Tech Talk for Friday March 9th 2018

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Pre-opening Comments for Friday March 9th

U.S. equity index futures were higher this morning. S&P 500 futures were up 16 points in pre-opening trade.

Equity indices moved higher following release of the February Employment Report at 8:30 AM EST. Consensus for February Non-farm Payrolls was 205,000 versus 239,000 in January. Actual was 313,000. Consensus for February Unemployment Rate was a slip to 4.0% from 4.1% in January. Actual was unchanged at 4.1%. Consensus for February Average Hourly Earnings was an increase of 0.3% versus a gain of 0.3% in January. Actual was a gain of 0.1%.

The Canadian Dollar added 0.29 to 77.83 cents U.S. following release of Canada’s February Employment Report at 8:30 AM EST. Consensus for February employment was a gain of 21,000 versus a drop of 80,000 in January. Actual was a gain of 15,400. Consensus for the February Unemployment Rate was unchanged at 5.9%. Actual was a drop to 5.8%.

JP Morgan has taken a more bullish stance on U.S. steel stocks. Akamai, U.S. Steel and Commercial Metals were upgraded. Target on Akamai was raised to $90 from $75. Target on US Steel was boosted to $69 from $48. Target on Commercial Metals was increased to $30 from $24. The steel ETF SLX is expected to open higher.

iShares South Korea ETF gained $0.94 to $74.99 following news of a meeting between President Trump and North Korea’s Kim.

Netflix gained $3.42 to $320.42 after Piper Jaffray raised its target price to $360 from $319.

Hasbro fell $3.38 to $90.00 and Mattel dropped $0.75 to $15.22 after Toys R Us announced plans to liquidate its U.S. operations.

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/03/08/stock-market-outlook-for-march-9-2018/

Note seasonality charts on Non-farm Payrolls, Initial Jobless Claims and the Insurance industry

StockTwits released yesterday @EquityClock

Technical action by S&P 500 stocks to 10:00: Quietly bullish. Breakouts: $ECL $PX $NRG $COO $ESRX. Breakdown: $CI

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Franco-Nevada $FNV, a TSX 60 stock, moved below $67.90 U.S. extending an intermediate downtrend.

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Editor’s Note: The stock responded to several target reductions by investment bankers.

Bond ETFs holding support, but negative setups suggest significant downside potential should support break. equityclock.com/2018/03/08/… $TLT $IEF

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Trader’s Corner

Daily Seasonal/Technical Equity Trends for March 8th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Daily Seasonal/Technical Commodities Trends for March 8th 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 March 8th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

S&P Momentum Barometer

The Barometer added another 4.00 yesterday to 44.80. It remains intermediate neutral.

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TSX Momentum Barometer

The Barometer added 2.99 to 35.51 yesterday. It remains intermediate oversold.

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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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34 Responses to “Tech Talk for Friday March 9th 2018”

  1. Larry/ON Says:

    Here comes the breakout thanks to the fantastic US jobs report. The Canadian jobs report for Feb was another failure with a large loss of full-time employment. You can see the US and Canadian economies going in different directions. Interest rate differentials will widen and US bank stocks and the rest of the US equity market will continue to outperform. I see a parade of guests on BNN talk about pulling money out of Canada to invest in the US. Trudeau and Morneau are sending us into a tailspin.

  2. Sandra Says:

    Larry/ON:
    Good if you are invested in US stocks.

    With all the negative news about Canadian economy where do you invest CDN $.
    Hard to swallow that markets south are mostly green and ours going no where. A $ up and a $ down not much happening here unless day trading.

  3. Larry/ON Says:

    Sandra – ZBK.to – Perfect time to buy. It is US banks non-hedged to CAD. CAD popped temporarily. You gain on US banks and you gain on currency if CAD drops. Of course you can lose on currency if you make a wrong prediction on currency direction. Follow David Rosenberg for CAD direction. If you want hedged for CAD it is ZUB. I only hold ZBK because I can’t hold USD in RESPs. Almost everything else I have is US equities. I have a big short on CAD.

