Tech Talk for Friday January 18th 2019

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Pre-opening Comments for Friday January 18th 2018

U.S. equity index futures were higher this morning. S&P 500 futures were up 11 points in pre-opening trade.

The Canadian Dollar added 0.15 to 75.54 following release of the December Consumer Price Index. Consensus was a year-over-year increase of 1.8% versus 1.7% in November. Actual was 2.0%.

Netflix dropped $11.21 to $341.98 after reporting less than consensus fourth quarter revenues. Target on the stock was raised by Wedbush, Raymond James, JP Morgan, Moness and Oppenheimer.

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Procter & Gamble (PG $90.64) is expected to open higher after JP Morgan raised its target price to $106 from $100.

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VF Corp gained $7.24 to $80.50 after reporting higher than consensus fourth quarter earnings and revenues. The company also raised its guidance.

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American Express dropped $2.25 to $97.24 after reporting lower than consensus fourth quarter earnings.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/01/17/stock-market-outlook-for-january-18-2019/

Note seasonality charts on the Philly Fed Index and Freight Shipments.

 

Observation

U.S. equity markets are closed on Monday for the Martin Luther King holiday. Next Tech Talk report is released on Monday.

 

StockTwits Released Yesterday @EquityClock

Days of supply of Gasoline showing highest level for this time of year in over two decades. equityclock.com/2019/01/16/… $USO $CL_F $UGA $RB_F

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Philadelphia #Manufacturing Business Outlook comes in at +11.3 (NSA), stronger than the +5.2 that is average for January. $MACRO #Economy

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Technical action by S&P 500 stocks to 10:00: Quiet. Intermediate breakout: $SBAC. No breakdowns

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Editor’s Note: After 10:00 AM EST, intermediate breakouts included OI, PCAR, NKE, BAX, BAC and WMB.

Husky Energy $HSE.CA, a TSX 60 stock moved above $17.11 after halting its offer to acquire MEG Energy

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Canadian Utilities $CU.CA moved above $32.90 extending an intermediate uptrend.

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Nike $NKE, a Dow Jones Industrial stock moved above $79.00 extending an intermediate uptrend

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‘Tis the season for Nike $NKE to move higher to late April!

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Crescent Point Energy $CPG.CA, a TSX 60 stock moved above $4.57 completing a double bottom pattern

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‘Tis the season for Crescent Point Energy $CPG.CA and TSX energy stocks to move higher to May!

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BMO Emerging Markets ETF $ZEM.CA moved above $19.19 completing a reverse Head & Shoulders pattern

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Editor’s Note: iShares Emerging Markets $EEM completed a similar pattern on a move above $41.53.

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‘Tis the season for Emerging Markets ETFs to move higher to May! $EEM $ZEM.CA $XEM.CA

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Bank of America $BAC moved above $28.87 and $28.96 extending an intermediate uptrend

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Tis the season for Bank of America $BAC to move higher to mid-March!

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iShares Frontier ETF $FM moved above $27.80 completing a double bottom pattern on a move above $27.80.

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for January 17th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for January 17th 2019

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Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for January 17th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

2019 World Outlook Financial Conference

Tickets Still Available
Feb 1st & 2nd in Vancouver

CLICK to ORDER

 

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

 

S&P 500 Momentum Barometer

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Percent added 9.80 to 56.00 yesterday. It remains intermediate neutral, but continues to trend higher.

 

TSX Momentum Barometer

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Percent added another 5.04 to 76.47 yesterday. It remains intermediate overbought, but continues to trend higher.

 

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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27 Responses to “Tech Talk for Friday January 18th 2019”

  1. Mary Says:

    *** Gary or Bruce ***

    Could you please help me understand Armstrong’s last report. My take is the market will rally until the end of next week then change direction. I am trading too short term thereby leaving profits on the table.

    ***The market closed too far above the Daily Bullish so it moves back to retest. The fact that the market is not running away to the upside, warns we may not be able to reach the 25,000 area by Monday. We do have a Daily Bullish at 24952. There just appears to be a large gap between the 24,000 and 25,000 levels.**Armstrong

  2. bruce Says:

    mary
    my understanding he expects the market to change direction from up to down next week followed by a panic cycle week the end of January……a test of 2346 dec. lows but not a major crash……I may be all wrong but that s my take……he s hard to understand clearly……i would like to hear other views on Armstrong……

  3. Mary Says:

    Bruce

    The S&P surpassed the resistance of 2640 as mentioned by Ana and Ron. I believe the Dow will surpass 25000 as well soon.

