Tech Talk for Friday July 12th 2019

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Pre-opening Comments for Friday July 12th

U.S. equity index futures were higher this morning. S&P 500 futures were up 7 points in pre-opening trade.

Index futures were virtually unchanged after the June Producer Price Index was released at 8:30 AM EDT. Consensus was an increase of 0.1% versus a gain of 0.1% in May. Actual was an increase of 0.1%. Excluding food and energy, consensus for the June Producer Price Index was an increase of 0.2% versus a gain of 0.2% in May. Actual was an increase of 0.3%

Morgan Stanley (MS $44.18) is expected to open higher after Citigroup upgraded the stock to Buy. Target was raised to $52 from $48.

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Bed Bath & Beyond (BBBY $11.17) is expected to open lower after Raymond James lowered its target price to $17 from $20.

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Altria added $0.74 to $50.00 after Goldman Sachs upgraded the stock to Buy from Neutral.

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Wells Fargo (WFC $47.24) is expected to open lower after Citigroup downgraded the stock to Neutral from Buy.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/07/11/stock-market-outlook-for-july-12-2019/

Note seasonality charts on 10 Year U.S. Treasury Bond Price and U.S. Consumer Price Index.

 

Observation

The Cannabis ETF moved below $17.69 extending an intermediate downtrend.

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StockTwits released yesterday @EquityClock

Methanex $MX.CA $MEOH moved below $55.71 Cdn. extending an intermediate downtrend.

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Technical action by S&P 500 stocks to 10:00: Mixed. Intermediate breakouts: $TJX $CVS $HUM $UNH $ANTM. Breakdowns: $IVZ $FAST $IRM

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Editor’s Note: After 10:00 AM EDT, intermediate breakouts included PYPL CBS, CME, CBOE, BAX and PSX. No breakdowns.

Health related equities were prominently listed on breakout stocks this morning including $CVS $HUM $UNH $ANTM

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Restaurant Brands International $QSR.CA, a TSX 60 stock moved above $93.28 Cdn. to an all-time high extending an intermediate uptrend.

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PayPal $PYPL, a NASDAQ 100 stock moved above $119.95 to an all-time high extending an intermediate uptrend.

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Gold equity breakouts this morning: $ABX.CA $BTO.CA $GDX $GDXJ

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Two different views of inflation: Aggregate inflation (all items) showed a below average increase through the first half of the year, while core inflation (ex food and energy) showed an above average increase. $MACRO #Economy #CPI

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Long term Treasury iShares $TLT moved below their 20 day moving average and support at $129.87.

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Trader’s Corner

 

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for July 11th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for July 11th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for July 11th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

S&P 500 Momentum Barometer

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The Barometer added 2.40 to 80.60 yesterday. It remains intermediate overbought.

 

TSX Momentum Barometer

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The Barometer slipped 1.71 to 62.39 yesterday. It remains intermediate overbought.

 

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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27 Responses to “Tech Talk for Friday July 12th 2019”

  1. rick Says:

    Kam ,

    You are a trader , I am a long term investor ( 95 % of capital in a stock index ).
    Please explain why is better to be a trader and not a long term investor in a stock index.
    A trader has to be right twice .
    When he is buying AND when he is selling .( whatever he is buying or selling )
    A long term investor has to be right only once , when he is buying .
    Taking in consideration that US stock indexes are going up over time , is easier just to buy an index and hold it for long term .

  2. rick Says:

    I did not own Nortel or BB.to .
    Inside any index , I am sure that 20 % of the stocks are not good investments .
    Still , the index is going up because the other 80 % , the good stocks .
    In time , the bad stocks are going smaller and smaller and influence less and less the index = the result = the index will outperform the bad stocks .
    We have to make a difference between the forest and the bad trees inside the forest .
    There is no forest without bad trees .
    But we don’t have to cut all the forest just because there are some bad trees inside the forest .

    We have to look to the big picture .
    The stock market is going up long term .
    And I know a lot of people that are staying in cash in the last 10 years .
    And they are waiting and hoping for a big correction .
    A correction that I am sure that it will come but we do not know when and at what level .3000 or 4000 ? nobody knows.

  3. rick Says:

    In end of April I was asked about going long SPX .
    I mentioned that SPX can go up or have a correction .
    Usually if an investor will buy ,the correction will start next day .
    And if the investor will wait for a correction , that correction will come at a higher price some time later .
    I mentioned the possibility to buy 20 % in that moment , 20 % at EMA 10 , 20 % at EMA 20 , 20 % at EMA 50 AND 20 % at EMA 200 .
    In that moment SPX was 2950 , EMA 10 was 2925, EMA 20 was 2900 , EMA 50 was 2850 and EMA 200 was 2775 .
    Now SPX is 3000 .
    It was a good trade for a trader .
    For a long term investor , I am sure that SPX will be higher in April 2039 .
    My last investment in June was HXQ.to at 53 ( 12.000 $ for 2 TFSA accounts) and I will hold for at least 10 years .
    Is cash a good position in long term ?
    In short term yes but long term ….

