Tech Talk for Tuesday November 27th 2018

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Pre-opening Comments for Tuesday November 27th

U.S. equity index futures were lower this morning. S&P 500 futures were down 12 points in pre-opening trade.

United Technologies slipped $1.98 to $126.00 after announcing plans to spinoff of its Otis and Carrier divisions.

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Bank of Nova Scotia (BNS $70.09 Cdn) is expected to open lower after reporting slightly lower than consensus fiscal fourth quarter earnings.

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Apple dropped $3.79 to $170.83 after President Trump confirmed his intention to increase tariffs on Chinese products. Apple’s iPhones are manufactured in China.

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Amazon (AMZN $1581.33) is expected to open higher after announcing that Cyber Monday was the biggest shopping day in the company’s history.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/11/26/stock-market-outlook-for-november-27-2018/

Note seasonality chart on Cocoa.

 

StockTwits Released Yesterday @EquityClock

Russia ETF $RSX moved below $20.08 in response to conflict with Ukraine extending an intermediate downtrend.

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CGI Group $GIB $GIB.CA, a TSX 60 stock moved above $63.61 U.S. and $82.20 Cdn. extending an intermediate uptrend.

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‘Tis the season for CGI Group $GIB $GIB.A.CA to move higher to the end of January!

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Technical action by S&P 500 stocks to 10:00: Quietly Bullish. Intermediate breakouts: $LEG $BEN $HLT. No breakdowns

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Editor’s Note: After 10:00, breakouts included UTX and GM. Breakdown: MNK.

United Technologies $UTX, a Dow Jones Industrial stock moved above $131.28 completing a short term reverse Head & Shoulders pattern.

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‘Tis the season for United Technologies $UTX to move higher to year end!

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General Motors $GM moved above $37.28 after announcing a restructure program completing a reverse Head & Shoulders pattern.

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Russell Metals $RUS.CA moved below $$23.08 extending an intermediate downtrend.

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for November 26th 2018

spx for nov 27

Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for November 26th 2018

crb for nov 27

Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for November 26th 2018

xlk for nov 27

Green: Increase from previous day

Red: Decrease from previous day

 

Keith Richards’ Blog

Keith says, “Chicken or Egg: which came first”. See:

https://www.valuetrend.ca/chicken-usd-or-egg-spx-which-came-first/

 

Technical Scoop

Courtesy of David Chapman and Enriched Investing. See link below for full report.

Bared Bear Claws, Beware Claus Gift, No Recession Yet, Oil’s Slippery Slope, Cheap Gold Money

It was not a very pleasant week for the markets. Markets fell globally. The bear is starting to bare his claws. But bear markets are tricky and they don’t just collapse all at once for even the worst of them. Think 1929-1932, 1973-1974, 2000-2002 and 2007-2009. All took upwards of two to three years. We have outlined in the past why we believe this one will be far worse than the mini-bears we witnessed in 2011 or 2015/2016. Our expectations are for a decline of at least 30% to 50% and possibly more. There is just too much debt and the problems that caused the 2007-2009 collapse have never been fully resolved. Couple that with trade wars, geopolitical tensions, political tensions and more and we have the potential basis for a “doozy” of a bear market.  The Canadian Dividend Strategy is designed to allocate to cash in a sustained down market and currently has a large cash position.

But there is some light. December is ranked as the #1 month for many markets including the S&P 500 while for others including the DJI and the NASDAQ it is ranked #2. December brings us the “Santa Claus” rally. But as we write beware if Santa fails to bring gifts. And there is some shine in gold despite gold being essentially flat last week. What was important was that unlike the stock markets it wasn’t down. Gold has a history of shining when all is else is failing. Speaking of failing, Bitcoin and the cryptocurrencies crashed again this past week with Bitcoin falling under $4,000. Bitcoin is now down roughly 80% in the past year. Its collapse is beginning to rank up there with many manias.

