Tech Talk for Friday April 26th 2019

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Pre-opening Comments for Friday April 26th

U.S. equity index futures were mixed this morning. S&P 500 futures were down 1 point in pre-opening trade.

Amazon (AMZN $1902.25) is expected to open higher after reporting higher than consensus first quarter sales and earnings.

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Intel (INTC $57.61) is expected to open lower after reporting lower than consensus first quarter sales and earnings.

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Starbucks (SBUX $77.11) is expected to open higher after reporting higher than consensus first quarter sales and earnings.

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Ford (F $9.40) is expected to open higher after reporting higher than consensus first quarter sales and earnings.

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ExxonMobil (XOM $82.22) is expected to open lower after reporting lower than consensus first quarter earnings.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/04/25/stock-market-outlook-for-april-26-2019/

Note seasonality chart on Durable Goods Orders

Observation

Technicals on China deteriorated. Shanghai Composite broke below its 20 day moving average, short term momentum indicators turned lower and strength relative to the S&P 500 Index turned negative. Related North American equities (Materials, Energy, Industrials) responded by moving lower.

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StockTwits released yesterday @EquityClock

Technical action by S&P 500 stocks to 10:00: Quietly bearish. No intermediate breakouts. Breakdowns: $PSX $MMM $IRM

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Cameco $CCO.CA $CCJ, a TSX 60 stock moved below $15.10 Cdn and $11.29 U.S. setting an intermediate downtrend

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Bombardier $BBD.B.CA, a TSX 60 stock moved below $2.55 completing a double top pattern.

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SNC Lavalin $SNC.CA moved below $33.21 extending an intermediate downtrend

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Canfor $CFP.CA moved below $12.91 extending an intermediate downtrend.

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Celestica $CLS.CA moved below $11.09 and $9.86 on less than consensus results.

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Methanex $MX.CA moved below $73.88 setting an intermediate downtrend.

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Trader’s Corner

 

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for April 25th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for April 25th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for April 25th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

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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21 Responses to “Tech Talk for Friday April 26th 2019”

  1. Larry/ON Says:

    US Q1 GDP 3.2% vs est 2.5%. We need David Rosenberg to now tell us that a recession is inevitable in 2019 and the sky is falling.

  2. Larry/ON Says:

    US 3.2% Q1 GDP is even more remarkable because there was a 35 day government shutdown during that period. The bears will try to come up with all sorts of reasons like inventory builds to say the economy wasn’t that strong. March was the strongest month in Q1 and April is reported to be shaping up as a strong month so growth is not decelerating. Q2 will be a strong quarter which will confound the skeptics.

  3. James/Sudbury Says:

    Larry/ON re: #2. Post of the year! Don’t forget to add how Rosie loves to mention how he “Called” the housing crash of 2008 whilst he was at Merrill. I’m certain these stopped clocks will be right some day but think of the damage to customer portfolios that these uber bears have caused. Meredith Whitney, Eric Sprott, Nandu Narayanan all scared investors into cash and have cost them dearly. Where are they now? Thanks Larry/ON for the post and happy trading !

  4. bruce Says:

    larry
    Rosenberg made a speech in toronto last night……no change in his thinking…..what if he s right?..

  5. Larry/ON Says:

    Bruce – Eventually there will be a recession but not in the near future. Rosenberg is wrong and he has to push out his call for a recession further into the future. When a China trade deal happens that will enable a lot of companies to make longer term decisions about expansion and it will be positive for growth. There has been a foot on the brake on trade for some time and it will soon come off.

    Anybody remember hedge fund manager Kyle Bass and his End of The World prognostication a few years ago. Psychologically people are more willing to buy into pessimistic viewpoints as somehow they appear smarter than bullish ones. Short selling fund managers use this to their advantage when they target a company with apocalyptic projections. People have been burned on their investments in the past so that when positive things happen they tend not to believe it. They miss the boat and when they finally get in it is near the top. That said we can have a correction in this market at any time. Gotta know what you are going to do about it before it finally happens.

  6. KC Says:

    Hello Ron/BC,

    Have you ever looked at Harris Corp (HRS) ? What do you think about the chart ? Ready for a pull back ?

