Tech Talk for Thursday March 21st 2019

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Pre-opening Comments for Thursday March 21st 2019

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

Index futures were virtually unchanged following release of economic news at 8:30 AM EDT. Consensus for Weekly Initial Jobless Claims was 225,000, down from upwardly revised 230,000 last week. Actual was 221,000. Consensus for March Philly Fed Index was an increase to 5.0 versus a drop of 4.1 in February. Actual was an increase to 13.7.

Micron gained $1.38 to $41.51 after reporting higher than consensus fiscal second quarter earnings. The company also offered positive third quarter guidance.

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Apple added $1.18 to $189.35 after Needham upgraded the stock to Strong Buy from Buy. Target price was raised to $225 from $180.

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Biogen plunged $83.18 to $237.68 after the company discontinued its Alzheimer treatment trial.

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Darden Restaurants (DRI $108.65) is expected to open higher after reporting higher than consensus fiscal third quarter sales and earnings.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/03/20/stock-market-outlook-for-march-21-2019/

Note seasonality charts on KBW Bank Index, Crude Oil days of Supply and Gasoline days of Supply.

 

Observations

The U.S. Dollar Index and its related ETN dropped sharply following release of the Federal Reserve’s statement at 2:00 PM EDT. Good for commodities and commodity stocks, bad for bank stocks!

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StockTwits released yesterday @EquityClock

Technical action by S&P 500 stocks to 10:15: Quiet. No intermediate breakouts. Breakdown: $BXP

Editor’s Note: After 10:15 AM EDT (mainly after 2:00 PM EDT), short term breakdowns included a wide variety of bank stocks as well as BWA and DIS. Breakouts included NFLX, MDLZ, HES and OXY.

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Days of supply of oil showing signs of a much earlier than average peak, bullish for the seasonal trade in the energy sector. $XLE $XOP $OIH

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Fed statement prompted strength in commodity prices. $GSG

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Editor’s Note: Base metal prices and related ETN (Copper, zinc, aluminum) were notably stronger

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Energy stocks $XOP leading the commodity stock advance. Move above $31.29 completes a base building pattern

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Ditto for "gassy" stocks! $FCG completed a base building pattern on a move above $17.70.

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Emerging Markets iShares $EEM moved above $43.73 extending an intermediate uptrend. Responding to U.S. Dollar weakness

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Russia ETF $RSX moved above $21.40 extending an intermediate uptrend. Responding to U.S. Dollar weakness/crude oil price strength.

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Canadian energy stocks also strengthen. Cenovus $CVE.CA moved above $12.20 extending an intermediate uptrend.

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U.S. banks under pressure following Fed news and flattening of the yield curve. $KRE $KBE $XLF

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Editor’s Note: The drop in yield on long term Treasuries and higher commodity prices caused TIPs (inflation protected securities) to soar

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Trader’s Corner.

 

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for March 20th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for March 20th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for March 20th 2019

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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 dropped 7.15 to 77.20 yesterday. It remains intermediate overbought and trending down.

 

TSX Momentum Barometer

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The Barometer dropped 1.68 to 69.75 yesterday. It remains intermediate overbought and trending down.

 

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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13 Responses to “Tech Talk for Thursday March 21st 2019”

  1. Ron/BC Says:

    The 30 year U.S. Yield Index $TNX broke above its 31 year downtrendline channel and even cleared the 2014 high of 30.36 in 2018. A breaqkout over this long term downtrendline looked like a slam dunk to a return to higher interest rates. Even Federal Reserves around the world thought so and started jacking up other interest rates. BUTTTTTTTTTT the breakoout didn’t hold on the pullback and now even the 2017 high of 26.21 has not held as support and broken down. This monthly chart with the RSI 8 crossing above the 70 line and crossing back down again has pinpointed every top in long term rates for over 31 years. So much for breakouts that don’t hold. The pattern just keeps repeating. I have been advised that unless you are a subscriber to Stockcharts you will not see this Monthly chart. That is unfortunate and perhaps I shouldn’t bother posting charts that so many can’t see. Can’t post intraday charts either as they wont show up either.

    https://stockcharts.com/h-sc/ui?s=%24TNX&p=M&st=1986-10-01&id=p1816548354c&a=579408636

  2. Paula Says:

    Ron/BC,
    Of course it is up to you, but I for one really appreciate you posting these long term charts of the important indices. This one of the 30 year U.S. Yield is so significant b/c it is so long term. Just when we (everyone and his dog, as you like to say) thought that this was it – the end of the long bull market in bonds, rates have a false breakout and they are back on a down trend to continue the pattern. And so much for the projected fib levels that were talked about last year.
    I remember getting over 15% on a GIC in the early 80’s. If it wasn’t a historical fact, I bet there are lots of young people who would not believe that. Thanks for posting the chart.

