Tech Talk for Thursday December 6th 2018

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Pre-opening Comments for Thursday December 6th

U.S. equity index futures were lower this morning. S&P 500 futures were down 39 points in pre-opening trade. Index futures are responding to the arrest in Canada of Huawei’s Chief Financial Officer in response to a request by U.S. officials.

Index futures were virtually unchanged following release of economic news at 8:30 AM EST. Consensus for the U.S. October trade deficit was $55 billion. Actual was a deficit of $54.56 billion. Consensus for Weekly Jobless Claims was 225,000 versus 235,000 last week. Actual was 231,000.

Notably weaker were U.S. stocks such as Apple and Caterpillar that have extensive Chinese operations.

WTI Crude Oil dropped $1.37 to $51.52 prior to a decision on oil production by OPEC. Consensus is that OPEC will reduce production by at least 1 million barrels per day to stabilize prices.

Kroger (KR $28.64) is expected to open lower despite reporting higher than consensus third quarter sales and earnings.

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Facebook dropped $3.32 to 134.01 after Stifel Nicolaus downgraded the stock to Hold from Buy.

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Netflix fell $5.18 to $270.15 after Stifel Nicolaus lowered its target price to $380 from $474.

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H&R Block (HRB $) is expected to open higher after the company reported better than consensus fiscal second quarter revenues and earnings.

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StockTwits Released Yesterday @EquityClock

Another Canadian base metal stock breakout! Teck Resources $TECK.B.CA moved above $39.48 Cdn. completing a base building pattern.

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‘Tis the season for strength in base metal stocks to spring. ZMT.CA

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Laurentian Bank $LB.CA moved below $40.25 extending an intermediate downtrend despite a dividend increase, but lower than consensus Q4 EPS.

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Canadian Dollar $CDW.CA moved below U.S. 74.70 cents to 74.67 extending an intermediate downtrend following Bank of Canada statement.

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‘Tis the season for weakness in the Canadian Dollar!

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for December 5th 2018

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Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for December 5th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for December 5th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Interesting observation on gold/gold stocks by National Bank

PRECIOUS METALS: Seasonality Analysis – Seasonal Gold Rally Could Present a Golden Opportunity

Event: We take a look at the gold New Year rally driven by Chinese demand that has been a fairly consistent trend over the past five years, often leading to major price gains for the precious metal producers.

Key Takeaways: In this report we look at how Chinese demand influences gold prices heading into the Chinese New Year, which in 2019 is on February 5. The gifting of gold has long been tied to the Chinese New Year and we believe this is the primary driver behind the recent strong gold rallies in the December-January period realized since 2012. In the past several years we

have seen a bottom for the gold price in mid-December, followed by a relatively consistent short term rally into the early New Year. In our opinion, the best names to own for the potential December 2018-January 2019 gold rally are Agnico Eagle, IAMGOLD, Kirkland Lake and Yamana. In our view, the reason we believe some of the other higher NAV leveraged names may not perform as well as the four names listed above are for geopolitical reasons and/or the companies having a “show-me story” challenge that we believe are overhanging the stocks.

 

Editor’s Note: Agreed with the above comment! Gold and gold stocks have struggled recently due partially to tax loss selling pressures. These pressures likely will abate after mid-December when the typical period of seasonal strength from mid-December to the end of February arrives. Note that the National Bank analyst prefers Canadian producers. Recent weakness in the Canadian Dollar supports the preference. Canadian producers produce in Canadian Dollars and sell in U.S. Dollars. Owning a basket of the above stocks makes sense as their period of seasonal strength begins to show on the charts during the next couple of weeks.

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World Outlook Conference

Tech Talk is looking forward to presenting at Michael Campbell’s World Outlook Conference in Vancouver on February 1st and February 2nd. Lots of good speakers this year including my buddies Josef Schachter, John Johnston and Mark Leibovit!

 

Following is a link describing the conference:

http://moneytalks.net/events/world-outlook-conference-2019.html?mc_cid=f695ed769a&mc_eid=592546b4b5

 

Conference Details

 

When: Friday afternoon and evening, February 1st and all day Saturday, February 2nd, 2019

Where: Westin Bayshore Conference Centre, Vancouver BC
To Book Your TicketCLICK HERE or go to moneytalks.net

 

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

Sponsored By...



10 Responses to “Tech Talk for Thursday December 6th 2018”

  1. Ron/BC Says:

    Notice over the last few days $GOLD has cleared the December 2017 low of $1238 and held above it. This now resistance point was tested and failed to clear in August and again this October but seems to be clearing and holding above $1238 now. One can come up with a story of why but price is king and ‘if’ price can continue to hold and even just trade sideways for awhile above $1238 then this would be a meaningful breakout that doesn’t seem to be catching a lot of attention. I guess with the “Christmas Crash” stock holders are more concerned about messing their pants than looking at $GOLD.