    Thanks for your thoughts. Happy trading!

  4. Larry/ON Says:

    Cdn Banks – ZEB cleared 28.00 and 200day MA coming up at 28.43. I think all of them have broken their downtrend lines now. Tech Talk’s posting on BAC is a bell-weather for the sector and it bodes well for TD. Interesting was the comment on BNN this morning that international money has remained skeptical about Cdn banks so the rally has been domestically driven. I would say that that is a positive as they may be latecomers as they have been in the past.
    US tech has now broken it’s downtrend line on QQQ and SPX and QQQ have room to run another 4% before they get to the 200day MA so everything should stay positive in the near term.

  5. wsto Says:

    Re Cdn banks, saw this article, maybe of interest to some of you:

    A top-performing U.S. hedge fund is shorting Canada’s banks

    https://www.bnnbloomberg.ca/a-top-performing-u-s-hedge-fund-is-shorting-canada-s-banks-1.1200486

  6. Tawny Says:

    Gary

    Hoping we can get Armstrong’s latest from late last night, titled January 21st which is a holiday and thinking any action I might want to take (selling a little to buy lower later?) might be prudent to take should be considered before end of today… so it would be good to know his latest.

  7. Larry/ON Says:

    Re 5. That top performing US hedge fund has a total of $55 million in assets. They are not market movers. The shorts have been doing this for years and years and they are proven wrong every time. Market moving news in US-China trade negotiations – looking positive

    https://www.cnbc.com/2019/01/18/stocks-us-china-trade-talks-take-center-stage-shutdown-earnings.html

  8. Ana Says:

    $SPX $ES

    Trading on the 5 minute, ready to short at 2669.

    Fits with my lower head and shoulder line that that took us down in December, hopefully, we are now backchecking.

    I could be wrong here.

  9. Larry/ON Says:

    Semis are breaking out if you have the stomach for the trade.

  10. Ana Says:

    #3. Mary,

    “The S&P surpassed the resistance of 2640 as mentioned by Ana…”

    Sorry, Mary, I did not think that I ever stressed this number. I was always looking for the elusive bottom shoulder line of the head and shoulders that took us to the bottom in December. When it was not easily identified, then I started to look at the gaps for possible clues to that line.

    I am still in my short and added another position at a higher level. It is a short trade, then will recalculate.

  11. Ron/BC Says:

    Here is the $SPX Daily chart again that I’ve posted a few times. Price has cleared the 2930 price resistance today with a breakaway gap which is bullish. Don’t know why but don’t care either. So the next question is where is the next resistance point. That is right at 2700 which is the falling 200ema and as well the downtrendline from October and November. That is a lot of resistance for short sellers to short. The gap up today suggests typical covering of short sales at this 2930 resistance which was the closing lows of October and December before price broke down and went over the waterfall. Just 17pts above the downtrendline and 200ema resistance is the Fibonacci 61.8% retracement level of the October to December plunge. I would be not only surprised but shocked if price can clear 2700 without a significant pullback first to the 2880-2930 zone again at least. A break below this level would suggest a full blown bear market ahead. On the bearish side note the $SPX is still having lower lows and lower highs and the 20ema is still below the 50ema which is below the 200ema. And price has still not cleared the 200ema and downtrendline and the Long Term Modified MACD is still below the zero line. The selloff in December was typical “Capitulation” looking at the high volume and straight down move. So a significant rally could be expected from such a “throw in the towel” selloff. But note the low comparative volume on this bounce back. The big test now is 2700-2714 if it can even reach that level. So no cigars to hand out yet…………

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=1&mn=0&dy=0&id=p8653249403c&a=582707024

  12. Ron/BC Says:

    RE:#11 Should read: Price has cleared the “2630” price resistance today.

  13. Ron/BC Says:

    RE:#11 Also should read: I would be not only surprised but shocked if price can clear 2700 without a significant pullback first to the “2580-2630” zone again at least. (not 2880-2930)
    Tired today. Working on my condo late yesterday and I think I’m getting too old for this S—. Golfing for 4 days in a row before yesterday didn’t help either I don’t think as much as it is supposed to be healthy.

  14. Ron/BC Says:

    Here is a Daily 6 month chart of the $SPX which is easier to read. Same conclusion as in post #11.

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=6&dy=0&id=p9267418538c&a=639595909

  15. Ana Says:

    #5. wsto

    The US hedge funds are a constant source of entertainment for Canadians. To have the audacity to appear on BNN and be so illiterate about the mortgage industry in Canada takes some nerve.