  4. Larry/ON Says:

    Resistance – Anyone can see it on the chart for SPX at 2789. It is a great day today but we might have some back and forth with the 50 day on the downside at 2742. Markets don’t look technically overbought on the indicators. I just wonder if we will have some investor skittishness resulting in profit taking. I feel bipolar trying to trade between being a bull while being wary of being taken by surprise.

  5. dutchcanuck Says:

    Neil/AB
    Back from Disney World.
    Jeffrey Mandel, Dir bought 4300sh of COV at $5.19
    Do not own.

  6. Sandra Says:

    Ron/BC: EFN.TO

    A chart you shared sometime ago. What do you think of it today ?

    http://schrts.co/wksaEN

  7. Ron/BC Says:

    Sandra

    Very oversold but in a sharp downtrend that isnt bullish. Very sick puppy still…..

  8. Neil/Ab Says:

    Dutchcanuck
    Me too, in a sense.
    He’s lost a bit of money recently. Lol.

  9. Sherri Says:

    Armstrong on the DOW today:

    “The NASDAQ elected all four Weekly Bullish from the February low so we have it making new highs. The Dow is flirting again with the 25300 former Weekly Bullish it elected and a closing above 25315 today will keep the market in a position where we can still test resistance.

    We have NOT elected any Monthly Bearish and we have not elected any serious Weekly Bearish holding the third Reversal back at 23250. A Weekly closing above 26154 will signal we will challenge the January high of 26616.71.

    Keep in mind we are still within a Cycle Inversion. That means the last three events produced highs instead of alternating events. If March produced a high, even just a retest in the Dow, then obviously the Cycle Inversion is still in play. The Energy Models continue to rise and this is not implying a serious correction.

    February may have been simply a Knee Jerk Reaction Low. A correction would extend any consolidation/retest of the lows to April MAX!. Only electing the third Weekly Bearish in the Dow would imply of a max decline into July.

    So far, we play by the numbers ONLY. We have nothing to suggest a decline is yet underway. As stated previously, the first HALF of 2018 appeared to be choppy consolidation. We do not yet see this market runny away to the upside just yet.

    It does appear that the important turning point will be July and the second half of the year we should begin to see the trend emerge. Interest rates are still poised to move sharply higher. This will add confusing, but they will be the catalyst for change. German rates are still negative on the bunds and this is really just a bet against the Euro where they expect to get Deutsche marks. That trade will not work out. The trade will remain the move to the dollar.”

  10. bruce Says:

    tnx again Sherri……

  11. Larry/ON Says:

    Re: Armstrong – A lot of “cycle inversion” gobbledigook I suspect is masquerading as meaningful technical analysis. To say if the DJIA has a weekly close above 26154 it will retest the high of 26616 seems pretty obvious and meaningless as there is a sliver of space between those two points. I watched a market strategist on BNN who said the best thing he got from his business education at Harvard was the ability to spot the BS some technical analysts try to pass off as meaningful. What is a “Knee Jerk Reaction Low” and why does he use this term to describe what happened in February distinguishing it from the market behaviour that took place on other lows. What does he mean by “electing the third weekly bearish in the Dow.” What is this lexicon about “electing”? “The last three events produced highs instead of alternating events.” Am I the only person who needs a translation?

  12. Ron/BC Says:

    Here is a nice looking chart that seems easy to read. GUY.to is in a $4.00 to $5.25 multi month channel with a downtrendline from June/16 at $5.25 that is presently at the top of the multi month channel. A breakout over $5.25 would suggest a run up to $6.25 resistance for starters. OK volume as well for a $TSX stock. Actually there are a lot of bullish chart patterns out there now. Far more than I’ve seen in a long time.

    http://stockcharts.com/h-sc/ui?s=GUY.TO&p=D&yr=2&mn=0&dy=0&id=p57232143970&a=579408402

