Tech Talk for Tuesday October 16th 2018

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Pre-opening Comments for Tuesday October 16th

U.S. equity index futures were higher this morning. S&P 500 futures were up 18 points in pre-opening trade.

Johnson & Johnson added $0.04 to $133.99 after reporting higher than consensus third quarter earnings. The company also raised guidance.

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Goldman Sachs added $2.66 to $217.88 after reporting higher than consensus third quarter earnings.

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Adobe (ADBE $238.01) is expected to open higher after raising guidance.

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UnitedHealth Group advanced $5.45 to $265.70 after reporting higher than consensus earnings. The company also raised guidance.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/10/15/stock-market-outlook-for-october-16-2018/

Note seasonality charts on the Technology sector, Retail Trade and Empire State Manufacturing Survey.

Observations

Out of the ashes?

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Still smoking!!! All-time closing high prior to the big day: Wednesday.

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StockTwits Released Yesterday @EquityClock

Goldcorp $GG $G.CA, a TSX 60 stock moved above$11.00 U.S. completing a double bottom pattern.

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IAMGold $IMG.CA moved above $5.29 completing a double bottom pattern.

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Editor’s Note: TSX Gold stocks and their related ETFs have a history of bottoming at this time of year. Next period of seasonal strength on a relative basis is from mid-December to the end of February.

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Technical action by S&P 500 stocks to 10:00: Quiet. No intermediate breakouts. Breakdowns: $OXY $ PH

Editor’s Note: After 10:00 AM EDT, breakouts included WBA, LLL and HRS. No additional breakdowns.

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Walgreen-Boots $WBA, a Dow Jones Industrial stock moved above $74.57 extending an intermediate uptrend.

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Consensus Third Quarter Earnings Estimates for TSX 60 Companies

Consensus for third quarter earnings by TSX 60 companies generally show good year-over-year gains: Thirty six companies are scheduled to report higher earnings, three companies are expected to record no change, 14 companies are expected to report lower earnings and data is not available on seven companies. Strongest gains are expected to be recorded by energy and technology companies. Average (median) gain is 10.9%.

 

third quarter earnings paint table

*Median

Source: Zacks

Trader’s Corner

Equity Indices/related ETFs

Daily Seasonal/Technical Equity Trends for October 15th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for October 15th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for October 15th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

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Seasonal Advantage Portfolio continues to mitigate much of equity market’s recent weakness. How are you positioned? equityclock.com/about/seaso… $SPX $SPY

 

Hap Sneddon on BNN Bloomberg’s Market Call

Recorded yesterday. Following are links:

 

Market Outlook

https://www.bnnbloomberg.ca/market-call/hap-sneddon-s-market-outlook~1514621

Past Picks

https://www.bnnbloomberg.ca/market-call/hap-sneddon-s-past-picks~1514622

Top Picks

https://www.bnnbloomberg.ca/market-call/hap-sneddon-s-top-picks~1514636

 

Technical Scoop

By David Chapman

David says, “October Bottom, or Bull End with Strong Gold, but No Recession Yet amidst Fed Attack and Bitcoin Precipice”

Following is a link:

http://www.enrichedinvesting.com/PDF/Technical-Scoop-2018-Oct-15-Final.pdf

 

S&P 500 Momentum Barometer

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The Barometer slipped 1.00 to 14.60 yesterday. It remains deeply intermediate oversold, but trend remains down and a significant technical signs of bottoming has yet to appear.

 

TSX Momentum Barometer

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The Barometer added 2.10 to 21.85 yesterday. It remains intermediate oversold, but trend remains down. Early technical signs of bottoming have appeared, but are not sufficient to call a change in trend.

 

Next Tech Talk report

Next report is scheduled to be released on Monday October 22nd

 

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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13 Responses to “Tech Talk for Tuesday October 16th 2018”

  1. Ana Says:

    $SPX $ES

    https://invst.ly/8w4cl

  2. Mary Says:

    Hello Everyone:

    Is this sell the rally??

    Larry/ON

    Are you still holding your stocks.

    Ana:

    Thanks for your post.

  3. tawny Says:

    Sherri,

    I see Armstrong has a new one on this bounce – hope we hear from you – I am always interested in what he has to say – just a piece of the pie. Thanks.

