Tech Talk for Monday March 4th 2019

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Pre-opening Comments for Monday March 4th

U.S. equity index futures were higher this morning. S&P 500 futures were up 10 points in pre-opening trade. Index futures responded to an additional 1.12% increase in the Shanghai Composite Index in overnight trading on expectation of an imminent U.S./China trade deal.

Amazon added $16.27 to $1688.00 after Evercore raised its target price on the stock to $1965 from $1800.

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Bed Bath & Beyond (BBBY $16.69) is expected to open lower after Barclay’s downgraded the stock to Underweight from Equal Weight.

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Foot Locked gained $0.53 to $63.60 after Pivotal upgraded the stock to Buy from Hold. Target was raised to $73 from $64.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/03/01/stock-market-outlook-for-march-4-2019/

Note seasonality chart on Canadian GDP.

 

WALL STREET RAW RADIO

SATURDAY, MARCH 2, 2019 – WITH YOUR HOST, MARK LEIBOVIT

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

http://tinyurl.com/yy6nrolb

 

Excerpts from Don Vialoux’s comments on Wall Street Raw

The bear market rally in U.S. equity markets stalled last week. Major U.S. equity indices found resistance at levels set in early November. Short term momentum indicators including daily Stochastics, RSI and MACD turned down. Sectors showing the weakest momentum indicators were “risk on” sectors including Materials, Industrials, Financials and Consumer Discretionary.

Bright spot in equity markets last week was strength in Chinese stocks. The Shanghai Composite Index gained 7% in anticipation of a trade deal between China and the U.S.

Precious metal and precious metal equity prices started to show technical weakness last week. Gold equity ETFs dropped about 4%. The Gold ETN (GLD) moved below support at $123.19 and the Silver ETN (SLV) moved below support at $14.30 on Friday. The precious metals seasonal trade from early December to late February was nicely profitable this year. The Gold ETF (Symbol:GDX) gained 17% and the Junior Gold ETF (Symbol: GDXJ) advanced 21%. The period of seasonal strength normally ends next week. This year, the period of seasonal strength ended slightly earlier than usual.

Cannabis stocks regained upside momentum last week. The cannabis ETF in Canada (Symbol: HMMJ) gained almost 4%. Another well-known personality joined the “marketing parade” on cannabis last week. Martha Stewart agreed to become a consultant to Canopy Growth.

Brrrr, it’s colder than normal out there this year! More natural gas is needed in the northern half of the U.S. and all of Canada to keep us warm until spring. Last week, Natural gas inventories at this time of year in the lower 48 states reached their lowest level in five years. In the U.S., natural gas futures completed a short term double bottom pattern last week on a move above $2.74 per MBtu.  In Canada, the price of Alberta natural gas surged from $1.51 per MBtu in mid-January to $3.58 at the end of February Oil and gas producer stocks with a focus on natural gas production are acting well on the charts. Nice breakout by Encana (Symbol: ECA) on Thursday above a base building pattern! Seasonal influences for natural gas and “gassy” stocks are positive from mid-February to mid-June. Other ways for U.S. investors to play the seasonal trade include the natural gas ETN (Symbol: UNG) and the Natural Gas producer ETF (Symbol: FCG)

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The Bottom Line

The bear market rally in U.S. and Canadian equity markets showed technical signs of stalling last week. North American equity markets remain intermediate overbought and showed short term technical signs of weakness.

Observations

Technical action by individual S&P 500 stocks was bullish last week. Number of stocks breaking intermediate resistance totaled 50 while number of stocks breaking support totaled 11. The Up/Down ratio rose to (251/151=) 1.66 from 1.19.

Fourth quarter earnings reports by major U.S. companies are approaching the end.

96% of S&P 500 companies have reported to date. Earnings on a year-over-year basis increased 13.1% and revenues increased 5.8% (down from 6.6% last week). Another 10 S&P companies are scheduled to release results this week

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

Medium term technical indicators in Canada also began to roll over 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) remain overbought and turned lower last week.

Short term technical indicators for Canadian markets and sectors also remain overbought and turned lower last week.

Short term political concerns remain elevated. Issues include heightened tariff wars between the U.S. and China, anti-Trump hearings initiated by the Democrat controlled House of Representatives and expected release of the Mueller report.

Prospects for S&P 500 earnings were reduced once again last week. According to FactSet, first quarter earnings are expected to decline 3.2% (down from a decline of 2.7% last week) but revenues are expected to increase 5.2%. Second quarter earnings are expected to increase 0.3% (down from 0.7% last week) and second quarter revenues are expected to increase 4.8%. Third quarter earnings are expected to increase 1.9% (down from 2.2%) and revenues are expected to increase 4.6%. Fourth quarter earnings are expected to increase 8.8% (down from 8.5%) and fourth quarter revenues are expected to increase 6.2%. For all of 2019, earnings are expected to increase 4.1% (down from 4.5%) and revenues are expected to increase 5.1%.

