Tech Talk for Wednesday April 25th 2018

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Pre-opening Comments for Wednesday April 25th

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

First quarter reports continue to pour in. Reports released since yesterday’s close included Amgen, Boeing, Boston Scientific, Comcast, GlaxoSmithKline, Goodyear, Hess, Northrop Grumman, Owens Corning, Texas Instruments, Twitter, Viacom and Wynn Resorts.

Boeing gained $8.63 to $337.20 after reporting higher than consensus first quarter results. The company also raised guidance.

Alphabet added $5.80 to $1028.44 after Stifel Nicolaus upgraded the stock to Buy.

Verizon improved $0.33 to $50.00 after SunTrust upgraded the stock to Buy from Hold.

Hasbro (HAS $86.26) is expected to open higher after CFRA upgraded the stock to Strong Buy.

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/04/24/stock-market-outlook-for-april-25-2018/

Note seasonality charts on New Home Sales, Case/Shiller 20 City Home Price Index, Consumer Staples sector and Health Care sector.

Observation

Important reversal by U.S. equity markets yesterday! U.S. equity indices and economic sensitive sectors opened higher on stronger than consensus sales and earnings reports (e.g. Alphabet, Caterpillar). However, by 10:00 AM EDT, sellers on news appeared. Weakness triggered short term technical sell signals (e.g. moves below20 day moving average, falling Stochastics and RSI from overbought levels). See “Trader’s Corner” below for background.

 

StockTwits Released Yesterday @EquityClock

Technical action by S&P 500 stocks to 10:15: Slightly bearish. Intermediate breakouts: $MET $FLR. Breakdowns: $TRV $MAS $MMM $SHW.

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Travelers $TRV, a Dow Jones Industrial stock moved below $132.07 and $132.09 completing a double top pattern.

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MMM $MMM, a Dow Jones Industrial stock moved below $209.47 extending an intermediate downtrend.

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Enbridge $ENB.CA, a TSX 60 stock moved below $38.02 on pipeline construction delays extending an intermediate downtrend.

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U.S. Home Prices up 0.7% (NSA) in February, positively diverging from the 0.2% decline that is average for month #Housing #Economy $MACRO

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Canadian “gassy” stocks move higher on natural gas price strength. E.g. $ERF.CA $PEY.CA

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Power Corp. $POW.CA, a TSX 60 stock moved above $29.90 completing a modified reverse Head & Shoulders pattern.

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Technical action by S&P 500 stocks to 1:00: Very bearish. Industrials notably weaker. Breakdowns: $AME $DE $ITW $JCI $ROP $ARNC $FTV

Editor’s Note: Additional industrial stock breaking support after 1:00 PM EDT included ETN, NOC, PH, DOV, AAL, RSG and PWR.

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Goldman Sachs $GS, a Dow Jones Industrial stocks moved below $243.77 completing a modified Head & Shoulders pattern.

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Homebuilder SPDRs $XHB moved below $39.08 extending an intermediate downtrend.

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Trader’s Corner

Daily Seasonal/Technical Equity Trends for April 24th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Daily Seasonal/Technical Commodities Trends for April 24th 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 24th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Keith Richards Blog

Keith says, “Don’t be the dip buying the dip”.

Following is a link:

http://www.valuetrend.ca/dont-be-the-dip-buying-the-dip/

Editor’s Note: Interesting article well worth reading! Tech Talk agrees with the assessment for another reason. Seasonal influences historically have peaked at this time of year, particularly during U.S. mid-term election years.

S&P 500 Momentum Barometer

The Barometer dropped another 7.40 to 42.00 yesterday. It remains intermediate neutral.

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TSX Momentum Barometer

The Barometer slipped 4.37 to 58.02 yesterday. It returned to intermediate neutral from 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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6 Responses to “Tech Talk for Wednesday April 25th 2018”

  1. roy Says:

    Hello Bernie
    Do you still own AD.TO (Alaris)? Wondering what are your thoughts on this
    Thanks

  2. Bernie Says:

    roy,

    I did hold Alaris in all of our accounts but no longer own it now. I sold the last of my holdings in Feb. Sorry, I haven’t kept current on it. BNN guest analysts have mixed views. Perhaps check opinions on stockchase.

  3. roy Says:

    You r the buy and hold kind. Any reason why you would bail on this one Bernie?

  4. Bernie Says:

    roy,

    Long story Roy. Its nothing to do with Alaris specifically or dividend growth investing in general. After much thought I decided to sell all and go with 4 Mawer funds and one Pimco fund in Feb. I don’t want to be seen as giving up on DGI. Its been good for me and I highly recommend it for others. I may go back to it at a later date but, so far, my move has paid off in performance returns and I have very solid global diversity. As Ron/BC has often said “there are many ways to skin a cat”. He also would “cash is a position” but that’s too “naked” for my liking.

