on tv when analysts draw lines for the bottom point to the top point and say how well things work out, this is very easy to do well after the fact, very difficult to do in real time. Neither fundamental/or technical analysis is perfect, same as investing/trading, it is whatever the person is comfortable with. As to noting the financial crisis way back, here is a price chart of some of the companies mentioned the last few days. Even if buying at the peak in 2007 and holding, one would have doubled their money thru today. The market goes up more than it goes down, but tends to drop quicker than it tends to rise.

    http://schrts.co/r5EsW5

  11. Bernie Says:

    JP/BC,

    Re: #9
    That may be but losses are only realized when securities are sold. I didn’t even know what technical analysis was in June 2008 when I got rid of my financial advisor and went DIY with dividend growth investing. My plan was to buy and hold unless there were dividend cuts. I had two during the downturn. From peak (Aug 2008) to bottom (Feb 0009) my portfolio was down just shy of 30% but I continued to add in monthly with new money and dividend income. I was back to even in Mar 2010.

    If ones goals are shorter term, ie; beat the market, then I’d say yeah set a line in the sand and sell before your paper loss grows. I agree the market is quite lofty right now but this easy strategy and the BTSX strategy its based on are still good bets to beat the TSX long term and to add blue chip Canadian dividend stocks when they’re cheaper than others in the TSX60.

  12. Bernie Says:

    JP/BC,

    Re: #11
    Sorry my 2nd paragraph was more about the “Safer Canadian Dogs” strategy I linked in my #8. I got a little carried away.

  13. JP/BC Says:

    Bernie and Mick:

    I was at a TD Waterhouse investment seminar about 5 years ago when the speaker said that you could take any major index of a developed nation and if you look at any 10 year period, even if you invested at low point, you would be in the black. I raised my hand and said ” What about the Nikkei?”. The speaker had to recant. Have a look at the chart of the Nikkei and see where you would be if you had bought the index in 1990 and hoped to retire on the proceeds 29 years later. I’m not saying that fundimentals are meaningless, but that even with good fundimentals prices can still fall for an extended period. Not many investors have the stomach to ride out a bear until it recovers. There’s also the point that the fundimentals of a good company will usually be reflected in the long term charts. Lastly, I wonder how much we can trust the reported fundimentals with even large corporations potentially cooking the books to make their company look healthier than it is? We know about all the stock buy-backs that has boosted prices in the past few years. Buy-backs can harm a company if it is at the expense of investment in future growth. I realize buy-backs will skew charts as well (technical analysis) but TA can tell you when to get out as trends change. My point is that companies have become less scrupulous over time. Look at the bad press Canadian banks and telecoms have recently had as they pressure their employees to dupe their customers into buying products they don’t need.

    Here is a Nikkei chart:
    http://dragonflycap.com/wp-content/uploads/2018/01/chartind1CRU-600×375.png

  14. Bernie Says:

    JP/BC,

    Point taken. Not everyone has the appetite or patience to be a dedicated long term value investor and yes, TA can be quite helpful if applied correctly. I certainly don’t have the “stomach” to hold non-dividend growth stocks long term for capital gains.

  15. DM/ON Says:

    JP/BC
    Danielle Park did what many should have done long before.
    This is the link to the article on her website

    https://jugglingdynamite.com/2018/01/26/fun-with-sp-500-snakes-and-ladders/

    Imagine the person retired during 2006 then, had to live through the “great recession”.
    This is why I appreciate efforts to do “more” than just “buy and hold” and re-balance.
    Market works on its time and we on our personal time and CLOCKS are NOT synchronized.

  16. JP/BC Says:

    Hi Bernie:

    Yes I have to admit that I don’t have the stomach to ride out a bear market that puts me heavily in the red, even if I own dividend stocks. I took some heavy losses when I finally gave up the fight in January 2009 and sold everything. It was impacting my health. Part of the reason I sold was because Michael Campbell’s Money talks show had on Bob Hoye who predicted that the market could continue to sell off until the total drop was 80%. He gave historic precidents for this which sounded logical at the time. Was I foolish for selling my blue chip, dividend paying companies? … probably. But then again, what if the US government had not bailed out the large financial institutions? Could there have been another 1929 scale crash? At the time it sure seemed possible. That is when I took a course in Technical Analysis. If I was going to be in the markets I needed an exit strategy.

    With you having been invested in the markets as long as you have, they would have to drop quite a bit before you would be in the red. On top of that you can depend on your dividends in all but the most extreme market environment. I envy your position.

  17. JP/BC Says:

    Bernie:

    I should add that although I had some Technical Analysis training in 2009 I have been too gun shy to trust putting as much money in the markets as I should have. I have made some money on real estate instead. I’m learning from Ron/BC new ways to mitigate risk using technical analysis.

  18. Bernie Says:

    JP/BC,

    Thanks for sharing your story! There were many many other investors like you who couldn’t take it anymore and exited the market in the 2008-09 crash. I might have been one too had I been retired at the time with no earned income or had I been invested in index funds or speculative securities or high beta non-dividend funds. Heck, I was still feeling the glow from releasing my underperforming advisor. It felt awesome to control my own destiny with a strategy I researched well before getting my feet wet. It was a little tough at first seeing my capital shrink but that feeling was offset from all the dividend income I received and was able to plow back into more stock at cheaper prices.

    I’m sorry you felt the pressure and got out of the market in 2009 JP. At least you were able to learn from the experience, get back some of the money you lost and re-arm yourself with a defensive plan for the “next time”.

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