  4. Larry/ON Says:

    $DJTTR – Huge upside move this morning. FDX up just shy of 3%. Not the sign of a collapsing market.

  5. Larry/ON Says:

    Canopy Growth just getting killed.

  6. Ron/BC Says:

    Rick

    I agree buying an index fund is the answer as we all know by now that any individual stock regardless of its status is subject to crash and burn. The best of them have seen this over the years. So an index ETF simply removes the bad stock and replaces it with a good stock without the owner of the index ETF having to be harmed badly financially. Jeez, can’t ask for much more of a safety than that. Plus you have a nice mix of investments with an index ETF. Here is a multi decade Weekly chart of the $SPX and simply using the well used 50ema and 200ema but charted as an MACD. Using a 20ema of this line (orange line) for buy and sell signals even for ‘traders’ such as myself should be all one needs to do ok. Or just throw it in a drawer and let the market go wherever. I wouldn’t just buy and hold forever as you wouldn’t know when you want ‘or need’ to exit down the road. Also one can buy other sector ETFs that track the $SPX chart if they want for more excitement. This Weekly chart hasn’t convincingly signaled a buy signal yet. No hurry as this is a ‘trend’ indicator and not a short term momentum indicator.

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=W&st=1994-03-10&id=p89761516087&a=673066405

  7. rocketdave Says:

    Well the $SPX broke through 3000, but there was no volume behind it?? Ahh the doldrums days of summer…

  8. Ron/BC Says:

    RocketDave

    Nose pokes dont mean much. Need to see some volume and a rally now. And of course the big test to see if 3000 will then serve as support on the pullback.

  9. Greg Says:

    I know several of you on this Blog have great respect for Mawer funds.
    I started investing with them 2 Years back and have been very happy with their funds, Performance and the People at Mawer.
    Received an E Mail Yday that they were winding down their Direct Investing Biz and Investors needed to switch to their discretionary investing Platform or Take their money elsewhere whether it be in the form of their funds being transferred to an outside institution or convert to Cash and leave.
    Mawer previously was looking at an outright Sale of their Biz and the timing of this suggests to me they are struggling for a viable direction to move forward as a medium sized fund caught amongst a sea of Sharks who have gobbled up the small boutique Brokerages.
    I am inclined to Leave my funds with them on a discretionary basis but frankly these continuing questions lead me to wonder if there is just not even more changes coming to a fund family that had such an illustrious past.
    Also another concern is with all these rules and Regulations is whether I may face conflict on the level of risk they may say I must accept because of my age (60s although I look like my 20s Lol!).
    I’d like to ask the view of the Mawer believers on this Blog ….. if I’m reading too much into it or my views are legitimate? Thx

  10. Mary Says:

    RE: #9

    Bernie is familiar with the Mawer fund I think. He left sometime ago for Alberta and haven’t seen him on the board since. Hope all is well with him and family.

  11. Paula Says:

    Ron/BC and Rick,
    I really enjoyed reading your posts here along with Ron/BC’s chart. They highlight the different perspectives at the perhaps not quite extreme ends of the spectrum between trader and investor. You are both correct in your views and what is right for each of you. It is up to each of us to figure out where to exist along that spectrum. I have tried to compromise by having different “baskets” with different objectives: 1. Long term dividend/income producing investments 2. Medium term swing trading to build capital 3. Cash/short term money – available for short term trading opportunities. Thanks for continuing to post.

  12. Ron/BC Says:

    Paula

    I was thinking about you recently and wondering if you still had XLK at $71. That would have been a real winner for sure. Note how it broke support ‘briefly’ and dropped below the 200ema also briefly with a fake breakdown. Markets love to do this nose poke breakdown or nose poke breakout. Very astute of you to recognize that and jump on it. It also follows the $SPX arrows well and outperforms the $SPX on rallies too but it cuts both ways as it under performs the $SPX on selloffs. Higher beta in other words. Very nice trade. I’ve been busy looking at condos to buy. Tough to get a great deal now even with all the multi government level restrictions. Houses in Victoria have dropped in price and sales but condos are still strong in both. Not a lot of bargains.