  5. Ron/BC Says:

    Bernie
    I guess I like being ‘naked’,lol. My entire adult life I was interested in stocks and opened an account with Richardson Greenshields in my early 20’s despite not having much to spend. Got into charts as I would go down to my broker’s office and look through hundreds of charts they got sent in. I could have lived there but had to work. Then I bought books on technical analysis and my broker would call me as ask me what I thought of a chart and I’d just say what the technical books had taught me and it worked well. So while I ‘traded’ hundreds of stocks and then commodities I never ever held a stock or commodity long as it was just a trade from support to resistance. Right to this day I find it impossible to consider stocks as a good ‘investment’ as they are up and down like a yoyo with constant changes in business and economics and politics. I’d have more confidence trading the roulette wheel than holding a stock portfolio,lol. I’ve tried to get over it but all things considered I truly believe stock ownership is strictly for short, medium and long term trading. I guess I was tainted along the way from all the disastrous stock crashes I heard about from some traders I had a lot of respect for that were smarter,better funded and better connected than I could ever be. And there was nothing they could have done to protect themselves from it with many events that unfolded. Doesn’t mean one can’t make money holding stocks ‘in a bull market’ but overall from what I’ve read the real return on stocks over a lifetime of investing is a very small percentage when the losses are calculated with the wins even with dividends. I don’t mean measuring from a low like 2009 but a lifetime of investing. The present bull market is 9 years old and hasn’t had a major correction yet. If that doesn’t trouble stock holders I don’t know what would. And dividend focused stock holders seem to be ok with stocks falling precipitously as long as they get the divided. That’s much like owning rentals and not being concerned with house repairs as long as your rent comes in. I can relate to that as what has made me money each and every time since I was 21 was the profit on homes I bought and sold. So yes, lots of ways to skin a cat but I find it hard to put my money on something so unstable and vulnerable as stocks. I wish I could and perhaps after a major correction with extreme pessimism on the market I will be eager to throw some serious money at it. But until then the only thing I see is short term trades as they come up. I’m pleased that you have done well with it as we all need ‘something’ to tide us over in retirement. I’m very cautious about buying a condo as this is not the time to be doing it after a big price run up and major federal,provincial and municipal regulations along with higher interest rates slowing down housing. Plus financial institutions being far more cautious about lending. So I’ll wait for an opportune time as more come on the market for sale with lower prices and far fewer borrowers qualifying for a mortgage. Many listings I get sent to me from the Real Estate Board say “Back on the market” and Financing collapsed”. But I sure wont be chasing after anything. And yes,Cash is also a position and allows me to sleep well too. Another big bump up in interest rates would be helpful also. I don’t now if you recall the markets in 1981 but this is just like then when everything soared and then just came to a stop and reversed down. I had just sold my last renovated house and got my money and didn’t buy anything after. B.S. luck I supposed but things sure seem much the same again.

  6. Bernie Says:

    Ron/BC,

    Your short term trading/investing approach using technical analysis has worked very well for you. I’ve dabbled with trading using technical analysis and found it too “busy” for my liking. I much prefer to research individual stocks or funds to see how they behave in various different market conditions. Once I put them together I like to sit back and relax with little monitoring, ie; the view from 10,000 feet. Ideally, there is a good inverse correlation in my mix so the overall peaks and valleys are less steep. DGI suited me well for the past 10 years. Its a long term value investing style which focuses on the growing income stream rather than on capital growth. My returns have been quite decent. My income grew an average of 9.0% annually and my capital grew at an annualized rate of 9.7% over the 10 year period. That’s not too shabby considering SPY returned the same 9.7% and XIU.TO returned 4.8%. That said, those were my past returns in a predominantly bull market of ultra low interest rates. What I didn’t like about my stock mix was the lack of global diversity and high percentage of interest sensitive holdings. I had a bit of a wakeup call with my 2017 performance. My 5% return was quite sub-par as was my organic dividend growth of 6.1% (dividend growth before reinvesting). Like others I have no idea when the bear will rear its head. I do know its long overdue and may be severe if inflation returns with rapid rate rises. I decided I had enough when the market dipped in Feb. Thats when I went with plan B. I had decided quite a while ago that I’d eventually switch over to a Mawer fund portfolio mainly to simplify things for my wife because chances are good she will inherit the goods or have to run the show when I can’t do it myself. I don’t anticipate a drop off in performance with the Mawer/Pimco mix. Back tests show I would have outperformed my DGI portfolio by 1.6% annually going back to 2008. I’m also ahead in performance since switching over in Feb. I do miss my dividend income though. Performance aside, I’ve always liked the idea of living off of dividend income over selling shares/units to create income. I can’t say for sure, I may be back when things settle out.

    Good luck in finding a suitable condo at a good price and opportune time. We’d be in a condo today if we didn’t have to worry about our “very spoiled but loveable” dog.

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