    “Crescat Capital sees the Canadian economy heading for recession as the housing market buckles.” “Canadian banks will be left holding the bag and the ones to suffer from what is likely to be a major economic recession.”

    The reason why the Canadian Banks are so strong is because CMHC loan insurance provides additional security to the bank.

    CMHC is financially very strong, providing 4.7 Billion in dividends to the Government of Canda. That was for the year of 2017.

    Basically you are wasting your time listening to this foolish hedge fund. They should focus on their own mess in the US!

  16. Mary Says:

    Ana and Ron

    RE: #3 – Sorry maybe I read those numbers quoted above elsewhere but definitely heard it on the Fast Money show.

  17. Ron/BC Says:

    Here is a chart of the Canadian banks ETF:ZEB.to. One can see the all time high of 2732 with this ETF in early 2017. After a rally to over 29 pulled back and successfully tested this breakout now support level twice in early 2018 and rallied to over 30 after that. Price came down and tested this price again twice in October and November successfully and bounced back to 28.40 in November and then plunged straight down to 25 in late December. Since then price has rallied straight up and is approaching that November high of 2840 resistance which is also the Fibonacci 61.8% retracment level. Getting through that will be a chore. A pullback to 27.32 would be a typical move now and is major support again. I would not chase this ‘feel good’ move. The above ratio chart of ZEB.to:ZBK.to (U.S.Banks ETF) is surprising that even with this straight up move by the CD ETF:ZEB.to it has underperformed the U.S. ZBK.to since late Dec. ZBK.to is presently bumping up against major price resistance.

    https://stockcharts.com/h-sc/ui?s=ZEB.TO&p=D&yr=2&mn=0&dy=0&id=p2453795648c&a=641102536

    https://stockcharts.com/h-sc/ui?s=ZBK.TO&p=D&yr=3&mn=0&dy=0&id=p4559071935c&a=579408697

  18. Ron/BC Says:

    Mary
    Your comment on 2640 by me was only over by 10pts. Close enough………..compared to my type Oh’s it’s not that bad………………..

  19. Larry/ON Says:

    Semis – Watch them the next couple of days. They are breaking the same downtrend line everything else has been going through. As a gauge of a bet on economic growth they are a leader. If semis take off the next few trading days this advance will have real legs. Still uncertain on semis but look at BAC and now KBE. As far as shorting Cdn banks is concerned they won’t go opposite to US banks. For anyone following it is the alternative lenders and regional Cdn banks that are stalling while the big five are rallying. The smaller ones went far ahead and now it’s the larger ones that are catching up. If anyone is going to short they target the small fry.

  20. JP/BC Says:

    Re #5: Ana, you are likely quite correct that hedge fund managers on BNN generally don’t know what they are talking about. What does surprise me is that the Canadian banks are lowering mortgage rates at the same time the BOC is raising rates. Does that suggest they are low on customers?
    https://www.cbc.ca/amp/1.4981657

  21. Ana Says:

    #20. JP/BC

    Do not get me wrong, I think that the market will drop in the short future. Therefore, banks will go down with the rest of the stocks. However to state that it will happen because of the housing market and mortgage defaults is quite absurd.

    I guess I am just tired of hearing of the US hedge funds shorting anything in Canada. Perhaps they should mind their own business, which needs minding right now. They have a crazy man as their President and the rest of the Republicans who support him are crazy as well. Sorry! Obviously, I do not agree with the guru Armstrong on this matter. Perhaps his comments are making me outspoken. 😀

  22. GARY Says:

    Re Armstrong
    I’m still a working bloke for the most part, so reposting Armstrong’s private blog posts have to wait until the evenings (Pacific time).
    He speaks in riddles, and I don’t understand a lot of what he says.
    Here is his latest

    What we have going on in the Dow is a classic example that the Reversal System is great at – showing the gaps in markets. I explained that the Daily Bullish in the Dow was at 24089 but there was a GAP up to the first Weekly at the 25004 level. This is what happens when there are no reversals in an area going up or down. I look for the GAPS for big moves.

    This was the setup for the 1987 Crash. We elected a pair of Double Weekly Bearish and there was a GAP with nothing between there and the next Monthly. That GAP was filled in 2 days.

    ONLY a closing today ABOVE the Weekly Bullish would indicate follow-through to the upside. Otherwise, I would take profit against the Weekly Reversal, flip and place the stop just about the high achieved. It either works or it fails but the risk is low. Yes it can fail. But you do not lose the farm.
    Remember that timing is the MOST IMPORTANT. We are closing in on a Directional Change.

