Tech Talk for Monday June 10th 2019

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Pre-opening Comments for Monday June 10th

U.S. equity index futures were higher this morning. S&P 500 futures were up 13 points in pre-opening trade. Index futures responded to news that the U.S. and Mexico have reached an agreement that will postpone tariffs on Mexican imports to the U.S.

The Canadian Dollar slipped 0.04 to U.S.75.32 cents following the Canadian May Housing Starts report released at 8:15 AM EDT. Consensus was 205,000 units versus 233,000 units in April. Actual was 202,300 units

Raytheon gained $18.09 to $204.00 after receiving an offer to merge with United Technologies. Each Raytheon share will receive 2.3348 shares in the new combined company.

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Tableau Software gained $42.79 to $168.00 after receiving a $15.7 billion takeover offer by Salesforce.com. Each Tableau share will be exchanged for 1.103 shares of Salesforce.com. Value of the offer is estimated at $177.88.

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Tilray added $6.55 to $45.35 after reaching an agreement with Privateer Holdings to extend its share lockup.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/06/07/stock-market-outlook-for-june-10-2019/

Note seasonality charts on Non-farm Payrolls and Canada Labour Force.

The Bottom Line

Most developed equity markets in the world reached an intermediate peak on or about May 1st. Exceptions were strength in equity markets outside of North America and Europe, notably in Emerging markets. Last week, most equity markets around the world recovered from short term oversold levels.

Observations

Technical action by individual S&P 500 stocks remained bearish last week. Number of stocks breaking intermediate resistance totaled 73 while number of stocks breaking support totaled 22. The Up/Down ratio advanced last week to (208/200=) 1.04 from 0.92.

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

Medium term technical indicators in Canada also moved higher last week. They remain intermediate neutral. 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) moved higher last week.

Short term technical indicators for Canadian markets and sectors also moved higher last week.

Short term political concerns in the U.S. remain elevated. Issues include tariff wars between the U.S., Mexico and China and anti-Trump hearings initiated by the Democrat controlled House of Representatives. Release of the Mueller report continues to elevate political rhetoric.

Frequency of S&P 500 and TSX Composite first quarter earnings reports continue to wind down. Only two S&P 500 companies are scheduled to report this week.

Forecasts for S&P 500 sales and earnings moved slightly lower again last week. Strength in the U.S. Dollar Index continues to take its toll. According to FactSet, second quarter earnings are expected to drop 2.1% on a year-over-year basis (versus 2.1% last week) and second quarter revenues are expected to increase 4.0% (versus 4.1% last week). Eighty six companies have issued negative second quarter guidance and 25 companies have issued positive guidance. Third quarter earnings are expected to increase 0.2% (versus 0.3% last week) and revenues are expected to increase 4.1% (versus 4.2% last week). Fourth quarter earnings are expected to increase 7.0% (versus 7.2% last week and fourth quarter revenues are expected to increase 4.5% (versus 4.6% last week. For all of 2019, earnings are expected to increase 3.1% (versus 3.2% last week and revenues are expected to increase 4.5% (versus 4.6% last week). First quarter 2020 earnings are expected to increase 10.5% and revenues are expected to increase 6.2%. Second quarter earnings are expected to increase 12.9% and revenue are expected to increase 6.8%.

 

Economic News This Week

Canadian May Housing Starts to be released at 8:15 AM EDT on Monday is expected to drop to 200,000 units from 235,500 units in April.

May Producer Price Index to be released at 8:30 AM EDT on Tuesday is expected to increase 0.1% versus a gain of 0.2% in April. Excluding food and energy, May Producer Price Index is expected to increase 0.2% versus a gain of 0.1% in April.

May Consumer Price Index to be released at 8:30 AM EDT on Wednesday is expected to increase 0.1% versus a gain of 0.3% in April. Excluding food and energy, May Consumer Price Index is expected to increase 0.2% versus a gain of 0.1% in April.

Weekly Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to slip to 217,000 from 218,000 last week

May Retail Sales to be released at 8:30 AM EDT on Friday are expected to increase 0.6% versus a decline of 0.2% in April. Excluding auto sales, May Retail Sales are expected to increase 0.4% versus a gain of 0.1% in April.

May Capacity Utilization to be released at 9:15 AM EDT on Friday is expected to increase to 78.0% from 77.9% in April. May Industrial Production is expected to increase 0.2 versus a decline of 0.5% in April.

April Business Inventories to be released at 10:00 AM EDT on Friday are expected to increase 0.5% versus no change in May.

June Michigan Consumer Sentiment Index to be released at 10:00 AM EDT on Friday is expected to dip to 98.0 from 100.00 in May.

 

Selected Earnings News This Week

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for June 7th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for June 7th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for June 7th 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

Technical action by S&P 500 stocks to 10:00: Bullish. Intermediate breakouts: $HAS $DFS $WLTW $PLD $BSX $ROP $AON $ADP $FISV $MSFT $VRSN $EXL $PG $EW $XRAY. No breakdowns.

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Procter & Gamble $PG, a Dow Jones Industrial stock moved above $108.68 to an all-time high extending an intermediate uptrend

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Consumer Staples SPDRs $XLP moved above $58.26 to an all-time high extending an intermediate uptrend.

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Canadian Pacific Railway $CP.CA, a TSX 60 stock moved above $309.50 to an all-time high extending an intermediate uptrend.

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Microsoft $MSFT, a Dow Jones Industrial stock moved above $130.89 to an all-time high extending an intermediate uptrend.

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Healthcare SPDRs $XLV moved above $90.85 setting an intermediate uptrend.