  13. Larry/ON Says:

    Armstrong Is A Convicted Felon With A History Of Misrepresentation

    CFTC violations
    In 1985 Armstrong was found to have violated Commodity Futures Trading Commission regulations by failing to register as a commodity trading advisor, failing to deliver required disclosure documents to clients, and failing to maintain proper records.[4] In 1987 one of Armstrong’s trading entities, Economic Consultants of Princeton Inc., was charged with failing to disclose a commission-sharing agreement, and another of his entities, Princeton Economic Consultants Inc, was charged with misrepresenting hypothetical performance results and omitting a required disclaimer in advertisements.[4] The penalties levied banned Armstrong and his companies from trading for 12 months, revoked their registrations, imposed cease and desist orders, and levied civil penalties totalling $50,000.[4]

    Criminal conviction

    Criminal conviction
    In 1999, Japanese fraud investigators accused Armstrong of collecting money from Japanese investors, improperly commingling these funds with funds from other investors, and using the fresh money to cover losses he had incurred while trading.[9] US prosecutors called it a $3 billion Ponzi scheme.[10] Allegedly assisting Armstrong in his scheme was the Republic New York Corporation, which produced false account statements to reassure Armstrong’s investors. In 2001, the bank agreed to pay US$606 million as restitution for its part in the scandal.[10]

    Armstrong was indicted in 1999, and was ordered by Judge Richard Owen to turn over $15 million in gold bars and antiquities bought with the fund’s money; the list included bronze helmets and a bust of Julius Caesar.[11][12] Armstrong produced some of the items, but claimed the others were not in his possession; this led to several contempt of court charges.[13] Armstrong was jailed for seven years under contempt of court, until Armstrong reached a plea agreement with federal prosecutors.[14] Armstrong admitted to deceiving corporate investors and improperly commingling client funds in a case that prosecutors said resulted in commodities losses of more than $700 million.[15] Armstrong was then sentenced to five years in prison.[11] He was released from Federal custody on September 2, 2011, after serving a total of 11 years in jail.[16][17]

  14. Sherri Says:

    #12 Ron/BC

    Thanks for the chart. Gold stock, hey? Their time will come, eventually…
    Me, my time has come to move on from this blog, I think. Just don’t have the time or
    energy anymore.

    Hope you are out enjoying a golf course somewhere today in this beautiful sunshine.

  15. Ron/BC Says:

    Sherri
    I didn’t golf today as it’s the weekend and I’m not big on sharing a golf course with the herd. Prefer the week when others are working etc. I did go to the range though and blasted a bunch of balls myself as my partner hasn’t been well and that’s something I’ve learned I can’t fix. Help yes,but not fix. But don’t disappear as we like to hear from you and many here enjoy and look forward to your Armstrong posts and appreciate your efforts in posting them. I’ve noticed over the last several years most have gone from this site and that fits with my theory that most end up losing money and throw in the towel and found something better to invest in that is more certain. I still haven’t met anyone that said investing in the stock market was a positive factor in their overall wealth over 20 to 50 years. Too many landmines out there and it only takes one to blow you up. I know even pushing the buy button is like putting my finger in a light socket,lol. So keep up the posting as many count on you for that info. Not everyone enjoys it but not everyone enjoys my posts and other’s posts either. To each his/her own. We can all pick and choose what we read and absorb. Nice breakout on XLK (Technology ETF)And I see there is a double top on ZUB.to (the Equal Weight U.S.Banks ETF Hedged to the CD$). It is outperforming a variety of other ETFs. Clearing $32.65 would be a breakout. Ya’ll come back now,ya hear!

    http://stockcharts.com/h-sc/ui?s=XLK&p=D&yr=2&mn=0&dy=0&id=p07899918806&a=579408531

    http://stockcharts.com/h-sc/ui?s=ZUB.TO&p=D&yr=3&mn=0&dy=0&id=p88512255903&a=579408696

  16. Ana Says:

    #14. Sherri,

    Thank you for your posts from Armstrong. It is good to get another point of view. I have even have a chart of the Dow now to try to follow what he is saying. Thank you to Ron/BC. I think he posted the chart and I of course, changed the indicators to candlesticks, the ones with the drama. 😀

    Please hang around and post when you can.