  4. Ana Says:

    #2. Mary,

    Maybe another day or partial day, not yet at the target.

    All volatility etfs not eroding as much as usual.

    Volume is very light on the way up.

    I will know the definite target tomorrow, as the moving averages move down.

  5. Mary Says:

    Ana:
    Thanks for #4. Please do update.

  6. Sherri Says:

    Armstrong:

    “The 15th ended with a lower closing inside day so the opposite direction should have followed. This is unfolding as a bounce and the S&P500 & NASDAQ really point to the tomorrow whereas the Dow showed Thursday with also a Panic Cycle. We still do not see a major change in trend insofar as creating a bear market. Therefore, the numbers to watch now on the upside are 27794 in the Dow, 2938 in the S&P500 and 807790 in the NASDAQ that would signal a breakout to the upside. Most are still worried about the U.S. elections, for the Democrats are advocating violence if they do not win. They also are swearing to raise taxes significantly to punish the “rich” who are small business and the super-rich, banks, and big corps donate to the Democrats for tax brakes. But the Democrats are also advocating the Deep State and are deliberately looking to retaliate against Russia for Hillary’s loss and will not stop at even instigating World War III. So the next few years looks crazy.

    We also have a political crisis building in Europe with both BREXIT and Italy sent its budget in confrontation with Brussels. So the political picture looks very bad and that is the key element to undermine confidence and further push the shift from Public to Private assets. This will be manifest in the continued decline in the bond markets.

    So far with the ECM, 2015.75 marked the start of the rise in interest rates. November 2017 was the breakout to the upside in the share market that led to the January high, on July 16th, 2018 the summit between President Trump and Vladimir Putin came to an end. Trump came immediately under fire for defending Russia against election meddling charges and the response in the Senate was to block any American being questioned by Russia for meddling in their elections back in 2000. Now we face the Pi Turning point on November 21st. This one has typically been political in nature.

    The last two waves produced interesting political turning points. The 1998-2002 was produced 911 attack on the World Trade Center which justified homeland security and we can no longer fly with cash in our pockets.

    The 2010 turning point produced the announcement that Greece needed to be bailed out.”

  7. Sherri Says:

    Armstrong for the week of the 15th:

    “The spectacular decline in the New York Stock Exchange last week seemed like a crash at first to most people, but a closer look reveals some global risks that are bubbling up on the surface. Closer analysis reveals that the US financial market crash was not really about interest rates or even a trade war with China. There have been the chorus of bears who have kept calling to the end of this high-altitude flight which they have refused to really acknowledge has been the most hated bear market in all recorded history. What is at stake here is total confusion. The primary disturbing underlying concerns has been the confrontational attitude of Democrats and their outright support of civil unrest, which they even fully know means more violence. They are preaching that they will raise taxes on the rich dramatically, lower everyone’s healthcare costs, and create more jobs all simultaneously. By attacking the “rich” (defined as household income of $250,000) means they will target small business and that cannot create jobs. The only way to raise taxes and regulations on the “rich” and create more jobs requires governments to hire and that would only further the economic crisis ahead.

    We encountered a Superposition situation on the Weekly Level in the Dow electing two long-term term Weekly Bullish Reversals against a Short-term Weekly Bearish. This tends to imply that we are not looking at a major crash just yet. The critical support lies at the 21600 level in the Dow and ONLY a closing on a monthly basis beneath that area would alter the short-term trend.

    The NASDAQ peaked in August, the S&P500 in September, and then the Dow the week of October 1st. This clearly demonstrates that the domestic players were backing off and the new highs in the Dow were being driven by foreign capital inflows fleeing somewhere else.

    When we look at the Euro, the dollar peaked (Euro low) on August 15th, 2018. However, it has been unable to exceed even the breakout line and it has fallen back within the previous Downtrend Channel. This is technically a weak posture and resistance is forming at 11583 level and the Euro must rally back above this level to see a bounce back to the 119-120 zone. However, that requires a restoration of confidence in Europe which is also difficult to find.