The breakout by long term U.S. Treasury Yields (and associate breakdown by TLT) on Friday signaled a change in trend from down to up implying a tighter monetary policy.

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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

December Construction Spending to be released at 10:00 AM EST on Monday is expected to increase 0.2% versus a gain of 0.8% in November.

February Non-manufacturing ISM to be released at 10:00 AM EST on Tuesday is expected to increase to 57.2 from 56.2 in January.

December New Home Sales to be released at 10:00 AM EST on Tuesday is expected to drop to 590,000 from 657,000 in November.

February Non-manufacturing ISM to be released at 10:00 AM EST on Tuesday is expected to increase to 57.2 from 56.2 in January.

February ADP Private Employment to be released at 8:15 AM EST on Wednesday is expected to drop to 190,000 from 213,000 in January.

December U.S. Trade Deficit to be released at 8:30 AM EST on Wednesday is expected to increase to $57.30 billion from $49.30 billion in November.

December Canadian Trade Deficit to be released at 8:30 AM EST on Wednesday is expected to increase to $2.39 billion from $2.06 billion in November.

Bank of Canada Statement is released at 10:00 AM EST on Wednesday. Overnight lending rate to major banks is expected to remain unchanged at 1.75%.

Beige Book is released at 2:00 PM EST

Initial Jobless Claims to be released at 8:30 AM EST on Thursday are expected to remain unchanged from last week at 225,000.

Fourth quarter Non-farm Productivity to be released at 8:30 AM EST is expected to grow at a 1.7% rate versus a 2.2% rate in the third quarter.

February Canadian Housing Starts to be released at 8:30 AM EST on Friday are expected to drop to 200,000 units from 208,000 in January.

February Non-farm Payrolls to be released at 8:30 AM EST on Friday are expected to drop to 180,000 from 304,000 in January. February Unemployment Rate is expected to drop to 3.9% from 4.0% in January. February Hourly Earnings are expected to increase 0.3% versus a gain of 0.1% in January.

January U.S. Housing Starts to be released at 8:30 AM EST on Friday are expected to increase to 1.190 million units from 1.078 million units in December

February Canadian Employment to be released at 8:30 AM EST on Friday is expected to drop 5,000 versus 66,800 in January. February Unemployment Rate is expected to slip to 5.7% from 5.8% in January.

January Wholesale Inventories are expected to be released at 10:00 AM EST on Friday.

 

Selected Earning Reports This Week

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Trader’s Corner.

Equity Indices and related ETFs

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Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for March 1st 2019

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Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for March 1st 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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StockTwits Released on Friday @EquityClock

Canada’s #GDP shows a gain of 1.4% (NSA) in 2018, a full percentage point below the 20-year average increase. $MACRO #CDNecon #CAD

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Technical action by S&P 500 stocks to 10:00: MIxed. Intermediate breakouts: $GPS $DFS $ILMN. Breakdowns: $WBA $AIV

Editor’s Note: After 10:00 AM EST, breakouts included NLSN, IDXX, AIZ, BDX and FISV. No breakdowns.

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Medical Devices iShares $IHI moved above $238.57 to an all-time high extending an intermediate uptrend.

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Another Cdn. oil services stock breakout! Ensign Energy Services $ESI.CA moved above $5.49 setting an intermediate uptrend.

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Martinrea $MRE.CA moved above $12.87 extending an intermediate uptrend.

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Recipe International $RECP.CA moved above $28.50 extending an intermediate uptrend.

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Long term Treasury iShares $TLT moved below $119.12 completing a double bottom pattern.

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Gold ETN $GLD moved below $123.19 setting an intermediate downtrend

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Silver ETN $SLV moved below $14.55 and $14.30 setting an intermediate downtrend.

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Silver equity ETF $SIL responding to lower silver prices moving below support at$26.09

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Inter Pipelines $IPL.CA, a TSX 60 stock moved above $21.64 setting an intermediate uptrend.

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Rogers Communications $RCI.B.CA $RCI moved below $69.37 Cdn. completing a double top pattern

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CGI Group $GIB.A.CA $GIB, a TSX 60 stock moved above $89.50 to an all-time high extending an intermediate uptrend.

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Canadian Dollar dropped 0.97 cents U.S. in response to a weaker than anticipated fourth quarter GDP report. $CDW.CA

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

 

S&P 500 Momentum Barometers

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Percent of S&P 500 stocks trading above their 50 day moving average slipped last week to 91.00 from 92.00. Percent remains extremely intermediate over bought and showing early signs of rolling over.

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Bullish Percent Index for S&P 500 stocks increased last week to 73.60 from 72.20. The Index remains intermediate overbought.

