Tech Talk for Monday February 11th 2019

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Pre-opening Comment for Monday February 11th

U.S. equity index futures were higher this morning. S&P 500 futures were up 10 points in pre-opening trade.

Tapestry (TPR $33.86) is expected to open lower after MKM Partners lowered its target price to $52 from $63.

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Applied Materials (AMAT $39.78) is expected to open lower after Stifel Nicolaus lowered its target price to $53 from $63.

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Cameco (CCO $16.39 Cdn) is expected to open higher after reporting higher than consensus fourth quarter earnings.

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Restaurant Brands International (QSR $83.08 Cdn) is expected to open higher after reporting higher than consensus fourth quarter earnings.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/02/09/stock-market-outlook-for-february-11-2019/

Note seasonality charts on Canadian Employment and TSX Composite relative to the S&P 500.

 

Jon Vialoux on Market Call Tonight

 

Market Outlook

https://www.bnnbloomberg.ca/video/jon-vialoux-s-market-outlook~1607635

Top Picks

https://www.bnnbloomberg.ca/video/jon-vialoux-s-top-picks~1607708

Past Picks

https://www.bnnbloomberg.ca/video/jon-vialoux-s-past-picks~1607656

 

 

WALL STREET RAW RADIO 

SATURDAY, FEBRUARY 9, 2019

WITH YOUR HOST, MARK LEIBOVIT

SPECIAL GUESTS: DON VIALOUX, RALPH CASE, HENRY WEINGARTEN AND SINCLAIR NOE.

http://tinyurl.com/yyj57bmx

 

Excerpts from Don Vialoux’s comments on Wall Street Raw

Congratulations to traders who invested during the recent extremely oversold Bear Market Rally! Since December 24th, the S&P 500 Index has gained 16%, the Dow Jones Industrial Average has advanced 17% and the TSX Composite has tacked on 14%. Gains were most notable by economic sensitive sectors such as energy (up 22%), technology (up 19%), consumer discretionary (up 19%) and industrial sectors (up 23%)

Add the cannabis stocks and related ETFs to the list. The Horizons Medical Marijuana ETF (HMMJ) advanced an amazing 71% during the past six weeks.

History tells us that bear market recoveries from the extremely oversold level reached on December 24th follows a regular pattern. Similar circumstances occurred in July 2002, November 2008 and August 2011. In each case, North American equity markets recorded strong gains over the next six weeks, rolled over and dropped below their previous lows.

History is about to repeat. On Thursday, daily technical indicators including Stochastics, RSI and MACD began to roll over for the first time in six weeks for a wide variety of equity indices, commodities and sectors.

One of the reasons for expected weakness in U.S. equity markets in the short term is a change in U.S. political trends that started to have an impact after the State of the Union address last Tuesday. Democrats in the House and Senate announced several initiatives including:

· A proposal to restrict share buybacks

· An investigation on perceived unfair low fines on corporations that allegedly acted badly

· Announcement of a “Green New Deal” that effectively will shut down the coal industry over the next 10 years.

· A tax on U.S. equity transactions.

Now is a good time for investors to take trading profits.

 

The Bottom Line

The bear market rally in U.S. and Canadian equity markets showed technical signs of ending last week. History shows that North American equity markets likely entered at least a short term correction late last week that potentially could test lows set on December 24th.

 

Observations

Technical action by individual S&P 500 stocks was bullish last week. Number of stocks breaking intermediate resistance totaled 64 while number of stocks breaking support totaled 10. The Up/Down ratio rose to (151/269=) 0.56 from 0.37. However, most of the breakdowns occurred on Thursday and Friday.

Fourth quarter earnings reports by major U.S. companies continue to pour in this week. Another 65 S&P 500 companies and two Dow Jones Industrial company are scheduled to report. See separate report below.

Medium term technical indicators for U.S. equity markets (e.g. Percent of stocks trading above their 50 day moving average, Bullish Percent Index) continued trending higher last week. See charts near the end of this report

Medium term technical indicators in Canada also continued trending higher last week. See charts near the end of this report.

Short term technical indicators for U.S. markets and sectors (20 day moving averages, short term momentum) have rolled over from overbought levels.

Short term technical indicators for Canadian markets and sectors also have rolled over from an overbought level.

