Tech Talk for Wednesday May 16th 2018

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Pre-opening Comments for Wednesday May 16th

U.S. equity index futures were mixed this morning. S&P 500 futures were unchanged in pre-opening trade.

Index futures were virtually unchanged following release of April Housing Starts at 8:30 AM EDT. Consensus was a slip to 1.307 million units from 1.319 million units in March. Actual was 1.287 million units.

Macy’s soared $2.74 to $32.67 after releasing stronger than consensus first quarter sales and earnings. The company also raised its guidance.

Micron gained $1.10 to $55.11 after RBC Capital initiated coverage with an Outperform rating.

Advanced Micro Devices added $0.20 to $12.65 after Susquehanna raised its target price to $11 from $8. The stock was upgraded to Neutral from Underperform.

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/05/15/stock-market-outlook-for-may-16-2018/

Note seasonality charts on 10 Year Treasury Prices, U.S. Retail Trade, Business Sales, Business Inventories and Empire State Manufacturing Survey.

Upcoming BNN Appearance:

Jon Vialoux will be on BNN’s Market Call Tonight at 6:00pm ET this Friday, May 18th taking your calls on Technical Analysis and Seasonal Investing.  CALL TOLL-FREE 1-855-326-6266,  EMAIL marketcall@bnnbloomberg.ca,  or TWEET @MarketCall  Be sure to send in your video questions for priority response on air.

 

Observations

The move by U.S. 10 year Treasury yields above 3.034% triggered several short term trends:

Bond prices and related ETFs moved lower

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Interest sensitive sectors including REITs and Home Builders were notably weaker

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The U.S. Dollar Index and its related ETF moved to new recent highs.

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Precious metal prices and related ETFs moved lower

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StockTwits Released Yesterday @EquityClock

Technical action by S&P 500 stocks to 10:30: Bearish. Intermediate breakouts: $FITB $NAVI. Breakdowns: $DHI $MO $A $PPL $IRM

Editor’s Note: After 10:30 AM EDT, breakouts included HBAN, NOV and PBCT. Breakdowns included MAC and ESS.

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Yield on 10 year Treasuries at 3.05% moves above 3.036% to a 7 year high extending a 7 year high.

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BMO Equal Weight Bank ETF $ZEB.CA moved above $29.63 prior to release of fiscal Q2 results setting intermediate uptrend.

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#Business #Sales running 0.8% above average through first quarter #Inventories 0.5% above average #Economy $MACRO $STUDY

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Empire Manufacturing Survey printing 28.1 (NSA) in May, firmly above 18.5 that is average for the month. #Manufacturing #Economy $MACRO

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U.S. Retail Traded down 5.2% (NSA) in April, much more than average decline for month of 1.7% #Economy #MACRO $XRT

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Home construction ETF $ITB moved below $37.72 extending an intermediate downtrend. Also breakdowns by $LEN and $DHI. Higher mortgage rates?

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‘Tis the season to avoid the U.S. Homebuilding sector! $ITB

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Trader’s Corner

Daily Seasonal/Technical Equity Trends for May 15th 2018

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Green: Increase from previous day

Red: Decrease from previous day

Daily Seasonal/Technical Commodities Trends for May 15th 2018

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Green: Increase from previous day

Red: Decrease from previous day

Daily Seasonal/Technical Sector Trends for May 15th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

S&P 500 Momentum Barometer

The Barometer dropped 7.00 to 55.40 yesterday. It fell from an intermediate overbought level to an intermediate neutral level. Early signs of a short term peak have appeared.

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TSX Momentum Barometer

The Barometer slipped 2.18 to 67.49 yesterday. It remains intermediate overbought. Early signs of a short term peak have appeared.

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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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41 Responses to “Tech Talk for Wednesday May 16th 2018”

  1. Wayne Says:

    Larry/ON,
    Yessireeee… MU is up over a buck in the pre-market on good volume.
    Long 15/06 52.50 calls. Might close at the open.

