Tech Talk for Friday October 26th 2018

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Pre-opening Comments for Friday October 26th

U.S. equity index futures were lower this morning. S&P 500 futures were down 24 points in pre-opening trade.

Index futures were recovered following release of the first estimate of third quarter real GDP. Consensus is growth at a 3.3% rate versus growth at a 4.2% rate in the second quarter. Actual was 3.5%.

Amazon plunged $147.17 to $1635.00 after reporting lower than consensus third quarter revenues.

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Alphabet fell $56.79 to $1046.80 after lowering guidance for the fourth quarter.

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Intel added $0.57 to $44.88 reporting higher than consensus third quarter results.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/10/25/stock-market-outlook-for-october-26-2018/

Note seasonality charts on Durable Goods Orders and the Forest Product Industry.

Observation

Yesterday, U.S. equity indices recovered most of their losses recorded on Wednesday. However, after the close, two heavy weight stocks in these indices (Amazon and Google) reported disappointing results implying a significant drop at the opening today. Caveat emptor!

 

StockTwits Released Yesterday @EquityClock

Technical action by S&P 500 stocks to 10:15: Bearish. No breakouts. Breakdowns: $HSY $LLY $MRK $SYK $UNH $ZBH $LMT $LUV $UNP $AMD $COO.

Editor’s Note: After 10:15 AM EDT, breakdowns included SYF,FL, FTI, NEM and RSG. No breakouts.

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Healthcare stocks dominated the breakdown list: $LLY $MRK $UNH $ZBH.

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Goldcorp $G.CA $GG, a TSX 60 stock moved below $12.74 and $9.75 U.S. extending an intermediate downtrend.

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Kinross Gold $KGC $K.CA, a TSX 60 stock moved below $2.67 U.S. extending an intermediate downtrend

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AltaGas $ALA.CA moved above $21.58 completing a double bottom pattern.

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Maple Leaf Foods $MFI.CA moved below $30.38 and $30.24 setting an intermediate downtrend

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Celestica $CLS.CA moved below $12.27 and $12.58 to a 2 year low extending an intermediate downtrend.

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Another Cdn. gold producer breakdown! Detour Gold $DGC.CA moved below $9.91 extending an intermediate downtrend.

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US Durable Goods Orders up 0.9% (NSA), weaker than the 6.5% increase that is average for the month. $MACRO #Economy #Manufacturing

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for October 25th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for October 25th 2018

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Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for October 25th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

S&P 500 Momentum Barometer

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The Barometer added 3.00 to 16.80 yesterday. It remains intermediate oversold.

 

TSX Momentum Barometer

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The Barometer slipped another 0.90 to a new intermediate cycle low at 15.77. It remains intermediate oversold.

 

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 Friday October 26th 2018”

  1. Sherri Says:

    Armstrong this morning:

    “The next target week has been highlighted by the computer as 11/05 in line with the elections. That is what this correction has been all about. Today, the key will be 24965 in the Dow, 26767 in the cash S&P for the closing. Do not forget that we also have three different highs. August for the NASDAQ, September for the S&P and October for the Dow. We should thus pay attention to the NASDAQ for here the ideal low was this week of 10/22 – not 11/05. Therefore, if the NASDAQ holds this week’s low for the next 2 weeks, look at this as a leading indicator.

    We still have this problem of a stock market crash produces the flight to quality as cash runs to bonds. But bonds are in trouble on this cycle so it makes no sense that we are looking at a major correction here in equities just yet. The only way that unfolds is a true Dark Age type meltdown whereby the underlying capital formation is wiped out. We do not appear to be at such a crossroads at this stage.

    he S&P Array does show a Directional Change this week. This is why I am warning DO NOT Anticipate electing Weekly Bearish Reversals just yet. Let the market reveal its intentions.

    In the Dow, we need a closing BELOW 24965 today to signal a further decline into the elections. A closing BELOW 24579 in the Dow today would warn of entering CRASH MODE so that would reflect a sharper decline to test the monthly level of support. A closing today ABOVE 25588, which is unlikely, would signal a cycle inversion and a run to the highs.

    The S&P500 the number is 26767 and a closing below that will also point to a potential low going into the elections. To stabilize the market even briefly where we consolidate requires a closing ABOVE 268360 today.

    When we turn to the NASDAQ, we have fallen back to test the original Uptrend Channel where the top rests at 736693. We reached this week a low at 709900. We ABSOLUTELY need a closing ABOVE 719716 to signal that we “may” have a low in place this week. The more solid number will be 735430. Our Weekly Bearish Reversal here lies in wait at 708482. A closing below that will warn that the NASDAQ may simply be overpowered by the election cycle and head down into the week of 11/05.

    Therefore, the numbers to watch today at 24965 in the Dow, 26767 in S&P and 709482 in the NASDAQ. Electing all three and we are in CRASH MODE for the elections. Even a mixed bag would point lower but not a crash type affair just yet. Avoiding ALL three would not relieve the correction, it would signal consolidation.

    We do not see this market coming to a decision until after the election.”

