Tech Talk for Tuesday April 10th 2018

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Pre-opening Comments for Tuesday April 10th

U.S. equity index futures were higher this morning. S&P 500 futures were up 28 points in pre-opening trade. Index futures are responding to news that China is willing to negotiate on trade.

U.S. equity index futures were virtually unchanged following release of the March Producer Price Index at 8:30 AM EDT. Consensus was an increase of 0.1% versus a gain of 0.2% in February. Actual was an increase of 0.3%. Excluding food and energy, consensus for the March Producer Price Index was an increase of 0.2% versus a gain of 0.2% in February. Actual was an increase of 0.3%.

The Canadian Dollar added 0.36 to 79.03 cents U.S. after release of Canada’s March Housing Starts report. Consensus was 218,000 versus 229,700 in February. Actual was 225,200.

L Brands (LB $38.06) is expected to open lower after MKM Partners lowered their target price to $42 from $48.

Netflix added $1.08 to $296.80 after JP Morgan raised its target price to $328 from $285.

Navistar (NAV $33.51) is expected to open lower after JP Morgan lowered its target price to $38 from $45.

Cummins (CMI $156.50) is expected to open lower after JP Morgan lowered its target price to $164 from $176.

Nvidia gained $7.84 to $223.25 after Morgan Stanley upgraded the stock to Overweight from Equal Weight.

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/04/09/stock-market-outlook-for-april-10-2018/

Note seasonality chart on the Baltic Dry Index

Observation

At approximately 2:00 PM EDT yesterday, news that the FBI had raided President Trump’s personal lawyer under the guidance of the Special Prosecutor. U.S. equity markets responded accordingly. The S&P 500 Index plunged 40 points thereafter.

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StockTwits Released Yesterday @EquityClock

Technical action by S&P 500 stocks to 10:00: Nil. No intermediate breakouts or breakdowns.

Russian ETF $RSX broke below $20.91 and $20.36 following U.S. sanctions.

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Corn ETN $CORN moved above $18.17 extending an intermediate uptrend.

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Merck $MRK, a Dow Jones Industrial stock moved above $55.85 completing a double bottom pattern on positive news on Keytrada cancer trials.

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Monsanto $MON moved above $123.63 on news that the Justice Dept. to allow acquisition by Bayer.

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Fairfax Financial $FFH.CA moved above $660.00 setting intermediate uptrend.

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Trader’s Corner

Daily Seasonal/Technical Equity Trends for April 9th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Daily Seasonal/Technical Commodities Trends for April 9th 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 April 9th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Keith Richards’ Blog

What to hold when stocks fall. Following is a link:

http://www.valuetrend.ca/what-to-hold-when-stocks-fall/

 

S&P 500 Momentum Barometer

The Barometer added 2.60 to 29.20 yesterday. It remains intermediate oversold.

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TSX Momentum Barometer

The Barometer added 2.07 to 44.63 yesterday. It remains intermediate neutral.

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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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27 Responses to “Tech Talk for Tuesday April 10th 2018”

  1. Sandra Says:

    Ana:
    Hi! Do you agree that today’s S&P gap up will be filled? Thanks

  2. Sandra Says:

    HVU.TO :
    I guess we will not see the set up today with bullish sentiment.

  3. Ana Says:

    Of course, this is a chart from Ron/BC. Thank you, Ron/BC.

    http://schrts.co/t5LJcM

    Makes more sense to follow the Dow at the moment.

    Have you noticed the $VIX, Sandra?

  4. Ana Says:

    So this is another chart from Ron/BC. Thank you Ron/BC.

    http://schrts.co/uXC7Lg

    Ron, if you are around, would you please throw in another resistant line, joining 2801.90 to 2672.08? Thank you.

    This should be the top resistant line. So we are at the end of the triangle.

    “Do you feel lucky”?

  5. Ron/BC Says:

    For those that subscribe to Questrade there is a Webinar on investing starting at 9am Pacific Time or noon Eastern time. I’m sure one could call them and ask for the link.

  6. Ron/BC Says:

    Ana
    Here is a 3 month chart of the $SPX with the added downtrendline at resistance. Not sure if that’s all you wanted to see on this chart as I can adjust it. I did make it a 5 month chart as I like to see what’s behind recent price action.

    http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=5&dy=0&id=p81748562471&a=582707024

  7. Ana Says:

    #6. Ron/BC

    Thank you, that is exactly what we need for another resistance line.

    http://schrts.co/DsJkhX

    I decorated the chart. Hope you like it! 😀 More drama!

