Tech Talk for Tuesday May 15th 2018

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Pre-opening Comments for Tuesday May 15th

U.S. equity index futures were lower this morning. S&P 500 futures were down 11 points in pre-opening trade.

Index futures moved lower following release of economic news at 8:30 AM EDT. Consensus for April Retail Sales was an increase of 0.3% versus a revised gain of 0.8% in March. Actual was an increase of 0.3%. Excluding auto sales, consensus for April Retail Sales was an increase of 0.5% versus a revised gain of 0.4% in March. Actual was an increase of 0.3%. Consensus for May Empire State Manufacturing Survey was a slip to 15.5 from 15.8 in April. Actual was 20.1

Home Depot dropped $5.32 to $185.61 after reporting lower than consensus first quarter sales

Agilent fell $4.11 to $65.10 after reporting lower than consensus quarterly results.

Mosaic (MOS $27.17) is expected to open higher after Stifel Nicolaus raised its target price to $32 from $28.

CF Industries (CF $40.47) is expected to open higher after Stifel Nicolaus increased its target price to $43 from $37.

Micron added $0.67 to $53.67 after Stifel Nicolaus raised its target price to $101 from $95.

Ford slipped $0.08 to $11.10 after Piper Jaffray downgraded the stock to Neutral from Overweight.

EquityClock’s Daily Market Comment

http://www.equityclock.com/2018/05/14/stock-market-outlook-for-may-15-2018/

Note seasonality charts on the Energy and Health Care sectors as well as the Russell 2000 Index.

Observations

U.S. Healthcare sector came alive yesterday, particularly biotech stocks and related ETFs. Typical prior to the ASCO conference in early June!

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Canadian energy stocks continue moving higher during their period of seasonal strength lasting to early June. TSX Energy Index moved to a 14 month high.

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Notably stronger were “gassy” and oil services stocks (e.g. Precision Drilling moving briefly above $4.84)

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Canadian Cannabis stocks and related ETFs responded to merger news (e.g. Aurora Cannabis offer for MedReleaf). HMMJ moved above a base building pattern on a move above $17.32.

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StockTwits Released Yesterday @EquityClock

Technical action by S&P 500 stocks to 10:00: Bullish. Intermediate breakouts: $DLPH $BAC $C $ROK $QCOM $VRSN $CF $FBT $UNH. Breakdown: $XRX

Editor’s Note: After 10:00 AM EDT, breakouts included A, CBS, DIS and TSCO. No breakdowns.

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Base Metals ETF $PICK moved above $36.37 setting an intermediate uptrend.

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UnitedHealth Group $UNH, a Dow Jones Industrial stock moved above $241.67 extending an intermediate uptrend.

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Rogers Communications $RCI $RCI.B.CA moved above $48.48 U.S. extending an intermediate uptrend.

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EAFE iShare $EFA moved above $72.03 setting intermediate uptrend.

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NASDAQ Biotech ETF $IBB moved above $108.07 completing a double bottom pattern.

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‘Tis the season for the Biotech sector to move higher prior to the ASCO conference in Chicago: June 1-5th $IBB $BBH $FBT

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Editor’s Note: FBT recorded a similar breakout.

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Canadian Natural Resources $CNQ.CA $CNQ, a TSX 60 stock moved above $46.99 Cdn. to an all-time high extending an uptrend.

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Toromont Industries $TIH.CA moved above $58.55 to an all-time high extending an intermediate uptrend.

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Walt Disney $DIS, a Dow Jones Industrial stock moved above $102.71 completing a base building pattern.

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Europe iShares $IEV moved above $48.38 extending an intermediate uptrend.

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Trader’s Corner

Daily Seasonal/Technical Equity Trends for May 14th 2018

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Green: Increase from previous day

Red: Decrease from previous day

Daily Seasonal/Technical Commodities Trends for May 14th 2018

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Green: Increase from previous day

Red: Decrease from previous day

Daily Seasonal/Technical Sector Trends for May 14th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

S&P 500 Momentum Barometer

The Barometer added 0.20 to 62.40 yesterday. It remains intermediate overbought.