  3. JP/BC Says:

    Re #1: Ron/BC the monthly chart shows up instead as a daily chart. There are no lines added. Too bad, I am very interested. I always appreciate your charts.

  4. KC Says:

    Hello Ron/BC,

    Not sure if you’ve written about Canadian banks in the past 2 weeks. would love to hear your TA on them, especially, TD BMO CWB and ZEB, now that they are rolling over.

    Thanks,
    KC

  5. Bobj Says:

    Ron/BC
    I fully agree with Paula. Also for some Time now I need to thank you for your great Charts.
    I’m here most Days and can see them as you post.
    Of interest Can. 10 Year Gov. Bond is now inverted at 1.67% !

  6. KC Says:

    Paula,

    It seems like we may have sold out of BCE.TO a bit too early , lol.

    Cheers,

  7. Paula Says:

    KC,
    Selling too early is the story of my life. Learning to stay with a trend has been a challenge for me, which I have written about before. One way that helps me to overcome my impulse to sell a winner too soon is to leg in and out. That is, have a pre-determined number of shares I am willing to buy/own and then gradually selling when they seem to be overbought, assuming they went up of course. LOL. This way you get to have your cake and eat it as well – take some profits and let the rest ride. I find this easier when there is a juicy dividend yield since I have a bit more patience while waiting for the x-dividend date. This may not help you this time around but remember, there is always next time and other opportunities.

  8. Harry Says:

    Ron/BC—-I’ve been reading your posts for some time. Before your banter with the Russian trader and discussions with Eve. I want to thank you for what you share and am trying not to hit too many potholes. I am a stock charts member but you still have to understand what you see. Thanks again.

  9. Larry/ON Says:

    Semis are just on a mind-blowing tear putting SOXX to an all-time high. Buyers must have huge conviction of a good trade deal with China. I’m a little concerned about financials and transports. QQQ just over 2% away from a new all-time high. Lots of room for stocks like GOOGL, AMZN and AAPL to move higher. Lots of stocks making new all-time highs including MSFT, V and MA. Oil and materials stocks breaking higher. Place your bets for the SP500. Market double top or a breakout to a new bull-market up-leg. Momentum is impressive and we will have a bullish 50/200 day cross-over on the SP500 in four or five trading days.

  10. Larry/ON Says:

    BofA Merrill Lynch Global Fund Manager’s Survey shows managers are still very defensive. Lot of people sitting on cash, REITS and utilities.

    https://www.cnbc.com/2019/03/19/merrills-survey-of-global-investors-is-useful-because-it-often-pays-to-do-the-opposite.html

  11. Ron/BC Says:

    Paula
    Well I was told decades ago the most important thing to understand was the direction of interest rates as that determines most everything. That used to be easy as the Fed always gave info on rate changes ahead of time as they didn’t want to upset the markets. And the last couple of years we’ve seen rates go up sharply in Canada and the U.S. with promises of much higher rates ahead in 2019 and 2012 and the effects of that on many markets. And then they had a complete reverse of that policy by Federal Reserves causing markets to react both ways. We all need to know at least the basic direction of rates to plan our futures and looking at the charts many look like a dog’s breakfast. Even the great Bond King Bill Gross that managed the largest Bond market in the world was wrong on his prediction of rates. So I wouldn’t bet on any market now with such chaos. When pushing the buy button on my trading platform I feel like I’m putting my finger in a light socket. So I don’t do it all that often anymore as I’m not a gambler and feel like the stock market is just a casino now. Here we are 10 years into a bull market and see interest rates still very low and Commodities still low and Copper still doing very little and Gold still going sideways on the long term charts. Doesn’t look like a bull market to me in most individual markets. And try to make sense out of the October through December markets plunge with a complete retracement back in the 3 months after that. Did that make any sense to anyone? So where are rates going now? If the Feds don’t know I don’t’ know who does.

  12. Ron/BC Says:

    Harry

    You do have a long memory,lol…The old saying is “Winners have long memories and losers have short memories.” Lots of water under the bridge since then…….some of it I miss and some of it I definitely don’t miss.

    BobJ
    Thanks for that info. That reminds me that the CD 10 year rate is much lower than the U.S. 10 year rate. And yes there are some time frames that show an inversion. Not a good sign and there will be repercussions due to that.

  13. Ron/BC Says:

    # 11 should read “higher rates in 2019 and 2020″……….

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