    Cheers,
    KC

  7. JP/BC Says:

    Martin Armstrong emailed this today

    Bank of Japan and the bond crisis

    Posted Apr 26, 2019 by Martin Armstrong

    BoJ Statement 4-24-2019

    The Great Financial Unknown is now upon us. After 10 years of Quantitative Easing, the European Central Bank (ECB) in Europe owns 40% of the national debts in the EU and it can neither sell them nor stop buying without creating a Panic in Interest Rates. Likewise, the Bank of Japan (BoJ) owns between 70% and 80% of the ETF bond market in Japan. The Bank of Japan confirmed it is ending free market determination of interest rates for the municipal level and that they “will not require any procedures such as auction as the method of determining lending conditions.” today it may introduce a lending facility for its exchange-traded fund buying program, which would allow it to temporarily lend ETFs to market participants.

    Introduction of Exchange-Traded Fund (ETF) Lending Facility:
    The Bank will consider the introduction of ETF Lending Facility, which will make it possible to temporarily lend ETFs that the Bank holds to market participants.

    The statement at the end of the announcement on the last page on its monetary policy has left traders in shock. This appears that the BoJ realizes that it now effectively has destroyed its bond market and realizes that there is not only the end of a free market, but there is a contagion of surrounding lack of liquidity.

    We have never before in the history of human society ever witnessed such a major financial crisis. The BoJ makes it clear it will continue its policy of Quantitative Easing. It stated plainly:

    The Bank will continue with “Quantitative and Qualitative Monetary Easing (QQE) with
    Yield Curve Control,” aiming to achieve the price stability target of 2 percent, as long as it is
    necessary for maintaining that target in a stable manner.

    Both the ECB and the BoJ are completely trapped. They have destroyed their respective bond markets meaning they can no longer even tolerate a free market with respect to interest rates. They cannot stop buying government debt for there is no bid at these rates. We are far beyond every economic theory ever contemplated. How we deal with this government-created financial crisis will be extremely interesting. This is were opinion will just not suffice. There is no reference in history to turn to. This is where Socrates can guide us through the absolute chaos that we face.

  8. Ron/BC Says:

    KC
    Not near a computer now.

  9. bruce Says:

    tnx JP………..interesting read……I wonder if that means Armstrong is expecting an avalanche of foreign funds into the u.s. and the u.s.$??….just a guess…..

  10. Ana Says:

    #2. Larry/ON
    #3. James/Sudburry
    #4. bruce

    Do you question the GDP with the tariffs and the shutdown? I have my doubts about this number.

    $VIX is not supporting a higher $SPX but could change. I am watching that closely.

  11. Ana Says:

    So here comes the rollout of what actually was manipulated for that glorious GDP number:

    “The federal deficit hit $234 billion in February, according to new data from the Treasury Department, an apparent record for a one-month time period.

    According to Bloomberg, the previous monthly record was set seven years ago, at $231.7 billion.
    Five months into the fiscal year, which began in October, the deficit has already surpassed a half-trillion dollars, reaching $544 billion.

    The record deficit comes as the government paid back more corporate taxes than it took in, losing $669 million. Overall, corporate taxes for the year were down $14.3 billion in comparison to the same period last year.

    The GOP tax law, which went into effect last January, has been projected to cost $1.9 trillion over a decade.

    Spending, in the meantime, was up by $145.6 billion in comparison to the same five-month period last year, following a bipartisan agreement to boost both defense and nondefense discretionary spending.

    The Congressional Budget Office has warned that rising deficits mean that the national debt is on track to hit 93 percent of GDP in a decade, the highest level since just after World War II.

    Last month, the debt surpassed $22 trillion for the first time in the nation’s history.”

    “So despite the upside surprise on gov. spending, final domestic demand (#GDP excluding trade and #inventories) grew just 1.5% annualized, the weakest since 2015.”

  12. Ron/BC Says:

    KC

    HRS is at a major top which is very difficult to clear unlike the average resistance levels. Notice the breakout last October and the pullback that didn’t hold and then plunged. Not unusual to see this. If I had a gun to my head I’d short it at the 168 area.

    https://stockcharts.com/h-sc/ui?s=HRS&p=D&yr=2&mn=0&dy=0&id=p50665705276&a=661548126

  13. Canuck2004 Says:

    Last week, TSX broke-out into blue sky territory, this week NASDAQ did the same, today S&P500 closed within an inch of breaking out….lol.

    Of course the aggressive FED rate hike reversal has everything to do with it…the market told them to STOP…and they listened for once…and as a rule, when the year starts off BULLISH, the year ends BULLISH.