  13. Ron/BC Says:

    Paula
    RE:#12
    Here is the XLK chart.

    https://stockcharts.com/h-sc/ui?s=XLK&p=D&yr=1&mn=0&dy=0&id=p88818541565&a=673066156

  14. Paula Says:

    Ron/BC
    Thanks for your comments. Yes I currently have XLK…BUT I sold and bought it back since I posted the purchase on June 4th ~ 71. It shot up so quickly, I was too eager to book a profit. I saw resistance at the then descending 50 EMA on the daily as well as at the then descending 200 EMA on an hourly chart ~ 74, as well as overbought. I bought it back higher (~76) than what I sold it for which I find hard to do but at least it still continued up. LOL. My usual issues: 1. Finding it hard to hold on to a winner. 2. Watching the screen too closely when in a position. I did consider this a “trade” and not an “investment” at the time, unlike Rick who posted his purchase of HXQ as an investment. Yes the beta is higher than SPY but not as high as some individual stocks which as you recently posted can take you on quite a ride. LOL.

    At the time I was conscious posting that trade was almost like a challenge – tempting the market to prove me wrong. I believe it is some kind of rule not to talk about a trade when in it. Of course, I am very tempted to sell it again and see all kinds of divergences, over-bought conditions… BUT it is still in a strong uptrend and outperforming SPY and QQQ, so will try to hang on for now. I notice that Joanne Klein of Above the Green Line has drawn ascending wedges on XLK and SPY. Also, on her SPY chart there is a new rule re SCTR Rank: “Relative Strength of 80 is required for the major indices”. The rule for stocks is “90”.

    https://stockcharts.com/public/1107832?vote=success

    I am surprised to hear that you are busy looking to buy another condo. I guess you have been so successful, that you would like to repeat the experience. BUT, what a lot of effort compared to trading! I imagine that your patience will pay off one of these days and you will find yourself cleaning, moving and renovating again. LOL.

  15. Ana Says:

    Bernie, how are you?

  16. Ron/BC Says:

    Paula

    Well as long as you are making money you can’t complain. And as far as holding stocks forever I always recall a rule I was taught long ago that stated: “Bulls make money,Bears make money,but Pigs get slaughtered.” I’ve known a lot of people that seemed to have bragging rights to some great trades but held on to them too long as they enjoyed the fan fare and bragging rights too much and were blinded by that. If you look at a long term chart of most anything you can see you can get into them at any point along the way. One can look back at the charts and complain that they didn’t buy at the last major low in the market and now are paying more for the stock than they would have ever imagined some time ago. So from that point on simply buying support and selling resistance or for longer term trades holding a position until something trend following has suddenly broken its longer term pattern works well without a lot of work. Trying to catch exact tops and bottoms will frustrate most everyone so isn’t worth the trouble as you’ll always be early both ways. It is tempting to try especially selling on big spikes but most of the time it’s not a good strategy. I still don’t see why the Greenline lady uses Stochastics 5,1,1 as it would be more suited to day trading with intraday charts. There must be a lot of false erratic signals in and out of that green buy area used. And why the 250ema rather than what is closely followed and responded to being the 200ema and 50ema and 20ema. I guess using the 250ema would give more leeway to false breakdowns below the 200ema and still be in the acceptable range all the way to 250. Much like your XLK did when breaking down below the 200ema on high volume only to rebound back the next day.
    As far as buying another condo and selling the one I’m in that I’ve renovated, I watch the MLS listings that get emailed to me as instantly as they are listed. I enjoy the search and especially getting a great deal on one and renovating it within a reasonable and practical budget. It’s fun and challenging and very profitable as long as you do your homework. And it costs nothing to print off the info on a new interesting listing and drive by it to see the outside appeal and street & area etc. Then if it looks good call your realtor and make an appointment asap. And if it has potential and has a good Depreciation Report make an offer that makes financial sense to buy and renovate and resell. Not rocket science and is easier than trying to make a buck on stocks. The pay off is substantial. Plus the profit is tax free if you live there for awhile. So you end up with free rent so to speak and get paid very well for your trouble. I can’t find anything better than that,but it does take time and patience,but very little cost involved searching and is a fun hobby looking. Less stressful than golfing as well. And waaaaaaaaaaaaaaay less stressful than buying and selling stocks.

  17. Bernie Says:

    Greg

    Re: #10 It is truly sad to hear of Mawer’s exit from direct investing. I didn’t receive the email you did because I’ve only invested in them via my discount broker. I can’t see this move affecting their outstanding fund performances unless they begin to lose fund managers due to cutbacks. Even then Mawer has hardly skipped a beat in the past when managers have retired or moved on. Bottom-line, I don’t plan to exit my Mawer holdings anytime soon unless the “shake-ups” start to affect performance.

  18. Bernie Says:

    Mary,

    Re: # 10 (Greg’s shoulda been #9)
    Thanks for your kind thoughts. I spent quite a bit of time in AB between Apr-Jun dealing with my Dad’s hospital time, death and helping out my Mom but I’ve been back in Nelson for over a month now. I haven’t posted on here for various reasons, mainly because the topic is usually about market timing and I’m predominantly a buy and hold guy. That said, I am holding about 5% in high yield cash waiting for better entry levels in SPLV and RXD.TO for my RRIF. Standing pat on my other diverse 31 holdings (RRIF).

