Tech Talk for Friday December 28th 2018

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Pre-opening Comments for Friday December 28th

U.S. equity index futures were higher this morning. S&P 500 futures were up 8 points in pre-opening trade.

TransOcean (RIG $6.71) is expected to open higher after receiving a five year drilling contract from Chevron valued at $830 million.

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Abercrombie & Fitch (ANF $19.28) is expected to open higher after Wedbush raised its target price to $19 from $17.

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Aphria (APHA $7.57 Cdn) is expected to open higher after Green Growth Brands announced plan to buy the company at $11.00 Cdn per share.

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Don Vialoux on Berman’s Call

Join us on BNNBloomberg at 11:00 AM EST on Monday

 

Observations

Another wild and crazy day in U.S. equity markets! They opened lower, but closed higher. The Dow Jones Industrial Average closed up 260 points after recovering from a 612 point loss in mid-day trading.

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StockTwits Released Yesterday @EquityClock

Technical action by S&P 500 stocks to 10:00: Nil

Editor’s Note: After 10:00 AM EST, one S&P 500 stock broke intermediate support: Kroger. None broke resistance.

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for December 27th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for December 27th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for December 27th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

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

 

S&P 500 Momentum Barometer

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The Barometer gained 3.80 to 8.20 yesterday. First signs of a technical bottom!

 

TSX Momentum Barometer

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The Barometer gained 5.74 to 21.31 yesterday. Signs of a technical bottom.

 

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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19 Responses to “Tech Talk for Friday December 28th 2018”

  1. Ana Says:

    $SPX $ES

    Can not break through this longer channel:

    https://invst.ly/9n3a6

  2. Ana Says:

    2. bruce

    Your post from yesterday: “for all my experience I should be a whole lot smarter……”

    I can say that as well and maybe we all could say that about the stock market and life in general.

    Are you day trading/swing trading or are you a long-term investor like Bernie?

  3. Ana Says:

    It is very important that we brake through this channel, otherwise, it will only be a bear flag. Oh, oh…

    https://invst.ly/9n3fa

    Then maybe 2141…

  4. Ron/BC Says:

    Here is the long term chart of the U.S. 10 year treasury yield again showing the RSI 8 sell signals crossing back below the 70 line. The breakout over the 31 year downtrendline and price resistance of 30.36 did not hold as the chart suggested it would not. This is the 6th time the RSI 8 sell signal has occurred in 31 years and each time saw the yield on the 10 year treasury fall for a very long time after with weak bounces on the way down to a low. So far it looks like a repeat performance. Would be interesting to see an in depth study on what the economic effects of this have been in the past.

    https://stockcharts.com/h-sc/ui?s=%24TNX&p=M&st=1986-10-01&id=p1259326520c&a=579408636

  5. bruce Says:

    ana
    never been a long term investor…..probably why i m not super rich…..a few shares of msft or wmt back in the 60s wouldnt have hurt…….bury them in the backyard…….i guess you could say i m a swing trader…….right now i m long a half dozen canadian energy stocks bought the last couple of weeks trying to pick the bottom of the tax loss selling season…..a week too early but looking better now…..

  6. Bernie Says:

    Great quotes I heard on BNN yesterday…

    (With investments) “Its better to be an optimist because there’s no such thing as a rich pesimist.”

    (When not diversified) “When the tide goes out you find out who’s not wearing swimming trunks.”

  7. FishFat Says:

    Ron/BC re: #4
    The Feds raised the benchmark interest rate four times this year. Each time by 0.25%. The consensus for 2019 is that they will raise the rate 3 more times. So, the chart for $TNX is suggesting that the 10-year yield is going to decline – while at the same time consensus is suggesting that the short-term benchmark interest rate is going to rise. Sounds like a flattening of the yield curve to me.
    FF

  8. Ron/BC Says:

    FishFat

    Well I created that Monthly chart a long time ago and was surprised how accurate the RSI 8 sell signal below the 70 line worked for seeing a long term decline in the U.S.10 Year Treasury Yield. Didn’t look like it would occur this time with the breakouts that failed and with everything booming again. But there it is once again with 10 year rates falling while the short term rates were rising. And the Feds predictions was there would be another 3 Fed rate hikes in 2019, but notice now they are not singing that tune anymore. The last 1/4 of 2018 has seen a sharp reversal including in the stock market. I just wish I was an informed economist that could predict with some accuracy what exactly the effects of a falling 10 year yield suggests. I would think it means a slow down in the economy which is very overdue. But that’s a wild guess. Maybe no one can figure out what the effect will be with any accuracy as there always variables mixed in. But that 10 year yield is very important to a lot of markets so can’t be ignored.

  9. FishFat Says:

    Ron/BC
    Stockcharts has an interesting clip on the relationship of the yield curve to the performance of the S&P500. If anyone is interested, click-on “Free Tools” on the Stockcharts opening webpage (you don’t need a membership for this). Then scroll to the bottom of the page to find and launch the “Dynamic Yield Curve” tool. From there select the “animate” button to start a clip that moves a cursor along the S&P 500 chart showing how the market response as the yield curve varies.