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TSX Momentum Barometer

The Barometer added 0.41 to 69.57 yesterday. It remains intermediate overbought.

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Disclaimer: Seasonality and technical ratings offered in this report and at

www.equityclock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed

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15 Responses to “Tech Talk for Tuesday May 15th 2018”

  1. Larry/ON Says:

    AMZN – Absolutely dangerous. Cleared out of this one above 1600. Looks like a double top. Probably drops min to 50day MA. I’m sure there will be buyers though looking for a “bargain.”

  2. Ana Says:

    #1. Larry/ON

    What happened to your advice of “Buy as many shares as you can and do not sell them.”

    That was yesterday.

    “Too soon?”

  3. Ron/BC Says:

    The $SPX broke out above the widely watched 2717 Friday by a few points and again Monday by a couple of points to the Fibonacci 61.8% retracment level 2740 of the January to early April selloff. There has been no conviction to blow through 2717 or 2740 which is a concern. Price is once again below 2717. As long as price remains above the downtrendline it broke above it is still a positive chart pattern. A break back into the previous Descending Triangle would bring on selling which has already begun today. A ‘close’ today back above 2717 would be very encouraging. Momentum indicators are overbought and rolling over.

    http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=5&dy=0&id=p77372311974&a=582707024

  4. Ron/BC Says:

    The U.S.10 year Treasury Yield is finally clearing the well watched 3% with a very bullish chart pattern. A breakout over this 3% level would be a major breakout in the falling interest rate downtrend for over 30 years and be a major change from down to up again. This U.S. 10yr rate affects rates world wide. Apparently 47% of existing mortgages in Canada need to be refinanced in 2018. Doesn’t look like mortgage payments will be getting cheaper.

    http://stockcharts.com/h-sc/ui?s=%24TNX&p=W&yr=10&mn=0&dy=0&id=p69246240101&a=579408637

    http://stockcharts.com/h-sc/ui?s=%24TNX&p=D&st=1975-01-14&en=(today)&id=p44632506762&a=579408572

  5. Larry/ON Says:

    ANA – My post from last night was referring to MU.

  6. Paula Says:

    Ron/BC,
    Thanks for the $SPX and $TNX charts and comments.

    In the interest of keeping some discussion going…

    Ron/BC, I hope you don’t mind my quoting a couple of your recent posts. And I apologize ahead of time in case you do. I realize a person is entitled to change his/her mind and also to hold conflicting views on the same subject.

    May 9th, 2018 at 3:06 pm quote #1:

    “If I had a gun at my head I’d prefer XEG.to “IF” it clears $13. At least with this ETF it includes CNQ and SU in a major way being 45% of the ETF plus has a variety of other related stocks in it. To keep it simple just follow the arrows on the bottom of the chart. They seem to know where to go,lol.”

    May 14th, 2018 at 11:58 am quote #2:

    “XEG.to is finally poking its nose above $13. Needs to stay there to expect a rally to a double top. (Not a lot of upside on this even if successful.)”

    When you wrote the first quote, my thoughts were why not just buy SU or CNQ (or both) since they make up so much of XEG. In this case, XEG does not really provide much diversification, which is one of the main reasons for holding an ETF rather than individual stocks. I also recall a chart that Mick/NV sent last September showing that XEG was a miserable underperformer against SU, CNQ and the TSX itself. I kept that chart to remind myself never to be tempted by XEG. BUT…if SU and CNQ go up, XEG will have to go up, so if someone was holding it, that would provide some comfort…

    http://schrts.co/CZH6YU

    The second quote and chart that went with it seem to say: there is limited value to XEG. So I prefer SU and/or CNQ for my oil exposure.

    In trying to decide what to use for base metal exposure, it is almost the opposite situation: I wanted to get away from TECK.TO or FCX due to their extreme volatility and individual risks. So I chose XBM.TO and COPX on the USD side. There does seem to be some diversification benefit to these ETFs.

    Here are the holdings according to Morningstar:

    http://portfolios.morningstar.com/fund/holdings?t=XBM&region=can&culture=en-CA

    http://portfolios.morningstar.com/fund/holdings?t=COPX

  7. Ana Says:

    $SPX $ES (Please remember this is the future market, June 18)

    First target is 2695 – 2690.