  19. Bernie Says:

    Ana,

    Re: #15
    I’m ok all considering, life goes on until it doesn’t. Nothing for me to post on here of late. I’ve been busier on the Canadian Dividend Group in Facebook.

  20. Ron/BC Says:

    Bernie

    Glad to hear you are doing ok and are well. Sorry to hear about your family problems. I went through all that and should be finished with the chaos now as most are gone. If you have any helpful ideas be sure to post here. That includes golf tips too,lol. I need all the help I can get in both categories.

  21. Paula Says:

    Bernie and others who are going through end of life issues. I found this book to be very useful: Being Mortal by Atul Gawande”:

    http://atulgawande.com/book/being-mortal/

  22. Paula Says:

    Ron/BC and anyone else who has a subscription to Stockcharts.com:

    John Murphy’s recent article on gold as the world’s strongest currency is very interesting. I haven’t looked at gold from that point of view at least not in a very long time. What I also had not realized is that the Canadian dollar is this year’s strongest currency relative to the Japanese yen, U.S. dollar, Swiss franc, Aussie dollar, British pound and the Euro.

    There is also the perspective of gold relative to other commodities:

    http://schrts.co/srGuYDtG

    Ron/BC, I saved this chart of yours on $HIU:GLD. Would you view the breakout as legitimate and consider updating your comments?

    http://schrts.co/SGHvsfxX

  23. Ron/BC Says:

    Paula
    That $HUI:GLD chart breakout is valid as it is a breakout over a better than 10 year downtrendline. Not surprising really with the world slowing down along with interest rates falling etc. Also I posted this chart of $CDW when it broke out above its downtrendline channel. It was a classic breakout with a short rally and pullback to the breakout point and then a rally that cleared first resistance. Now it is trying to clear 76.52 resistance. Most other countries are up the creek without a paddle. And the best way to compete with exporting is to trash your currency. The old saying “Its a race to the bottom” is true. I wouldn’t bet against the CD$ as much as I’ve never been a fan. And with the U.S.$ Trump wants a low dollar to export and bring back more manufacturing. I wouldn’t bet against his influence either. Just look at the interest rate reversal since last October. As for precious metal trades GDX and XGD.to or for a pure play GLD or even CEF or CEF.to is where I’ll get long soon enough. July/August tends to see another selloff so I’ll wait. Don’t mind if I’m late getting in.

    https://stockcharts.com/h-sc/ui?s=%24CDW&p=D&yr=2&mn=3&dy=0&id=p88070971108&a=673066412

    https://stockcharts.com/h-sc/ui?s=%24HUI%3AGLD&p=D&yr=14&mn=0&dy=0&id=p4563590608c&a=673066347

    If you really want to blow your mind with possibilities look at JNUG. Can you imagine how you’d do if you caught this one right,lol?

    https://stockcharts.com/h-sc/ui?s=JNUG&p=D&yr=1&mn=6&dy=0&id=p96653484083&a=673275761

  24. rocketdave Says:

    Anyone here ever subscribe to the “Motley Fool”
    If so, what did you think of it?

  25. DM/ON Says:

    Ron/BC
    Regarding $CDW I’m also observing FXC since it is trading at about 1 penny discount, and I’m wondering if reduction of that discount may happen and indicate increased popularity of CAD (on top of technical indications). In that case I’d consider CGL.to which is hedged version of bullion. Recently I sold CGL.C.to non-hedged version of bullion (and MNT for similar reason). Otherwise I’ve been long gold/silver since 2014 and maintain about 5% (with ups’n downs since 2014) in this “crazy world” and from Canadian portfolio perspective gold securities did act as a currency. Observing the mix of CAD cash equivalents, DLR.to and gold mix helped to maintain “reasonably” consistent portfolio value (very important to me)when equity part of portfolio was down, without much trading.

  26. Ron/BC Says:

    DM/ON

    Here is a chart of CGL.to. Presently at a double top. Not a lot of volume on this ETF but I guess enough to enter and exit. Big test now at $12.10.

    https://stockcharts.com/h-sc/ui?s=CGL.TO&p=D&yr=9&mn=0&dy=0&id=p58506073984&a=673066419

  27. Kam Says:

    Rick,

    Nothing to explain here.My post had nothing to do with investor or trader.
    SPX have gone up maybe 4-5% in last year and a half if someone have bought it at the TOP and never panic sold it( I doubt) considering it hit 2350 Xmas time.
    My post was to aware people that this might be wrong time to go all in at the moment as they might be in house of pain for long if market tanks.If you read comments on last few days, FOMO is setting in posters here regardless of if they are investors/traders.

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