  10. Ron/BC Says:

    FishFat
    Thanks for that info. Would be nice to have someone monitor all this stuff full time and give an assessment of present and future likelihoods based on previous similar data without all the b.s.

  11. Bernie Says:

    Ron/BC,

    Have you heard of “4 year cycle reset”? Have a look at the BNN link of Javed Mirza’s Market Outlook. He mentions it a few more times in the program when giving his take on caller’s stock questions. I’ve heard of 7 year business cycles but can’t say I ever heard of this one. Comments?
    https://www.bnnbloomberg.ca/video/javed-mirza-s-market-outlook~1574421

  12. Ron/BC Says:

    Bernie

    I think the Cannacord guy is a typical fund manager that is saying buy,buy,buy and the volatility and selloff is over or close to being over with a very weak argument technically that is a major stretch of his imagination. Typical reaction. Reminds me of any real estate agent that I ever dealt with that says NOW is always the time to buy of course as they make their living off buyers. I’ve often told them I could throw them off the top of a high building and all the way down they’d be saying, “So far so good.” The only 4 year cycle I’ve ever heard of is the Presidential 4 year cycle. I think the Modified MACD arrows will keep investors safer than these fund managers ever will. But price technicals are still bearish but at the same time the long term bull market uptrendline from 2009 is still intact and needs to be tested ahead in my opinion. Meanwhile we are still in purgatory,lol.

  13. Bernie Says:

    Ron/BC,

    The guest analyst didn’t seem pushy to me but, yeah I agree he painted a rather rosy picture when most these days are either on the fence or bearish. Its funny, you were thinking real estate agent while I was thinking he’s either a politician putting lipstick on a pig to make it appear attractive…or maybe I know even less TA than I thought I did. I should email Keith Richards and ask him why he never educated viewers on the 4 year cycle reset before or gave mention of it in his books or articles.

  14. JP/BC Says:

    Thanks to everyone that regularly posts to this site. This daily commentary is particularly filled with valuable insights. Lots of wisdom with an appropriate amount of humility.

  15. Ron/BC Says:

    Bernie

    I’ve always been eager to learn as much as I can about financial markets since I could vote and read a ton of books and subscribed long ago to many gurus along the way. And while there is lots to be learned that is helpful to get by financially, most of these gurus are just making a living. And they know most people will not short stocks and will either ignore their portfolio until the news get better or sell out and not participate anymore. The newsletter writers and brokers and fund managers would go broke if most did this so must be pumping good news with every tool they can muster. They don’t have a choice. I used to write down a couple of my favorite guru’s comments and then look back at what they said over the last year (which isn’t a long time) and was invariably disappointed in their analysis. Now I just believe the charts as they don’t b.s. anyone with bullish stories for buyers. But the major players with deep pockets can turn those charts on a dime whenever they wish as well and do all the time. I guess that’s why I prefer real estate of any kind as you do have lots of time to get in and out even when the market starts to turn down or up. No one person or group has the kind of money to manipulate real estate prices. That is gratifying to know unlike the stock market that can plunge at any point due to a negative comment by a major Fund manager (gee, I wonder if they were short at the time) or most any other popular guru. But with all the selling since the October high and all the negative comments over the last month by so many other well known commentators this is likely a set up for a very big rally soon. That would be my guess. So we’ll see what the charts have to say about it. And bear markets and big selloffs historically have had the biggest rallies as short sellers have to cover with big money chasing them higher and dumb money joining in thinking it’s a new bull market. And then smart money shorts the high of that rally and then it just repeats.

  16. Ron/BC Says:

    Bernie
    Here is a chart of the $SPX from the 2009 low. Technically one could make a good argument that price has sold off and tested the the long term bull market trendline from 2009 as it is in the 2300 area. And it is very oversold as well with most oscillators showing just how oversold price got.
    And of special note see the Long Term Modified MACD 50,200,1 that shows the relationship between the 50ema and 200ema that most major firms use to determine bullish or bearish. See how it went below the zero line at major “price lows” in 2010, 2011 and 2015 and 2016 and is once again below the zero line for only the 5th time since 2008. Using that for timing has worked well. If I had a gun to my head and saw this M.MACD start to curl back up again I just might get long a bunch. With the long term uptrendline at roughly 2300 odds favour that level holding as major support. Lots of resistance on the way back up but then there usually is. I would be concerned about the M.MACD re-clearing the zero line if long though because if this is a new bear market that zero line just might not be re-cleared. (Had to throw that in.)

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=10&mn=0&dy=0&id=p2166087880c&a=579408698

  17. Roy Says:

    I agree with JP/BC in # 14
    I do not contribute much,but I appreciate the info from Ron.Bernie and others.
    Ive learned a lot from you two especially. Thanks for that and a Happy and prosperous 2019 to all.

  18. Bernie Says:

    Ron/BC,

    Re: #15
    Ron, everyone here loves to hear your stories and appreciates your selfless willingness to help others understand TA and how the markets work. If I don’t get the chance to get on here again tomorrow I’d like to take this opportunity to wish you, other blog members and the admin a Happy and healthy New Year. I hope its the best year yet for everyone!

  19. Bernie Says:

    Thank you Roy! I don’t feel that I’ve contributed that much here but I do appreciate your kind words 🙂

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