  8. Ron/BC Says:

    Ana
    Very pretty. I didn’t think you liked too much data across the chart. Here is the Dow 5 month chart with a ratio chart above showing the Dow losing strength compared to the $SPX. Also what is most important is while everyone is watching to see if price can clear the downtrendline, the 24500 mark is the resistance point to watch for starters. That is the early March closing low on that bullish Key Reversal bar that saw the Dow rally sharply 900 points to 25400. This 24500 price was tested again March 19th and saw it fail there the next day and plunge to the Feb lows. Price chopped sideways and then ran up to this now resistance of 24500 last Thursday April 5th and backed off again. And see today price hit that price point and back off. Once 24500 is cleared the odds of clearing the downtrendline are very high. You can see it easier if you change the bars from OHLC to Solid line. Always nice to view a closing prices only chart to see what the professionals did at the close of the day.

    http://stockcharts.com/h-sc/ui?s=%24INDU&p=D&yr=0&mn=5&dy=0&id=p28126244157&a=587927219

  9. Sandra Says:

    Ana: yes, watching VIX.
    Can you trade DOW futures on TSX?
    Thanks!

  10. Ron/BC Says:

    Here is VXX on the NYSE. This is like the flip side of the DOW. Note the early March low of 43 that then broke down after testing it for 3 days in a row and was tested again on a rebound March 19th and failed and then finally clear it and price rallied to new 53.82. That 43 level is support. Also note both the VXX and the DOW have seen price show a lot of respect for the 50ema both as resistance when below and support when above.

    http://stockcharts.com/h-sc/ui?s=VXX&p=D&yr=0&mn=5&dy=0&id=p41142140104&a=586283475

  11. Ron/BC Says:

    Bernie
    Thanks for the MAW 120 chart yesterday. I did figure out there is a MACD that is changeable and in exponential fashion like MACD was intended. And I put on a 50ema that does show price respecting that moving average exceptionally well on a WEEKLY chart. That’s all one would need along with watching basic price support. One can’t trade funds often anyways and being it is a long term investment the 50ema along with major price support along the way makes it a good chart to follow. Note the price point of $26 in May 2017 and then a pullback to the April low of 23.70 which was also the 50ema. Then a rally up to 27.70 last January and a pullback to that 26 breakout point support again. Price has rallied to a new high of 28.25 so has shown respect for breakout point supports and has hit a new high. Note the 50ema is at the price support price of 26. That is where to add or get on board technically. Very nice price action and continues to find support at previous breakout points and the rising 50ema. Also note the lower 200ema rising inline together with the 50ema like a set of train tracks. So I’ve saved this to my desk top and can bring it up anytime without having to change settings. A person could just buy at the 50ema or previous breakout points and an old fashioned way to trade an ‘investment’ without over trading is to sell when price ‘stretches” way above the 50ema. And get back on again when price tests the 50ema again. It works well on a fund or stock or etf that has price action like this as it trades smoothly as it is diversified and a Weekly chart smooths it out well and the 50ema smooths out the data even more. Nice to see the consistency of it even though it is a MED-High Risk GLOBAL fund oddly enough. Thanks again.

    https://www.barchart.com/etfs-funds/quotes/MAW120.CF/technical-chart?plot=LINE&volume=0&data=WO&density=X&pricesOn=1&asPctChange=0&logscale=0&startDate=2000-01-03&endDate=2018-04-06&daterange=specific&indicators=MACD(20,50,10);EXPMA(50);EXPMA(200);MACD(50,200,20)&sym=MAW120.CF&grid=1&height=500&studyheight=100

  12. Ron/BC Says:

    Re:#11
    You will have to add the 50ema by selecting INDICATORS as the chart wont hold all the indicators when transferring it seems.

  13. Ron/BC Says:

    Here is the link to Mawer 120 Global Equity Fund info.

    http://www.mawer.com/funds/explore-funds/global-equity-fund/

  14. Bernie Says:

    Ron/BC,

    Re: #11-12
    Thanks. As I mentioned last night all the chart indicators transfer over if the entire address is copied and pasted rather than just clicking on the link with a mouse. You make a very interesting observation about how the price respects the 50EMA. I see the price hasn’t breached the 50EMA since a two month stretch in Aug to Oct 2011. Since then its acted almost like a springboard. It does make a lot of sense to wait on the price before buying but I’m not in the trading camp on mutual funds. There are no commissions when buying and selling mutual funds via BMO InvestorLine but if you sell before holding it for 3 months there is a $ penalty. Hence I wait. I’m a buy and hold guy anyway. I haven’t mentioned this before but, or the record, I did buy 4 Mawer funds (MAW120, MAW106, MAW108, MAW150) and 1 Pimco fund (PMO005) on Feb 12th. An equal weighted mix of these 5 funds returned 13.53% over the past 5 years. My DGI portfolio returned 10.52% over the same period.