    In Europe, the European Central Bank continues the dangerous attempt to stifle reality by cheap money destroying the bond market in the process. In the process, we have the steady undermining of the Merkel government in Europe ensuring she will eventually be thrown out with the dirty laundry and that will start the undermining of confidence in the EU as the refugee crisis has been the driving force. Meanwhile, Italy is in a confrontation with the EU which is applying Germany austerity which has undermined the Southern European economies, created the refugee crisis, and produced the lost generation of youth with unemployment at almost three times that of the US Great Depression.

    The other economic areas, especially emerging markets, are coming under pressure and remain hopeless insofar as reversing the future. They took advantage of low interest rates to sell debt to particularly pensions and they denominated that debt in dollars to make the sales. So as the interest rates rise and the dollar, Emerging Markets are simply tottering on the edge of a cliff with no hope of avoiding the fall. While Brazil has its political problems, its share market peaked in February 2018. It has staged a rally to retest the former highs, which is more of a reflection of the difference in the posture between Public and Private assets on a global scale.

    The key is US interest rates, which are above 3 percent and end the low interest rate period. We are now looking at the Fed raising rates that will reach 5%+ by 2020. They Fed is keenly aware of the pension crisis on the horizon. The adjustment to the new conditions could be without spectacular upheaval. Then there is the US-Chinese trade war which has been escalating, yet will do more harm to China’s economy than the United States.

    Monday the 15th is important. We achieved the Directional Change on Thursday creating the low. But this week the key days are the 15th and 18th/19th. If we retest the low here on the 15th, then this may hold and we rally into the end of the week. It we bounce and just exceed Friday’s high, then the risk will be of a decline into the end of the week. When we look at the NASDAQ and S&P, the key days are Wednesday 17th, yet they both still show the 15th as a target as well. The NASDAQ has a Directional Change due on Tuesday, so this also tends to suggest that the 15th is a leading indicator for this week ahead.”

  8. bruce Says:

    tnx again Sherri…….

  9. Ana Says:

    $SPX $ES

    So we came down to 2783 which was the daily 4sma and rebounded.

    Reached my target, after adjustments of course.

  10. Ana Says:

    $SPX $ES

    We are at the top of the channel.

    More lows to come.

    https://invst.ly/8wlr8

  11. Ana Says:

    $SPX $ES

    Here we go, breaking to the downside, might backcheck before it falls.

    https://invst.ly/8wmih

  12. Sherri Says:

    Armstrong today:

    “While the Dow barely exceeded Friday’s high on Monday, that was not the case in the NASDAQ. Yet all three closed lower on Monday. We are still in this choppy consolidation. Since we did elect a Weekly Bullish on Friday in the Dow, that put us on warning that the decline would at least pause. This is why we NEVER enter trades in ANTICIPATION of anything. Only on the Reversals.

    The NASDAQ made a new high today and the Dow did not. This is reflected in the Arrays which are different between the three indexes right now. Keep in mind that the NASDAQ peaked in August, S&P500 in September, and the DOW during the first week of October. So we should NOT expect all to behave in agreement. Nevertheless, this is also an indication that we are not looking at a MAJOR Crash that would reverse the long-term trend.

    So NEVER NEVER NEVER Anticipate. Be dispassionate about the market for remember it is always going to be your own EMOTIONS that get the best of your judgement. ONLY trade on Reversals!!!!! Always let the market PROVE its direction. It is always the master of deception.

    We are still in a position where we can make new lows before the elections. The number to watch is 267670 on the Cash S&P500. We stopped last week at 271051. So we have important support beneath last week’s low that is not much further down. So do not get all bearish expecting the world just yet.

    This is going to stay choppy into next week. The markets are still trying to figure out the direction as we have domestic players are bearish and international players more bearish on their home fronts. So this clash of views is responsible for the choppy pattern we should expect at this time.

    The share markets should see some sort of a trend take shape for the elections.

    Daily closings BELOW 276680 in the Cash S&P500, 24898 in the Dow, and 27400 in the NASDAQ would suggest that we will retest the lows.

    REMEMBER – Position trading makes money – short-term trading more often than not loses money because people trade emotionally. Trade for the trend – not the daily swings without reversals!!!!”

  13. tawny Says:

    Sherri

    Thanks again. Armstrong is pretty adamant about trading less – only on reversals… I will keep in mind. But I have a little cash and looking for opp. to buy.

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