  2. Larry/ON Says:

    So. Someone actually takes my posts seriously? Have a look at the CNBC article on MU. RBC is calling for a 50% rise to $80 target. The potential in this stock was not widely known or perhaps not given serious credit before but now everyone is going to want to get in. MU might bring my retirement a couple of years earlier.

    https://www.cnbc.com/2018/05/16/micron-shares-to-soar-nearly-50-percent-rbc-capital.html

  3. Larry/ON Says:

    Wayne – Options are the big hole in my tool kit. I should get someone to help me on that. I would have optioned the heck out of this stock if I knew exactly what to do.

  4. Wayne Says:

    Larry/ON,
    I opened a Tastytrade account when I was down in Charlotte, NC. They have the best options platform in the business and the fees are the lowest that I have encountered.

    They specialize in options. Go to their page -here’s the link.
    https://www.tastytrade.com/tt/

    Tim Knight’s report at 3:15 every day is not to be missed.

    I have been in and out in MU for some time now. With a low PE and solid performance – good trading stock in my portfolio.

    Top trades!

  5. Larry/ON Says:

    Wayne – The memory chip market is entering a new era with demand for memory storage growing exponentially. It used to be dependent on cycles in PC sales and smartphones. 90% of the demand for data storage occurred in the last 18 months and the ramp up in demand will keep going. As mentioned in RBC’s coverage server demand is taking over primary demand area for memory chips whereas PC demand used to be the primary area. We are talking about cloud computer memory storage as a huge demand area. These companies are going to be much less susceptible to drops in demand going forward.

  6. Wayne Says:

    Larry/ON

    Ka-ching!! Out at 5.30….

  7. Larry/ON Says:

    Wayne – I don’t know what your option trade was but this stock just made a neck-line break. The immediate target is resistance at 57.50. RSI is not overbought yet. IMO it’s good to $60 short-term

  8. Wayne Says:

    Larry/ON,
    I have been trading MU since 2012 – it is the anchor in my options port. It is an excellent company with superb performance. As you pointed out, it is a leader in the field. I will continue to play it.
    I also trade LEAPS. I have a full position in GE. I have the 15 calls expiring in 6/19. Bot them at 1.50 last week.
    I have moved completely into US options.

    Appreciate your input. I drop in to this board from time to time to catch up with Ron, and noticed your reference to MU.

  9. Wayne Says:

    Larry,
    I’ll get back in near the close. I always target a double when trading options. Bot this one at 2.25 last week…. Volume is huge this am – over 16M shares traded so far…..
    Hogging the board – I’ll sign off here…

    Thanx!

  10. sp Says:

    HVU.to doesn’t work, looks like will test double bottom? anyone is following

  11. Ron/BC Says:

    Paula
    Here is an 8 year chart of XEG.to with CNQ.to and SU.to overlaid. You can see the XEG.to ETF outperformed both individual stocks for years AND without the drama of plunging prices due to the fact the ETF has other members without the same issues. That is the main purpose of an ETF. Odds are the individual stocks will outperform the ETF most of the time when conditions are right as they aren’t ‘smoothed’ out with the steady not so newsworthy others. But the ETFs will have far less drama up and down. It all depends when you want to compare them all. It just depends if you are prepared to hold the individual stocks when they are also plunging and not just outperforming. It is a double edged sword and cuts both ways.

    http://stockcharts.com/h-sc/ui?s=XEG.TO&p=D&yr=8&mn=0&dy=0&id=p90702437785&a=579408398

  12. Paula Says:

    Ron/BC,
    Thanks for the post and chart. I take the lesson from your chart to be: look at a long(er) term time frame before passing judgement. The chart I posted that was Mick/NV’s only went back to mid 2014 when the real trouble for oil was just starting.

    Any comments on XBM.TO or COPX (aside from low volumes on both)?