    I suspect that the 5-6 years of ZERO interest rates and QE in US will act as a no-man’s land, a dead zone, to be ignored by the traditional market cycle….and this year is an economic soft patch on a much longer than usual secular Bull market….extra long bull. The yield curve inversion is beginning to look like a traditional mid-cycle event, I would bet…but who knows….all uncharted territory here with zero rates for several years and QE…never been done before in USA…the dominant world economy.

    Rates are unlikely to go much higher for years to come as per Gov. debt loads….so with muted rates, or even an odd rate cut…markets can only go higher.

    Anyway, makes no difference to me, I’m a yield investor, so as long as the cash flow remains intact, I don’t really care. Nice to see the accounts perk up though….lol.

  14. bruce Says:

    tnx Ana
    if rates ever rise the interest paid on the u.s. $ debt will be enormous……..i m not sure just how they can continue to finance $ trillion plus annual deficits without causing inflation….the buffoon boasts constantly about the strong economy but at the same time nags the Fed to cut rates…..even Kudlow and Steve Moore are asking for lower rates……this cant end well….

  15. Ron/BC Says:

    Bruce
    Re:#14
    Yes it makes you wonder. With the Fed’s debt loads etc I guess it’s time to keep an eye on $GOLD as it hasn’t done much since 2011. Price tends to have a summer low so it might be time to watch for a significant price low over the next few months. Could be a good trade ahead. It used to be a great trading vehicle most of the time along with the precious metal stocks.

    https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=2&mn=0&dy=0&id=p11716469630&a=629116291

    https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24USD&p=D&st=1975-09-03&id=p1983223322c&a=579408277

  16. Ron/BC Says:

    The $SPX is at a double top being 2940 and major price resistance. This is the line in the sand where short sellers and major buyers battle. Price needs to clear AND hold above 2940 to see the short sellers throw in the towel. Technically price needs to rally 3% above this level to get rid of these short sellers and confirm a valid breakout has occurred. (nose pokes don’t count). Then price needs to pullback to the breakout point AND hold above this level that needs to hold and serve as support. That is where conservative traders/investors buy with a new bottom in place to rally further from to new highs. Big test here to see who wins this battle of the big players as both have very deep pockets.

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

  17. bruce Says:

    ron
    next week we get the fed statement on wednesday and the employment numbers on friday…..that should help the s&p decide which way it wants to go…..

  18. Mary Says:

    I read….
    SPX to 3150
    NASDAQ 8300 – 8400
    Each politician only cares about their term(s) to look good in history. Let the other worry about the future until….

  19. Ron/BC Says:

    Bruce

    Here is the Fear & Greed Index again. Look at the first Indicator showing the number of PUT Options. It is at the lowest level in two years meaning most everyone is bullish ahead with very few wanting to short the market. And the $SPX is at the highest level above its 125 day average in two years. This of course doesn’t mean a certain selloff but is not a good sign if long. But again,the most important thing is for price to finally “clear and hold” above the double top and run up 3% and then pullback to or close to the breakout point for the next test of the breakout point that needs to hold as support. And then a rally to new highs to put all the battles behind it. The $SPX is what is watched world wide,not the Nasdaq which can soar or plunge at any time due to the nature of the Nasdaq’s volatile stocks. Recall the dot com period. So the big boys will be facing each other at this price point of the $SPX. Should be a noteworthy battle…

    https://money.cnn.com/data/fear-and-greed/

  20. bruce Says:

    ron
    the aaii sentiment survey for april 25th is 33.5% bullish 46.3% neutral and 20.2% bearish……..that s an unusually high neutral number…….fence sitters?..

  21. Ron/BC Says:

    Bruce
    Yes that is odd. These sentiment readings can be deciptive as you have to question who they are asking. The general public or fund managers or futures traders,etc.
    But the big boys know they both (breakout buyers & short sellers) have a battle on their hands. Doesn’t matter much what retail stock holders do but their irrational exuberance does warn of trouble at extremes being so many are emotional traders. The last thing you want to see if long stocks is average stock holders talking bullish and giddy about it. “IF” the buyers can blow through that old high “and keep it above”, those short sellers will have to cover which drives prices even higher. That is why the history books say you need a 3% breakout for valid breakout. Even with deep pockets the short sellers won’t hold their losing positions that far up. Then the big test of the breakout point down the road. No one is paying much attention to $GOLD so that might be the next one to run. Would be nice to see a major selloff with extreme bearish sentiment to get long with.

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