    My very short term trading charts tell me that we are over bought. However my charts are often early, but I have to follow them. Have tried to get more accurate, but when there is money being pumped into the market I am not sure you can get more accurate. The amount of movement upward, really take me by surprise.

  17. bruce Says:

    Sherri
    I also selfishly would like you to stay…….you seem to have a good grip on the markets…..

  18. Ron/BC Says:

    Ana
    Here is Monthly chart of the $SPX. I don’t recall posting another Monthly chart of this. The lower 20,50,10 Modified MACD along with the Modified MACD Histogram are helpful charts for long term investing with the trends. And the 12sma is good for showing price ride it in an uptrend and bump it in a downtrend. Not too much help for a day trader though,lol.
    The 2nd chart is a Weekly chart of the $SPX with the longer term Modified MACD 50,200,10 as it trends better than the shorter one for whatever reason without all the whipsaws. The Modified MACD Histogram of 50,200,50 needed a much longer divisor of 50 to remove 2 or 3 false breakdowns. The actual M.MACD line crosses signal faster then but are confirmed shortly after when the Histogram crosses over its zero line. And no I’m not drunk as I don’t drink and don’t take drugs. I may be crazy and don’t realize it but the charts are pretty even without the sexy red Candlesticks.

    http://stockcharts.com/h-sc/ui?s=%24SPX&p=M&st=1990-03-10&id=p62640251058&a=579408390

    http://stockcharts.com/h-sc/ui?s=%24SPX&p=W&st=1994-03-10&id=p32391901257&a=579408389

  19. Sherri Says:

    Thanks, Ron/BC, Ana, bruce. My ability to access these private blog updates can end at any time. Seems to be a glitch in the system that I am currently taking advantage of, to be honest, with some guilt. Here’s one from his free blog that I think is important. Hope I haven’t already posted it!

    https://www.armstrongeconomics.com/markets-by-sector/bonds/the-looming-debt-crisis-nobody-seems-to-look-at/

    Ron/BC – Sorry to hear that your partner hasn’t been well. I hope she feels better soon.

    I haven’t blown myself up, yet, but still after all this time, am affected by 2009. I have been in mostly cash for so long, I’m sure I’ll finally have the guts to invest right before the next big crisis hits!! Now that I’m working so much I don’t feel like I have the time to spend looking for and reading charts, so I am thinking of going the ETF way. Now it’s a matter of WHEN to buy 🙂 I am a bargain hunter, at heart, and I think that is a problem when you are trying to invest in the market! I see the breakout in XLK, that is bullish but also that it’s now overbought and a long way from its trendline, so that doesn’t make me want to buy it. A constant dilema! Thank you for your charts – they are always so easy to read…….Except for that Monthly $SPX – wow!! 😛

    bruce – I definitely DO NOT have a good grip on the markets, but thank you anyway 🙂

    Ana – thanks for your daily comments and your sense of humour. My sense of humour is what gets me through the day.

  20. Ron/BC Says:

    Sherri
    Well I agree about the overbought steep uptrends of the markets over the last couple of years. Tough to buy it at this late time in the bull market.The major low was March 9th nine years ago last Friday and no major pullback since. It’s like waiting at a trains stop to get on board and the train just doesn’t stop. Very odd we haven’t had typical selloffs along the way. The selloff into January 2016 wasn’t much of a selloff for the broad market and since then the uptrend has been very steep with the odd brief pullback that bounced back as fast as it sells off. And recently you see 200 to 400 point moves both up and down daily on the Dow with the broad market all over the place. But the long term trends are still up and many charts look more bullish than they have in awhile. ZUB.to looks good for a breakout and run up along with BAC that did breakout Friday. Questrade has a Growth Fund that has averaged close to 9% per year over the last 5 years. And it’s 26% CD, 26% U.S., 28% International & the rest Fixed Income with a little cash. Looks like a good one to be in. Their funds are all ETF combinations. I’m tempted to just drop my RIF cash on it and forget about all these charts bouncing off the walls and just enjoy life. Would like to see a descent correction first though to get a bit of a cushion to start.