  13. Ron/BC Says:

    The Russell small cap ETF:IWM continues to spin its wheels at a tripe top of $160. Note the ratio charts above and how IWM has outperformed the Mid cap ETF:MDY consistently and held its own against the $SPX ETF:SPY but underperformed the Growth stock ETF:IWO. The IWO has outperformed most broad markets other than the Dow ETF:DIA.

    http://stockcharts.com/h-sc/ui?s=IWM&p=D&yr=2&mn=6&dy=0&id=p97088611281&a=579408528

  14. Sherri Says:

    Ron/BC

    Hi 🙂 Just wondering if you know of a Canadian etf that would replicate IWO? I’m looking but haven’t found one yet. Unfortunately most of my $$ is in Canadian dollars.

    Thank you

  15. Ron/BC Says:

    Paula
    XBM.to. The fact there is no volume tells me just how many traders & investors in the world actually want this ETF. Answer:Not many. Perhaps they collectively know more than the rest of us. But price is trapped between $13.50 and $15.50. A break of either number should determine direction. I’ve overlaid COPX and XME. I’d stick to U.S. ETFs and stocks as that is where the volume and world interest is. And the U.S. cut corporate taxes and cut regulation policies and business encouragement suggests the same.

    http://stockcharts.com/h-sc/ui?s=XBM.TO&p=D&yr=8&mn=0&dy=0&id=p22899147228&a=594766910

  16. Paula Says:

    Sherri,
    I have used XSU.TO for U.S. small cap exposure. It is hedged to CAD and another low volume ETF. But it has worked for me. Not a buy right now.

    http://schrts.co/Ejfa6v

  17. Sandra Says:

    MU fans:

    Encouraging posts on MU. Would like to start a position and then add to it. Will there be a pullback or do I just jump in.

    Thanks 🙂

  18. Ron/BC Says:

    Sheri
    Sorry,I don’t know of a CD ETF like IWO. Why not convert to U.S.$ and just keep it there. At least there is a huge selection of stocks and ETFs with high volume that the entire world is buying and selling. But I do believe there is a $TSX listed ETF that matches the $SPX and the small cap ETF:IWM. The small cap ETF does tend to outperform often. Perhaps someone on this site could post the equivalent $TSX ETFs for these U.S. ETFs.

  19. Sherri Says:

    #16 Paula
    Thank you

  20. Paula Says:

    Ron/BC,
    Thanks for the XBM.TO chart. Interesting that it has outperformed both COPX and XME since mid 2014.The uptrend is intact so I will try to stay with it for now. I will probably sell near 15.50 and be happy with my profit.

  21. Larry/ON Says:

    Sandra – If you want in and a stock like MU takes off you have to take an initial position immediately. You risk being completely out or just paying more tomorrow. Think longer term.

    RUT and IWM – Broke resistance today. New all-time high so no triple top worry.
    SP500 – Needed the 4 day MA to catch up so it dropped yesterday. We should push through 2742 soon.

  22. Sandra Says:

    Ron/BC: TECK.B , FM.TO

    Seasonality wise MAY has lowest performance but been strong lately. Are they at a peak or have room to go? Both are over bought. Teck.B/TO for example was $38 when copper was 3.30 and now it is 37 and copper is at 3.07. Wandering why these are being bought??

  23. Sherri Says:

    Ron/BC
    Thanks

  24. Ron/BC Says:

    Sandra
    Here is a chart of TECK/B.to with FM.to overlaid and the ratio chart of TECK:$Copper above. TECK is tracking $Copper ok. FM.to is a basket case compared to TECK/B.to and is good for swing traders that need a rush. Overall TECK/B.to is at resistance and needs to close and hold above $38 to suggest further gains. Support is just above $31. A simple rule that works is “Buy Support & Sell Resistance” and forget about the “stories” you read and hear and don’t over think the market. It’s just another place to make bets.

    http://stockcharts.com/h-sc/ui?s=TECK%2FB.TO&p=D&yr=10&mn=0&dy=0&id=p35635194562&a=579408557

  25. Paula Says:

    Ron/BC,
    Here is an old chart of yours of BCE.TO. Perhaps the low is in (for now). I have not updated your indicators or lines but it seems to me there is a double bottom and bullish divergences on the RSI 8 and SLOW STOCH. Also your MACD has crossed to a buy, I think.

    http://schrts.co/R9WuQe

  26. Ron/BC Says:

    Paula
    Not home now. Will rechart BCE.TO later.