  15. Bernie Says:

    Ron/BC,

    Re: 14 – Those are annualized returns.

  16. Ron/BC Says:

    Bernie
    The 50ema has worked perfectly on WEEKLY charts as it often does as it smooths out the data. Would not work well with Daily charts as you can’t “trade funds back and forth.
    But that 50ema and price support do need to hold on the Weekly charts or a major correction would likely follow. Keep in mind with the bull market running up since 2009 any diversified fund will look great. This bull trend with its proven support indicators must continue to justify holding these funds.

  17. Bernie Says:

    Ron/BC,

    There’s no doubt equities benefitted from bull markets. That’s why I pay close attention to how securities behave in down markets and over the long term before I give them further consideration. I may hang on to my dividend stocks long term but I have a different sell strategy for these funds. Going in I decided to exit when the modified 20/50/10 MACD on the weekly chart is breeched. The fixed income fund is a bit of a shock absorber in this mix but I’m not going to throw caution to the wind when the dividend income is so minimal.

  18. roy Says:

    Anyone know what going on with a couple of Brookfield stocks
    BPY.UN and BGI.UN? Have not performed well for a while.

  19. Ron/BC Says:

    Bernie
    Here is the MAW 120 chart I wanted to make if it transfers here.

    https://www.barchart.com/etfs-funds/quotes/MAW120.CF/technical-chart?plot=LINE&volume=0&data=WO&density=X&pricesOn=1&asPctChange=0&logscale=0&startDate=2000-01-03&endDate=2018-04-06&daterange=specific&indicators=MACD(20,50,10);EXPMA(50);EXPMA(200);DASH(26,);DASH(23,)&sym=MAW120.CF&grid=1&height=500&studyheight=100

  20. Ron/BC Says:

    Bernie
    I see it doesn’t transfer here. Odd as I emailed it to myself and it looked perfect. Anyways I have it on my desk top to view. I drew in a dotted horizontal line at 23 and 26 along with the 50ema and 200ema train tracks and below a 20,50,10 Modified MACD to boot. So on a Weekly chart of MAW 120 that’s about all one would need. So it will be interesting to watch as time passes.

  21. Bernie Says:

    Ron/BC,

    Re: #19-20
    Your chart transferred completely here with dotted horizontal dotted lines , two moving averages and the modified MACD below. The only drawback is the time period is 5 years and can’t be extended beyond that unless one goes with a monthly chart.

  22. Bernie Says:

    Ron/BC,

    Re: Mawer Global Small Cap Equity
    Thought you might also be interested in this one. The price appears to respect the 50EMA similar to Mawer Global Equity.
    https://www.barchart.com/etfs-funds/quotes/MAW150.CF/technical-chart?plot=LINE&volume=0&data=WO&density=L&pricesOn=1&asPctChange=0&logscale=0&startDate=2000-01-03&endDate=2018-04-10&daterange=specific&indicators=MACD(20,50,10);EXPMA(50);EXPMA(200)&sym=MAW150.CF&grid=1&height=625&studyheight=200

  23. Ron/BC Says:

    Bernie
    The small cap funds and ETFs tend to be more volatile and will show less respect for the 50ema or support and briefly violate them or not come down to them on pullbacks. It still tracks the 50ema well but does need some leeway. But on most weekly charts that 50ema does tend to be a good guide as support when price is above and resistance when price is below. I noticed that the MAW 120 Global fund was 47% U.S.,9% UK and 7% CD. I was surprised that there was no Japanese stocks or European stocks in the mix. But it is a well balanced fund for sure the way it moves.

  24. Bernie Says:

    Ron/BC,

    Not sure where you’re looking but the Global Fund makeup as of Mar 31st shows the following:

    World Regions – Country Breakdown

    As of 31/03/2018

    United States 51.89%
    Canada 7.70%
    Brazil 0.49%
    United Kingdom 9.80%
    France 3.21%
    Germany 3.51%
    Netherlands 3.61%
    Sweden 0.86%
    Switzerland 2.46%
    Japan 3.03%
    Australia 0.94%
    Singapore 2.82%
    Taiwan 1.25%
    Hong Kong 1.68%
    India 4.63%
    China 2.10%

    Developed Markets 92.77%
    Emerging Markets 7.23%

    http://quote.morningstar.ca/QuickTakes/fund/PortfolioOverviewNew.aspx?t=0P0000MOFR&region=CAN&culture=en-CA

    % Stocks

    Benchmark

    Category Avg

    As of 31/03/2018
    Region breakdown data is calculated by using the long position holdings of the portfolio equity part only.