    The Canadian dollar has broken the July low support at $74.70 as well finally. And that has been typically the high of the day so far. Would like to see it test 72 and would consider trading in my U.S.$.

    https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=2&mn=0&dy=0&id=p3763741632c&a=629116291

    https://stockcharts.com/h-sc/ui?s=%24CDW&p=D&yr=3&mn=0&dy=0&id=p64290519481&a=579408525

  2. Wayne Smith Says:

    Ron/BC,
    Ron – thanx for the charts. Opened a position in Goldcrap a few days ago at $ 9.50. A few traders from the comm site are leaving cryptos and heading back into Gold. Contango is building in the futures strip.

  3. Ron/BC Says:

    Wayne
    Well $GOLD might be rallying just because the basic stock market is selling off hard as often occurs. The acid test for $GOLD is to see if it can hold above $1238 once the broad market bounces back like it’s likely to do after a strong selloff. Been a long time since I traded Goldcorp for a rally. Used to be a good one to jump on. What is a concern is see GG break below the early 2016 low of $9.65. Not a good sign. And the above chart shows GG underperforming GLD also. Keep in mind tax loss selling in the $GOLD stocks and other weak markets could see further selling well into December. Don’t know exactly when the cut off date for that is though.

    https://stockcharts.com/h-sc/ui?s=GG&p=D&yr=10&mn=0&dy=0&id=p1974611404c&a=579408543

  4. Ron/BC Says:

    Wayne

    Here is a 3 year chart of Goldcorp (GG). Price while in a short term bullish Ascending Triangle still needs to breakout above the September/October lows which is also its downtrendline from July.

    https://stockcharts.com/h-sc/ui?s=GG&p=D&yr=3&mn=0&dy=0&id=p9973557262c&a=634768583

  5. Wayne Smith Says:

    Ron/BC,
    My chart is indicating a near term breakout of TTGD – the TSX Gold Index. I use that as a background indicator
    I also used to trade in and out of GG – the other was ABX which has had a nice run-up from 10.75.
    I entered with a small position and will add if GG breaks out above $ 10.00. No promises… but I am thinking that we may soon see a reversal in the USD.
    Not much else going on – volatility is increasing – so you need to be nimble. And… tax loss selling has a bit more to run ..

  6. Ron/BC Says:

    The Gold stock ETF:XGD.to has much the same pattern as other Gold stocks with an Ascending Triangle and bumping up against $10.80 price resistance. And so has ABX as well. Big test presently.
    https://stockcharts.com/h-sc/ui?s=XGD.TO&p=D&yr=2&mn=0&dy=0&id=p78978457000&a=579408427

    https://stockcharts.com/h-sc/ui?s=ABX&p=D&yr=4&mn=0&dy=0&id=p9750444327c&a=610725533&listNum=1

    The $GOLD stock that blows me away is KL that continues to outperform $GOLD.

    https://stockcharts.com/h-sc/ui?s=KL&p=D&yr=2&mn=0&dy=0&id=p2755807594c&a=579408498

  7. Wayne Smith Says:

    KL – one of the best performing Gold stocks. I bot it back in 2017 around $ 10.00. Then dumped it when it spiked a couple of bucks. It’s a top performer. Nice bounces off the 200.

    I also track XGD.
    Thanx for the charts!

  8. dutchcanuck Says:

    Last day for tax loss selling Dec27.

  9. Ron/BC Says:

    Dutchcanuck

    Thanks for the tip. Good to know…………

  10. Ana Says:

    $SPX Futures – December 18

    Watching this channel:

    https://invst.ly/9g4x2

    These are the economic reports for tomorrow:

    November Non-farm Payrolls to be released at 8:30 AM EST on Friday are expected to drop to 209,000 from 250,000 in October. November Unemployment Rate is expected to increase to remain unchanged at 3.7% set in October. November Hourly Earnings are expected to increase 0.3% versus a gain of 0.2% in October.

    November Canadian Employment to be released at 8:30 AM EST on Friday is expected to increase 15,000 versus a gain of 11,200 in October. November Unemployment Rate is expected to slip to 5.7% from 5.8% in October

    December Michigan Consumer Sentiment Index to be released at 10:00 AM EST on Friday is expected to slip to 97.0 from 97.5 in November.

    October Wholesale Inventories to be released at 10:00 AM EST on Friday are expected to increase 0.3% versus a gain of 0.7% in September.

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