    His comments are accompanied by charts and his arrays to help explain what he’s saying.
    Also, for those who don’t understand his methods, trying going to his Socrates website. There are links to explain everything.

  2. Kam Says:

    MU,

    Now it has dropped to actual target. Trading $34.65

    All should pay attention to Europe close lately. It closes 830 am pst. Market used to bottom before that and take off after 830 am. But for some time now, it falls before and when EU closes, it falls even further. Just a suggestion.

    Spx,
    We are within the target zone of wave A 2587-2640 . So watch for some bottom action. Then B can be towards 2850 and a wave C towards 21-2200. Ouch. If you guys remember, that is 20-30% correction I posted before what EW thinking. Let’s take one step at a time. Lol

  3. Ron/BC Says:

    The U.S.10 year yield chart broke out above the May high of 31.15 in early October and ran up to 32.48. Price has pulled back but the breakout point has not held as support. Expect price to test the uptrendline ahead if not further to the 28 area.

    https://stockcharts.com/h-sc/ui?s=%24TNX&p=D&yr=2&mn=0&dy=0&id=p87192277974&a=579408365

  4. bruce Says:

    tnx Sherri……..always interesting to read…….

  5. Mary Says:

    Ana:

    Thanks for your update last night. Never knew waves can happen after hours, so A, B and C today. Ha! Wish if I had the knowledge to recognize these patterns. Made some of my losses back but had gained quite a lot from Jan to July approximately then got greedy.

    Sherri, Ron B/C and Kam and others

    Thanks for sharing your knowledge, charts and updates.

  6. Kam Says:

    SPX,

    We need to hold 2639-2652 here to have a trade-able bottom of a wave. Otherwise break below target 2587-2600. SPX bounced of the major support form 2016 low.
    https://imgur.com/pAkXCyu
    Maybe RON/BC might post a long term chart as I can’t on stockcharts.

    Tough market to trade. Can’t do fast moves day trades anymore with work. Cash is a big position folks. Just sit it out on take small positions. Maybe look for sectors which got killed more to bounce first.

  7. Vik Says:

    Therefore, the numbers to watch today at 24965 in the Dow, 26767 in S&P and 709482 in the NASDAQ. Electing all three and we are in CRASH MODE for the elections. Even a mixed bag would point lower but not a crash type affair just yet. Avoiding ALL three would not relieve the correction, it would signal consolidation.

    Close is :
    DOW 24688
    SP 2658
    NASDAQ 7167

    Yikes, looks we are in ‘crash mode’ as per Armstrong?

  8. Ron/BC Says:

    Kam

    Here are a few $SPX charts. Prices are testing the uptrendline from the low in early 2016. A break of that uptrendline on the Dow would see price test the 2018 spring low.

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=W&st=1994-03-10&id=p82523657302&a=579408389

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=M&st=1980-09-20&id=p08009035153&a=579408442

  9. Ron/BC Says:

    Kam

    And a couple more:

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=M&st=1980-09-20&id=p08009035153&a=579408442

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=3&mn=0&dy=0&id=p83111133340&a=579408698

  10. Ron/BC Says:

    Kam

    Here is the DOW as well. The uptrendline support from the 2009 low is about 19000 which is close to the 2015 high support and the Fib 61.8% retracment of the bull market is close to the 2007 high of 14100. Sooner or later these will be tested. The very long term uptrendline is at 10000.

    https://stockcharts.com/h-sc/ui?s=%24INDU&p=D&st=1975-12-15&id=p40479537000&a=579408295

    https://stockcharts.com/h-sc/ui?s=%24INDU&p=D&yr=3&mn=0&dy=0&id=p55574111485&a=579408678

  11. Bernie Says:

    Sorry, I just can’t get excited about where the market is going. I’m content with sitting back, doing nothing and being the messenger.

    https://www.5iresearch.ca/blog/what-to-do-in-a-correction

  12. Muntazir Says:

    Kam,

    You commented on MU. I had bought in jun for 52.85 & sold Aug 55 call for 3.95?. expired worthless then in aug sold oct 55 call & again expired. Yesterday bought 100 ( double position) & cost 44+ & sold 45 cc for april.Thats my story.
    Thanks to you & all posters for their comments – I try to read them all.

  13. Ron/BC Says:

    The Canadian banks have just tagged important price support levels (at least on the NYSE in U.S.$ charts) along with long tails and a high Friday close. Looks like a nice bounce back should be seen early next week. And nooooooooooooo that is not a guarantee,LOL……….Thankfully I don’t own any stocks that are under water so don’t really care what the market does. But if we see a highly likely bounce I just might join the party (briefly).

  14. JP/BC Says:

    Re#13. ZEB is just above a major support level. Will it respect it? Time will tell.
    https://stockcharts.com/h-sc/ui?s=ZEB.TO&p=D&yr=2&mn=0&dy=0&id=p05148583196&a=579408450

  15. Ron/BC Says:

    JP/BC
    RE: #14: The ratio chart above of ZEB.to is certainly outperforming the U.S. Regional Bank ETF:KRE strongly as well as outperforming the other U.S. Bank ETFs and BAC.

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