  27. Paula Says:

    Ron/BC,
    Thanks, no rush. I am going out for awhile also.

  28. Ana Says:

    $SPX $ES

    Looks like we should be coming down here for a wave v, so if someone is thinking of buying, might be wise to wait for the close.

    I have bronchitis so any homemade chicken soup would be very much appreciated.

    No shouting, LARRY! (Use your indoor voice, please.)

  29. Larry/ON Says:

    Ana – What’s up? Look after yourself. Make sure you minimize allergens that will trigger or worsen bronchitis.

  30. Sandra Says:

    Ana:

    Sorry to hear u r not well. Try ginger tea with honey to soothe and ease your throat and lungs.

    Get well soon!

  31. Larry/ON Says:

    MU Muuuu! Mooooooo! The herd is stampeding.

  32. Sandra Says:

    Larry/ON:
    MU – do the gaps get filled? Will have to wipe today’s gains to fill gap down sometime.

  33. Larry/ON Says:

    Sandra – Your question is valid. Gaps are usually filled given ups and downs of the market over a long period of time but they don’t have to be filled. There are volatile stocks that have gaps in their trading history. For example, try AMZN, INTC. I like FB’s gap from last month to the upside. NVDA has a gap in January that is unfilled and one from this month. The question is whether there is a major revaluation of a company in the marketplace that prevents the gap from being filled.

  34. Larry/ON Says:

    Sandra – Here’s a gap that is about to get filled. Try TXN for a neck-line break just as just happened to MU. Perhaps I’m getting a little over-confident here but it looks like it is lining up.

  35. Rol Lew Says:

    MU – gap-fills ?

    Yes, it happens.

    https://finviz.com/screener.ashx?v=211&t=AMD,MU,M,GE,TEVA,VALE,ESV,CLF,FB,WFC,RIG,BABA,XLE,SQ,OAS,AMAT,VRX,P,XOM,OXY&ta=0

    plus, it’s really hard to know when a stock will have a nice run up, for the benefit of call options. The last time MU was 52 & breaking out, in mid Apr, it promptly reversed. Any of these hot stocks can reverse tomorrow.

    I am now wondering whether “cloud computing”, also needs lots of storage, (WDC, STX), in addition to lots of memory (MU)

    http://stockcharts.com/h-sc/ui?s=WDC&p=D&yr=0&mn=6&dy=0&id=p99289799274

    http://stockcharts.com/h-sc/ui?s=STX&p=D&yr=0&mn=6&dy=0&id=p87659425863

  36. roy Says:

    Hello Larry/On
    Is TXN in the same space as MU? What has a better chart and more upside?

  37. Sherri Says:

    All you “cloud” people, recommended by Paul Beattie (BT GLOBAL) at the World Outlook Conference as a buy and hold for a very long time, SKYY, First Trust Cloud Computing ETF

  38. Paula Says:

    RE: TXN – I currently hold this. I have bought and sold this many times over the years. This is one that I would have done better to just hold.

  39. Sandra Says:

    I feel like a lost child here among you folks. Throwing in names some I have never even heard of. And you too have expensive taste but than those are the ones that have been giving gains.

    Thanks for ur posts. Good to be among you!

  40. rick Says:

    Sandra ,

    Why you don’t buy QQQ than ?

    Inside QQQ you will have all these names : NVDA,TXN,MU,WDC,STX,…

  41. Ron/BC Says:

    Paula
    BCE.to recently bounced off strong support at $52.50 and up to its downtrendline. A pullback to $53 would be the ideal technical place to buy it with a stop below $52.50. The stock is still underperforming T.to and FTS.to though as the above ratio charts show.

    http://stockcharts.com/h-sc/ui?s=BCE.TO&p=D&yr=3&mn=0&dy=0&id=p47216457920&a=579408570

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