 

TSX Momentum Barometers

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Percent of TSX stocks trading above their 50 day moving average dropped last week to 81.6 from 87.76. Percent remains intermediate overbought and has rolled over.

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Bullish Percent Index for TSX stocks increase last week to 56.30 from 54.39. The Index remains intermediate neutral.

 

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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15 Responses to “Tech Talk for Monday March 4th 2019”

  1. Ron/BC Says:

    Here is a chart of the Short $SPX ETF:SH. Price is testing the October,November,December and February low of 2811. Not surprising that there is very heavy short selling at this level in the $SPX futures. Looks like a good bet technically. BUTTTTTTTTTTTTTT not with everyone and his dog all on one side of the market.

    https://stockcharts.com/h-sc/ui?s=SH&p=D&yr=2&mn=0&dy=0&id=p0305210373c&a=649895636

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=1&mn=0&dy=0&id=p9412314680c&a=582707024

  2. Ron/BC Says:

    Big test here at 75 for the $CDW. Price has been in a downtrend for a longtime with lower highs and lower lows. Price bounce back up to its downtrendline in early 2019 and formed an H&S pattern. A break below 75 would suggest a selloff to 73. Meanwhile support is support and a bearish chart pattern that fails to breakdown below support can be very bullish and April tends to be a strong month for the CD$. Bottom line watch for 75 to breakdown or hold as support.

    https://stockcharts.com/h-sc/ui?s=%24CDW&p=D&yr=2&mn=0&dy=0&id=p3574391319c&a=579408456

  3. kam Says:

    Ron/BC,

    Thanks for SPX chart. Look like market was waiting for me to close SPY short before it start dropping,lol.

    I closed other stocks in morning except tsla which is in red but a small position. Until 2750-60 gave way there is still a higher target so being nimble is the way to go.

  4. FishFat Says:

    TechTalk mentioned US Natural Gas tdoay. The $NATGAS chart is bullish.
    The downtrend has been penetrated. There is positive divergence of the MACD. And OBV and Accum/Dist are moving up in concert. All bullish signs.
    https://stockcharts.com/h-sc/ui?s=%24NATGAS&p=D&st=2017-12-04&id=p0078982446c&listNum=85&a=418557251

  5. Ana Says:

    kam,

    Since the MACD has crossed to the downside on the daily, it has not crossed back upside on the daily.

    “Ana Says:
    February 27th, 2019 at 2:48 pm
    Macd still remains crossed on the daily to the downside. Still, no great movement to the downside so will follow this closely.

    https://invst.ly/a5fdq

  6. Ana Says:

    Here is the MACD on the Futures on today’s close:

    https://invst.ly/a6xrs

  7. Ron/BC Says:

    Kam
    Note the long tail on the $SPX on post#1. Also note,the 50ema about to cross the 200ema. Something big is going to happen at this point. On Option Strangle might be best.

  8. Ana Says:

    #4. FishFat

    Thank you for the chart for $NATGAS. I have been trading this but cashed out of my long position because it looks like it is ready from a pull back on my short term day trading charts.

    Your charts, as well, indicate an overbought situation, at least for short term traders.

  9. Roy Says:

    Anyone here know the cheapest places to buy gold (not the stocks of gold companies)?

  10. rick Says:

    Ron/BC

    50EMA crossing up 200EMA = Bullish market = buying dips ,not selling tops = shorting will be dangerous

  11. Ron/BC Says:

    Rick

    Buy the dips? Haven’t seen any for some time. I can see why everyone and his dog is short looking at the charts though. But I also recall a wise old trader that had a saying, “If it’s obvious,it’s obviously wrong.” I try to keep that in mind for my own financial health.

  12. Bobj Says:

    Roy # 9
    You can buy Gold and Silver Bullion direct from the Canadian Mint.
    The 2 ETF’s are, MNT and MNS. No MER, they track the Metals, low trading Volumes.

  13. kam Says:

    Ana,

    I see the negative MACD but it can still do the final ‘5th’of (c) of b with a negative divergence on Macd before floor cave in. Regardless I am wrapping up most stocks for now. Hard for me to short so might sit on sidelines or might short SPY around 287 if we get there.

  14. rocketdave Says:

    Roy

    #9

    https://silvergoldbull.com

  15. Ron/BC Says:

    Roy

    There is also the ETF:CEF on the NYSE or CEF.to on the $TSX. They hold $GOLD and Silver in a Canadian bank.

    https://stockcharts.com/h-sc/ui?s=CEF&p=D&yr=9&mn=0&dy=0&id=p9745290377c&a=579408552

    https://stockcharts.com/h-sc/ui?s=CEF.TO&p=D&yr=9&mn=0&dy=0&id=p4890786940c&a=650041787

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