  21. Ana Says:

    #19. Sherri,

    So we have been receiving the subscription updates? Many thanks for sharing these, we did not know how lucky we were!

    It is still a challenge at time for me to decipher his description of the anticipated movement of the market. It is frustrating when attempting to make a living from the market.

    Do not be so hard on yourself, it is so difficult when working full time.

    It takes a great deal of time to look at the market to decide on your position. Well, maybe for me it does, others might be smarter.

  22. Ana Says:

    # 18. Ron/BC

    Thank you for the charts. This is my long view for my trading.

    http://schrts.co/QU5CmN

  23. Larry/ON Says:

    Sherri – I apologize if I offended you by attacking Armstrong due to my inability to decipher him. I am guilty of being blunt when I should be more diplomatic. Maybe he is a great technician. I will now be quiet about forming opinions.

  24. Rol Lew Says:

    “It’s like waiting at a trains stop to get on board and the train just doesn’t stop.”

    Ron BC, in reality, I think, when the train does stop, e.g., Feb 4-12 & Mar 4-5, those who are on it get off in haste!, and those waiting on the platform to get on, change their minds, leave the station and call uber to take them home, where it’s warm & safe.

    http://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=0&mn=3&dy=0&id=p25598654662

  25. DougP Says:

    Larry, there is no need to apologize for your blunt commentary on Armstrong. In my view you were sharing some facts that few of us had bothered to investigate. I for one enjoyed reading them. And Sherri, I have always read your kind offering of Armstrong, noting that you invariably respond to a request from the blog. Stay with us. Most of us contribute little, though I suspect the bean counters of the TM website see a lot of traffic, and much of it is prompted by the blog. There are some terrific contributors, and their insight based on experience makes fine reading. I always browse it before going to my investment site.

  26. Ron/BC Says:

    Sherri
    Here are the Questrade Funds that are made up of ETFs. The Balanced Fund is a 60% Equity/40% Fixed Income Fund that has a good track record without a lot of drama. And for a little better return the Growth Fund is 80% Equity/20% Fixed Income. On a good correction I will likely be dumping my entire RIF cash into one of these funds as at the end of this year I have to take out a percentage of these funds so will want a steady income from it. But being you are a young punk with many working years ahead of you its good to start a fund like this and let it grow. You don’t have to trade stocks daily and it’s not good to trade for excitement like many do as that tends to end badly. I had a broker once that said most of his clients trade for the “RUSH”. So true………..

    http://www.questrade.com/portfolio-iq/portfolios/balanced-investor

  27. Ron/BC Says:

    Ana
    Here is what I see in the $SPX chart like yours. I’d use 3 months rather than 2 as everything is relative and 3 months gives more relative info. I would also use the Modified MACD 20,50,1 as well as the Modified MACD Histogram that is especially timing when it crosses back above the zero line. And even more important is you don’t see many false crossovers with the longer Modified MACD settings that with the whippy regular MACD. Notice your standard MACD gives lots of false buy signals such as the late February cross over that failed. This longer term Modified MACD smooths out the data better and isn’t so jumpy. And the same with the Modified MACD Histogram cross overs at the zero line. Very timely especially with the buy signals and very few false buy signals. But as always one of the most dependable buy signals is the RSI 8 when crossing back above the 30 line. On a less volatile market I’ve often used RSI 4 as well and RSI 6. As long as they give buy signals now and again and catch price lows without giving too many signals all of the low settings work. But they will also give buy signals in a downtrend and then after a dead cat bounce for a day or so will see price plunge to new lows. Typical of short term oscillators. Some markets that are very volatile I’ll use the RSI 21 and it smooths out the volatility and false cross overs. The pattern here is a Symmetrical Triangle that just broke out Friday. This has also been confirmed by the M.MACD and M.MACD Histogram. The only thing left to see to confirm everything technically bullish is price to clear the February 27th high of 2789.15 for a price breakout. And price is king so that is the last thing to see. Will likely see that Monday morning but it also needs to clear and then hold that price point on the close as well. And for super fussy traders price also needs to hold above that breakout price for a couple of days. So that’s what these off the wall eyes see fwiw………….