Bond yields fell this past week as the stock markets fell. That helped to narrow our Recession Watch Spread (page 18). Still we are more than a few months away from it turning negative. But then again things could change rapidly. Oil prices collapsed again this past week down to about $50. It was less than two months ago that oil prices were $76. Finally our Chart of the Week (page 27) looks at the relationship between gold and debt and as well the collapse in the purchasing power of the U.S. dollar in gold terms. Since 1971 when President Richard Nixon ended the gold standard debt has soared and gold prices have mostly moved higher in lockstep. But $1,000 doesn’t buy you much in the way of gold anymore. And if prices rise again to catch up to the rise in debt then that $1,000 will buy you even less gold. A prime reason why we have said gold is cheap and gold has history of being money. Our paper dollars is not money. It’s currency. Fiat currency. And it’s becoming worth less and less every day.

Have a great week!

DC

http://www.enrichedinvesting.com/PDF/Bared-Bear-Claws-Beware-Claus-Gift-No-Recession-Yet-Oils-Slippery-Slope-Cheap-Gold-Money.pdf

 

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http://www.equityclock.com/about/seasonal-advantage-portfolio/

 

S&P 500 Momentum Barometer

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The Barometer gained 6.20 to 36.20 yesterday. It remains intermediate oversold.

 

TSX Momentum Barometer

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The Barometer dropped 2.88 to 29.63 yesterday. 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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6 Responses to “Tech Talk for Tuesday November 27th 2018”

  1. Ron/BC Says:

    Here is a 3 year chart of the XIU.to again. The directional arrows are still bearish with no ‘stories’ necessary.

    https://stockcharts.com/h-sc/ui?s=XIU.TO&p=D&yr=3&mn=0&dy=0&id=p13572605163&a=579408596

  2. dutchcanuck Says:

    Just returned from a 2wk trip to California and noticed the yield curve at 10.7. Despite some ups and downs it is now perilously close to being inverted. I believe mr market is telling us this also.
    The Cal trip turned out to be somewhat unusual. While flying out to SF we smelled smoke in the cabin when we were over the Nebraska Rockies at 36000ft and some passengers started to panic. Then the pilot told us :nothing to worry about folks, the smoke is from the wildfires in Cal.
    Upon arrival we noticed people were walking around with heavy-duty masks on their faces and so did we for 10 days until heavy rains washed the particulates out of the air. Hard to eat and drink when wearing these darned things. This has been a heavy blow to Cal. with the devastation and loss of life. All-in-all not one of our best trips.

  3. Bernie Says:

    Ron/BC,

    Re: #9 yesterday
    In your link your comparison time frame was 5 years. If you move the slider to a 20 year period you see RY outperforming SPY annually with the best months being Feb to Apr and Jul to Sep. November becomes a 50/50 crap shoot. Overall the Canadian banks have outperformed all broad market equity indexes long term.

  4. Polish1 Says:

    ASNS huge volume today after they announced a merger with Private Firm X4
    https://www.stockcharts.com/h-sc/ui
    just trying to find a name that stands out for a trade in this mess

  5. Ron/BC Says:

    Bernie

    I just used the setting it was on as I haven’t played around with the settings much. So I didn’t cherry pick the 5 year period but 5 years is long enough for me for a comparison. I guess one could pick any time frame to compare. I prefer to use it with a single symbol to see what my odds are of a stock or currency to rise or fall in any given month. I did find it useful comparing the U.S.$ against the CD$ as there are fundamental factors with the U.S.$ that I’ve read about over the years suggesting a selloff in December and I’m not up on the fundamental reasons. Something to do with money transfers abroad etc. Dutchcannuck might have an explanation for this typical selloff of U.S.$ in December.

  6. Bernie Says:

    Ron/BC,

    I’ve never paid much attention to forex fluctuations, I prefer to stick with $CAD in my accounts. I haven’t used the comparison feature in Stockcharts Seasonality Charts, only for single securities. Not sure why they use a 5 year period as the default. Seasonality is usually considered a long term view, ie; 20 years if possible. That’s why I move the slider over to the max setting.

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