    Americas 60.08 62.63 56.71

    North America 59.59 62.59 55.71

    United States 51.89 59.22 50.63

    Canada 7.70 3.38 5.08

    Latin America 0.49 0.04 1.00

    Brazil 0.49 0.04 0.58

    Chile 0.00 0.00 0.08

    Mexico 0.00 0.00 0.26

    Peru 0.00 0.00 0.09

    Greater Europe 23.45 23.48 25.45

    United Kingdom 9.80 6.43 7.32

    United Kingdom 9.80 6.43 7.32

    Europe Developed 13.65 16.89 16.95

    Ireland 0.00 0.13 0.34

    Finland 0.00 0.38 0.21

    Greece 0.00 0.00 0.03

    Luxembourg 0.00 0.01 0.04

    Italy 0.00 0.77 0.71

    France 3.21 3.79 3.16

    Spain 0.00 1.19 0.58

    Germany 3.51 3.61 2.94

    Austria 0.00 0.10 0.19

    Belgium 0.00 0.42 0.94

    Netherlands 3.61 1.41 1.98

    Portugal 0.00 0.06 0.12

    Sweden 0.86 1.02 1.08

    Norway 0.00 0.26 0.36

    Denmark 0.00 0.68 0.66

    Switzerland 2.46 3.05 3.60

    Europe Emerging 0.00 0.00 0.27

    Czech Republic 0.00 0.00 0.06

    Turkey 0.00 0.00 0.04

    Russia 0.00 0.00 0.17

    Africa/Middle East 0.00 0.17 0.91

    South Africa 0.00 0.00 0.46

    Israel 0.00 0.17 0.40

    United Arab Emirates 0.00 0.00 0.05

    Greater Asia 16.46 13.89 17.84

    Japan 3.03 9.13 7.61

    Japan 3.03 9.13 7.61

    Australasia 0.94 2.47 1.44

    Australia 0.94 2.40 1.40

    New Zealand 0.00 0.06 0.04

    Asia Developed 5.75 1.79 4.88

    Singapore 2.82 0.62 0.75

    Taiwan 1.25 0.00 1.15

    South Korea 0.00 0.00 1.54

    Macao 0.00 0.04 0.04

    Hong Kong 1.68 1.13 1.40

    Asia Emerging 6.74 0.50 3.90

    Indonesia 0.00 0.00 0.05

    India 4.63 0.00 0.92

    China 2.10 0.46 2.57

    Thailand 0.00 0.00 0.19

    Vietnam 0.00 0.00 0.02

    Malaysia 0.00 0.00 0.14

    Philippines 0.00 0.02 0.01

    Papua New Guinea 0.00 0.02 0.00

    Market Classification

    % Developed Markets 92.77

    % Emerging Markets 7.23

  25. Ana Says:

    I should have mentioned that I modified the charts that I posted today from the post that Ron/BC made previously.

    “Ron/BC Says:
    April 6th, 2018 at 12:02 pm
    Here is the Dow. The chart pattern since the January high has formed a very clear Descending Triangle which is a bearish chart pattern. A break of the recent lows at 23400 would suggest a selloff of 3000 points or to the 20000 level. This low which is also at an uptrend line and at its 200ema MUST hold or you can expect a major selloff once again. The chart ‘pattern’ suggests a breakdown but like all bearish chart patterns the break must come or it is just part of another pattern developing. Head and Shoulder patterns are like this as well and until the neckline breaks can’t be assumed to break. In fact, this Descending Triangle and other bearish patterns like the Head and Shoulder patterns are very bullish if they fail to break down. Bottom line is don’t “assume” anything but be aware of what the chart pattern is suggesting. Watch the recent lows to hold or breakdown for direction. Price would need to break above the downtrend line to end this bearish Descending Triangle pattern with its bearish projections and suggest at least a sideways consolidation trend. The same pattern is seen on the $SPX. Meanwhile, notice the extreme ups and downs in the broad market whipsawing everyone’s positions. That type of price action is often seen at tops.”

    http://stockcharts.com/h-sc/ui?s=%24INDU&p=D&yr=2&mn=0&dy=0&id=p57541234584&a=579408678

    http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=2&mn=6&dy=0&id=p95879226284&a=579408698

  26. Sandra Says:

    Ana, Ron/BC:
    Thanks for your posts on DOW and SPX .

  27. Ana Says:

    Sandra,

    You are a kind and appreciative person.

    I think it is Ron/Bc that needs more messages of “thank you”.

    I wonder just how many people have copies charts here without any effort to send a thank you to Ron.

    Time for some appreciation.

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