    Second target is 2635 – 2630. (If we really get rolling downhill.)

  8. Larry/ON Says:

    FANG stocks hit by profit taking. AAPL hit overvalued above 70 RSI and ran up too fast. I already commented on AMZN. Guessing both AMZN and GOOGL correct back down to the 50 day MA. FB had also hit 70 RSI. Financials are showing to be resilient. KBE bank index up. Small caps RUT near break even. Looks like selective profit taking and rotation. I maintain my bullish view.

  9. Ana Says:

    Neil/AB

    How are things with you? What have you invested in lately?

  10. DC/BC Says:

    Not many people trading hvu.to? i see a disconnect btw hvu.to and vix now?

  11. rick Says:

    Few months ago “The investors” were concerned about “the flattening yield curve ” = a signal for recession .
    Now the $TNX is going above 3 % and the yield curve is steepening = a good sign for the economy , no recession in near future .
    ” The investors ” , instead to be happy , they are concerning about = bonds over 3 % will attract yield investors that will move the capital from dividend paying stocks ( utilities , REIT , pipelines …) to bonds.

    I see 2 problems here :
    1. growth stocks ( technology .. ) and banks ( who directly benefit from a steep yield curve )
    should not be affected
    2. who are those stupid money managers who are selling stocks ( especially growth stocks ) to buy bonds ?
    Just look at the total returns : https://finviz.com/screener.ashx?v=141&ft=3&t=QQQ,SPY,TLT,IEF,&o=-perf52w

    one year return : QQQ = 22 % , SPY = 14 % , IEF = – 4 % , TLT= -2 %
    YTD return : QQQ = 9 % , SPY = 2 % , IEF = – 4 % , TLT = -6 %

    Who cares about 3 % yield in IEF when IEF price is going down like a stone ? or TLT = -6 % YTD ?

    Are yield chasers so stupid that they are seeing only the yield and ignore the total return ?
    they can give me 10 % yield , if the price is going down 20 % I am not buying that BS

  12. Ron/BC Says:

    Paula
    X E G.TO IS just more diversified than C N Q and S U SO LESS risk overall… Also I wouldn’t buy into the Canadian oil sands when major oil companies are dumping their assets in them. Just recently Shell dumped their holdings in them. Trade U.S.markets like X L E and forget about CD oil sands etc.

  13. Larry/ON Says:

    MU – It’s going to pop tomorrow.

  14. kam Says:

    Ron/Bc,

    TNX have 3rd wave 1.00 extension to 3.20 and 1.618 to 3.55. Lets see what happens next. If I have to take a guess we should be close to turn around but what I know about interest rates, 🙂

  15. Ana Says:

    5. Larry/ON

    No need to yell my name, Larry! I am right here.

    Sorry my error, I got that statement mixed up with this one:

    “Larry/ON Says:
    May 14th, 2018 at 10:12 am
    May has been one of the best months so far. The whole “Sell In May” idea becomes a recipe for lost opportunity. Tech stocks are ripping higher. The market is not at all overvalued on a P/E basis. Stocks like MSFT are hitting new all time highs. Semi-conductor stocks are on fire. NVDA broke to a new high two days ago and others like MU and AMAT are making outsized gains.”

    And this one:

    “Larry/ON Says:
    May 10th, 2018 at 11:46 am
    SP500 just cleared major resistance at April high of 2717.49 setting up the market to move to 2800.”

    Hope you do not mind that I quoted these examples. As traders, we cannot be either bullish or bearish. We have to follow the market with our own individual charts.

    I also notice that you mention David Burrows frequently. Does he even chart the market? One has to wonder.

    “Larry/ON Says:
    May 10th, 2018 at 10:28 am
    David Burrows Today – “New leg higher? With tech, energy, investment dealers and small caps making new relative highs vs SPY and Volatility breaking down it gets harder and harder to argue against our bullish case. Resolution….Short covering will add fuel.””

    I used to follow David Burrows very closely, however, the errors in his comments were so frequent that it became impossible to follow him.

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