Short term political concerns remain elevated. Issues include heightened tariff wars between the U.S. and China, possibly another shut down of the government and expected release of the Mueller report.

Results to date from reporting S&P 500 companies have been encouraging. At the end of last week, 66% of S&P 500 companies had reported quarterly results: 71% beat consensus earnings estimates and 62% beat consensus revenue estimates. Consensus now calls for a 13.3%, increase in fourth quarter earnings (up from 12.4% last week) and a 7.0% increase in revenues on a year-over-year basis (up from 6.6% last week).

Prospects for S&P 500 were reduced once again. According to FactSet, first quarter earnings are expected to decline 1.7% but revenues are expected to increase 5.4%. Second quarter earnings are expected to increase 1.2% and revenues are expected to increase 4.7%. Third quarter earnings are expected to increase 2.5% and revenues are expected to increase 4.5%. Fourth quarter earnings are expected to increase 9.0% and revenues are expected to increase 5.0%. For all of 2019, earnings are expected to increase 5.0% and revenues are expected to increase 5.1%.

Major U.S. companies are seeking places to invest their new found cash flow following changes in U.S. tax laws. Look for additional news about share buybacks, increased dividends, take overs, employee bonuses and wage increases with release of fourth quarter results (e.g. Bank of America’s $2.5 billion share buyback program announced last week)

Seasonal influences in the first and second quarters of a U.S. Pre-Presidential Election Year are favourable. Gains this year already have exceeded average gains in the first and second quarters.

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Economic News This Week

Canadian December Trade Deficit to be released at 8:30 AM EST on Monday. November Deficit was $2.06 billion.

U.S. January Consumer Price Index to be released at 8:30 AM EST on Wednesday is expected to increase 0.1% versus a drop of 0.1% in December. Excluding food and energy, January Consumer Price Index is expected to increase 0.2% versus a gain of 0.2% in December.

Weekly Jobless Claims to be released at 8:30 AM EST on Thursday are expected to versus 234,000 last week.

January Producer Price Index to be released at 8:30 AM EST on Thursday is expected to increase 0.1% versus a decline of 0.2% in December. Excluding food and energy, January Producer Price Index is expected to increased 0.2% versus a decline of 0.1% in December.

November Business Inventories to be released at 10:00 AM EST on Thursday are expected to increase 0.3% versus a gain of 0.6% in October.

February Empire State Manufacturing Survey to be released at 8:30 AM EST on Friday is expected to increase to 6.00 from 3.90 in January.

January Capacity Utilization to be released at 9:15 AM EST on Friday is expected to remain unchanged from December at 78.7. January Industrial Production is expected to increase 0.2% versus a gain of 0.3% in December.

February Michigan Consumer Sentiment Index to be released at 10:00 AM EST on Friday is expected to increase to 94.5 from 91.2 in January.

 

Selected Earnings News This Week

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Trader’s Corner.

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for February 8th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for February 8th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for February 8th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Technical Scores

Calculated as follows:

Intermediate Uptrend based on at least 20 trading days: Score 2

          (Higher highs and higher lows)

Intermediate Neutral trend: Score 0

          (Not up or down)

Intermediate Downtrend: Score -2

          (Lower highs and lower lows)

Outperformance relative to the S&P 500 Index: Score: 2

Neutral Performance relative to the S&P 500 Index: 0

Underperformance relative to the S&P 500 Index: Score –2

Above 20 day moving average: Score 1

At 20 day moving average: Score: 0

Below 20 day moving average: –1

Up trending momentum indicators (Daily Stochastics, RSI and MACD): 1

Mixed momentum indicators: 0

Down trending momentum indicators: –1

Technical scores range from -6 to +6. Technical buy signals based on the above guidelines start when a security advances to at least 0.0, but preferably 2.0 or higher. Technical sell/short signals start when a security descends to 0, but preferably -2.0 or lower.

 

Long positions require maintaining a technical score of -2.0 or higher. Conversely, a short position requires maintaining a technical score of +2.0 or lower

 

Changes Last Week

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S&P 500 Momentum Barometer

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Percent of S&P 500 stocks trading above their 50 day moving average dropped last week to 80.80 from 86.20. Percent remains intermediate overbought and showing early signs of rolling over.

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Bullish Percent Index for S&P 500 stocks increased last week to 61.80 from 59.40. The Index is intermediate overbought and showing early signs of rolling over.