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Shaw Communications $SJR $SJR.B.CA, a TSX 60 stock moved above $20.92 U.S. extending an intermediate uptrend.

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U.S. Dollar Index ETN $UUP moved below intermediate support at $26.07. Major reason for strength in U.S. equity markets today.

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Non-farm #Payrolls actually higher by 0.5% (NSA), or 687,000, weaker than the average increase for May of 0.7%. $MACRO #Employment #NFP

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Keith Richard’s Blog

Keith says, “Enough to make your head spin”. Following is a link:

https://www.valuetrend.ca/enough-to-make-your-head-spin/

 

Hap Sneddon on BNNBloomberg’s Market Call Tonight

 

Links to Friday’s program:

 

Market Overview

https://www.bnnbloomberg.ca/video/hap-sneddon-s-market-outlook~1702779

 

Past Picks

https://www.bnnbloomberg.ca/video/hap-sneddon-s-past-picks~1702817

 

Top Picks

https://www.bnnbloomberg.ca/video/hap-sneddon-s-top-picks~1702837

 

Michael Campbell’s Special Report

Last week, Michael released a special free report entitled, “Investment Opportunities and Pitfall for the rest of 2019”. Don Vialoux was one of the participants in the report. The report has been well received. Following is a link to the report:

https://mikesmoneytalks.ca/services/moneytalks-free-service/

 

S&P 500 Momentum Barometers

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Percent of S&P 500 stocks trading above their 50 day moving average increased 4.41 to 54.71 on Friday. It remains intermediate neutral.

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Bullish Percent Index for S&P 500 stocks increased 2.40 to 57.20 on Friday. It remains intermediate neutral.

 

TSX Momentum Barometer

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Percent of TSX stocks trading above their 50 day moving average increased 0.84 to 48.74 on Friday. It remains intermediate neutral.

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Bullish Percent Index for TSX stocks were unchanged at 57.85 on Friday. It 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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11 Responses to “Tech Talk for Monday June 10th 2019”

  1. Ron/BC Says:

    The Canadian Dollar $CDW brokeout over its downtrendline Friday and has just bumped up against 1st price resistance at 75.50. Lots of work to do for $CDW to turn the tide but could be helped by a falling U.S.$ like other commodity based markets.

    https://stockcharts.com/h-sc/ui?s=%24CDW&p=D&yr=2&mn=3&dy=0&id=p03566818773&a=579408456

    https://stockcharts.com/h-sc/ui?s=%24USD&p=D&yr=3&mn=0&dy=0&id=p97281754010&a=579408533

  2. Ron/BC Says:

    The U.S.10 Year Yield chart is bouncing off of price support at the 2017 lows. Expect interest rates to bounce back again to at least its downtrendline which would trash Bonds and interest rate sensitive markets and wouldn’t be expected with all the hype of lower rates to come. (Recall Lucy and the football scene.)

    The Bond ETF:TLT is bumping up against major price resistance & double top and is overbought as well. Odds favour a pullback. Far too many happy Bond bulls out there.

    https://stockcharts.com/h-sc/ui?s=%24TNX&p=D&yr=3&mn=0&dy=0&id=p21445896626&a=579408365

    https://stockcharts.com/h-sc/ui?s=TLT&p=D&yr=8&mn=0&dy=0&id=p62283576185&a=579408375

  3. FishFat Says:

    Superior Plus (SPB.to) I mentioned the Flagpole formation back on May 24th. It broke out above the flag this morning on strong volume. It would be risky to enter at this point as the price is now too far above the moving average and testing overhead resistance, but I hope some were able to benefit.
    http://schrts.co/TrHHHvex

  4. Ron/BC Says:

    FishFat

    The good book says another Flag is likely. But that would be more likely ‘if’ that double top at $12.80 was cleared first.

  5. Paul Says:

    Hi Ron,
    KXS.to has been on a run. Where would you place resistance and a possible exit ?
    Thank you, Paul

  6. Larry/ON Says:

    Looks like a lot of profit taking went on today with the SP500 forming a gravestone doji today. I remain skeptical of this market.

  7. Ron/BC Says:

    Paul
    Re:KXS.to. All was well and in a nice uptrend until last October. Price sold off and broke its uptrendline and found support at the 2017 lows of $63. Price over the last few months is trapped between $70 support and $85 resistance which is a huge range. Price would need to clear $85 to suggest a run to the bottom of its broken uptrendline at $95. And there is little to no volume on the stock. Support is the uptrendline at $74 and then $70 and then a full retracment at $63. With the broken uptrendline and choppy price action with the strong rebound on the broad market I would not want to hold this stock personally.

    https://stockcharts.com/h-sc/ui?s=KXS.TO&p=D&yr=5&mn=0&dy=0&id=p85603973474&a=670115404

  8. Bobj Says:

    Fishfat
    main reason SPb.to moved today, they may sell there Chemical Business, then be a pure play in Propane Distribution. Major US expansion Plans.

  9. Paul Says:

    Ron, re KXS.to, thank you !

  10. FishFat Says:

    Ron/BC re:#4
    I am cautiously optimistic that the breakout of the flag pattern will be have enough momentum tof carry SPB past resistance of the double top, but sensible enough to know that is also iffy.

    Bobby re:#8
    Thanks for the back story on SPB. There is a lot to like about the stock besides the chart pattern breakout – like the decent yield and the focus on core business objectives.

  11. FishFat Says:

    Bobj re:#10 Sorry, my text program auto-corrected your name to Bobby and I failed to catch it. No disrespect intended.

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