    http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=3&dy=0&id=p84396170196&a=582707024

  28. Ron/BC Says:

    Here is along term Daily chart of the Dow. As one can see price is about 7000 points above its previous breakout support level at 18351 as well as its uptrendline from 2009. I guess everyone noticed last Friday was the 9th anniversary of the low in the market. Doesn’t mean it can’t go higher ‘short term’ but don’t expect this to continue up forever!

    http://stockcharts.com/h-sc/ui?s=%24INDU&p=D&st=1975-12-15&en=(today)&id=p55360692944&a=579408295

  29. Larry/ON Says:

    DougP – One thing I would say is that if I ever voice a financial opinion that doesn’t make sense I will always invite anyone to prove me wrong because they may do me the favour of saving me money. I wish to check my ego at the door when it comes to investing and I am willing to change my views at any time if the evidence is there (that mindset has really helped me). I have learned whatever I know usually the hard way and thankfully earlier on when I had less money to lose. I always want to improve and I have learned a lot from others on this site with much thanks.

  30. Sherri Says:

    Ron/BC
    Thanks for the suggestions and the Questrade link. Something to consider for sure. I like T.ZBK, unhedged. I almost bought the breakout in November but chickened out – seriously, I’m in the wrong business.

    Ana
    Thanks for the kind words. Yes, I am having difficulty adjusting to working outside of the house, and at my “advanced” age, I don’t have the energy I used to have to get things done!

    As far as Armstrong goes, he is often hard to understand and follow. One really has to read his references on his blog about his methods, to even have a hope of getting it. It’s all based on Socrates, his computer model, which he’s been working on for decades. It collects data from around the world, regarding money flows, and uses it to forecast change in trends. Yes, he was in jail for many years on contempt of court charges, but there are a lot of details about that time in his life which aren’t in the mainstream press. After reading a lot about it, I’ve decided to give him the benefit of the doubt.
    All I know, is when he says the top is in, I’m getting out! 🙂

  31. Sherri Says:

    #23 Larry/ON

    Dont’ worry about it. I just post it because others have asked for it.

  32. Larry/ON Says:

    Re: 28 – To give you a true picture of how high the Dow really is you need to adjust for inflation and put it on a logarithmic scale. You can also account for GDP growth. I find charts but I am not good at attaching them. Anyone interested show have a look at the historical charts at macrotrends.net. The DJIA to GDP ratio is currently matching the high levels it was at in the 1960’s. The SP500 inflation adjusted is 15% above the level it was at in 2000. My research is superficial but anyone making judgements needs to look at these factors. I think I will spend some time looking at this now.

    http://www.macrotrends.net/2324/sp-500-historical-chart-data

  33. Neil/Ab Says:

    Tsx
    Could be an interesting week coming up.
    It has been fighting the, now, resistance of the 200ma, and the fast falling 50ma will soon come into play. I would think, if it can’t break 15700 this week, we are then looking at a lower high which will bring 1500 back into play. I have a hard time thinking of the catalyst which would take it above 15700. It is really getting that ‘sick puppy’ look about it.

  34. Arvind Says:

    Find it hard to invest in Canadian stocks. I had a good year in my US portfolio in 2017 and a lousy (10.5%) in Canadian portfolio. I am just a middle of the road investor and I think I will be moving most of my dineros to US market naked to the currency risk.

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