 

TSX Momentum Barometer

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Percent of TSX stocks trading above their 50 day moving average dropped last week to 81.28 from 82.28. Percent remains intermediate overbought and showing early signs of rolling over.

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Bullish Percent Index for TSX stocks increased last week to 51.88 from 47.28.

 

StockTwits Released on Friday @EquityClock

Technical action by S&P 500 stocks to 10:00: Bullish. Intermediate breakouts: $EXPE $MHK $MAT $NLSN. Breakdown: HSIC.

Editor’s Note: After 10:00 AM EST, breakouts included EA and GRMN. Breakdowns: K, GT, ETR and ES

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

 

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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10 Responses to “Tech Talk for Monday February 11th 2019”

  1. NRG Says:

    50K in Tax Free dividends per year. I plan on adapting this for my spouse this year.

    https://business.financialpost.com/personal-finance/you-can-earn-50k-in-tax-free-dividends-but-theres-a-catch-you-cant-have-a-job

  2. Bernie Says:

    Ron/BC,

    Sorry to hear about your crazy weather. It’s been colder than normal in the Kootenays but less snow than the last 2 winters…so far anyway.

    Am away from my desktop this weekend so I can’t check historicals on here very well. Seems to me we had a discussion about Nick/NV a few months ago. I think I checked the forum historicals to find out when he last commented. I could be wrong but I think it was early Feb and he was in Palm Springs. I’ll check again in the next few days when we get back home.

  3. Ana Says:

    “Extreme wind chill values between minus 40 and minus 45 will continue over many parts of Alberta.”

    “Edmonton weather: It’s like The Neverending Story but without the flying dog-dragons”

    The Edmonton Journal

  4. Ana Says:

    $SPX Futures,

    Well, finally it looks like the bottom support line has been broken and back checked. The support line is all the way back from December 27th.

    https://invst.ly/a077w

  5. Bernie Says:

    Ron/BC,

    I managed to check back with my tablet. Mick/NV’s last comment was a brief one addressed to you on March 2nd. He had just checked in to his accommodation in Palm Springs.

  6. Ron/BC Says:

    Bernie
    Thanks for #5. Perhaps he’s retired from investing too. When I was in Palm Springs I really loved the city as it’s so easy to get around and the weather is great without being too hot. Pretty hard to beat.

  7. KC Says:

    Hello Paula,

    Thank you for the detailed response on ADX. A lot to read and grasp. Will save it for some downtime.

    Hope to hear if/when you get back into BCE.TO I see its finally breaking below on RSI.

    Thanks,
    KC

  8. KC Says:

    Hi Ron/BC,

    Any chance you could throw up your update to a 3YR chart on TECK/B please ? Seems erratic , but perhaps a bit tradeable ? I bet you’d rather advice – stay away. lol

    Your weather update was a bit humorous 🙂 I’m sorry I didn’t respond sooner, busy times at the office and a recent flood! 🙁

    From the better coast to your coast…… 😉

    Cheers,
    KC

  9. Ron/BC Says:

    KC
    Yes the weather has done it’s work once again even though we banned bad weather long ago. Mother nature just doesn’t listen it seems. Tons of snow and below 0, cancelled ferries and aircraft. I was driving out there yesterday and today and found my Michelin Defender tires didn’t perform well at all especially at the top of the hills at red lights. And a string of cars in front of me didn’t help either. But in a couple of days this should all be gone and it will be back to sun/cloud and rain again. That will cheer everyone up and stop them from complaining about the typical clouds and rain. It’s all relative……..

    Here is TECK/B.to. Price needs to clear AND HOLD above $31.50. See also the Commodity Index Tracking Fund ETF:DBC. Needs to clear $15.75 for a clearer breakout.

    https://stockcharts.com/h-sc/ui?s=TECK%2FB.TO&p=D&yr=1&mn=6&dy=0&id=p8088896981c&a=579408433

    https://stockcharts.com/h-sc/ui?s=DBC&p=D&yr=4&mn=0&dy=0&id=p9106751763c&a=579408643

  10. Bernie Says:

    Ron/BC,

    Re: #6
    Retired from investing? I doubt it. like me he’s likely just done with with the rat race of following the news and is now more into buy, hold and reap the accumulated dividend rewards. Just hope Mick is healthy and happy!

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