    QUESTION: Your reversals are amazing. The market fell back precisely to test the reversal and then stormed higher. Thank God you do not do mainstream media. I don’t know how they would handle your forecasts. My question is concerning the Monday since the markets are closed. I believe you have stated that the market can make the move the day before or day after. Could you clarify what happens when the ideal day for a target is closed.

    Thank you for opening my eyes to the hidden order.

    TKR

    ANSWER: Yes, you are correct. We could peak on the close on Friday or first thing Tuesday morning. However, the 21st is showing up in markets globally that will be open. So whatever this is, it appears to be a confidence issue and interestingly Prime Minister May must put forth a new BREXIT proposal by the 21st.

  23. JP/BC Says:

    Re #21 I prefer not to take sides on whether Democratic or Republican voters are the problem. I don’t live in the US so don’t know all the reasons why the previous administration was disliked. You can try and blame it on Russian political interference, but then why didn’t the Democrats do better in the midterms (when, presumably, the Russians were kept at bay)? I believe middle America has suffered more under both parties than we have in Canada. We shouldn’t get smug about that. We have had a free pass with our resources being in demand by countries like China. Unfortunately a majority think we can heed the shrill voices of the left wingers and close down these industries while maintaining our standard of living.

    We have benefited from a more highly educated population party because we make it a priority, but we also don’t have to deal with the huge number of people coming over the border from Mexico. I don’t want to debate the merrits of immigration. I think all can agree that in a knowledge based society an over supply of uneducated adults will, at some number, be bad for the economy. Especially if they can’t speak the native tongue. Canada has the luxury to decide how many immigrants (this may change with increased immigrants coming across from the tUS) is the right amount and where they come from. The US less so with so many crossing the border illegally. I was in Miami last November. I heard far more Spanish than English. Employees with poor English skills are the norm in the tourism industry. I am always polite to those I come in contact with (hey, I’m Canadian) but after a while it becomes tiring, especially when you don’t get what you asked for. Many times I would have rephrase what I was asking for…sometimes several times. I had to ask myself, what would it be like to live here as an English speaker? I concluded it would be a deal breaker. It would be a daily struggle. I should mention that I am horrible at learning a new language. Plus, it was more than just language. Cultural differences meant that I had a different understanding of what constituted good service.

    I picked on immigration as an example of differences from us and the US. There are others. I think that because the US is a superpower, more responsibility has been placed on them to police the world. This works when their economy is strong, but when the middle class is struggling they become more nationalistic, wanting tax dollars spent helping those at home instead of overseas. Trump is catering to that. To say the Democrats didn’t play a part in how the public came to feel abused would be naive. Americans are up to their armpits in debt and are asking where their taxes have gone.

    I don’t think either of the main political parties would be allowed by the establishment to make new choices that are (consistently) best for their people. So who am I to judge the motives of voting Americans? I’m not going to let the mainstream media (including in Canada) guide me. They are part of the establishment.

  24. bruce Says:

    tnx Gary

  25. Mary Says:

    Gary
    Thanks for the update. Appreciate!

  26. NRG Says:

    When Bulls Run Over Everything

    https://stockcharts.com/articles/canada/2019/01/weekend-market-roundup-2019-01-19-when-bulls-run-over-everything.html

  27. Tawny Says:

    Gary

    Thanks for the information about yourself… understandable that you cannot post until evenings or weekends. I am so grateful that you do share these posts.
    ….

    Yes, I agree Armstrong is difficult to understand. This statement is quite a surprise as I have never heard him make such a suggestion. He is comparing the current situation to the 1987 crash!

    “ONLY a closing today ABOVE the Weekly Bullish would indicate follow-through to the upside. Otherwise, I would take profit against the Weekly Reversal, flip and place the stop just about the high achieved. It either works or it fails but the risk is low. Yes it can fail. But you do not lose the farm.
    Remember that timing is the MOST IMPORTANT. We are closing in on a Directional Change.”

    My interpretation on the above is that if the closing is not above the weekly bullish – which it was not, that he is suggesting to take profits by placing stops at near the highs (on Friday?) … saying that this idea could fail, but at least you will not lose the farm (a ton of money). According to Socrates we face a directional change this week.

    Anyone else want to share thoughts on this latest from Armstrong. ???
    I did sell around half of most of my U.S. index ETF’s on Friday near the close as he had already talked about the Weekly bullish requirement of 250004 – which we did not make – and the warning of a directional change. I do plan to place several stops now or tomorrow since the US market is closed. Perhaps there will be some global news tomorrow that will be the trigger for the direction change.

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