Tech Talk for Monday August 26th 2019

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Pre-opening Comments for Monday August 26th

U.S. equity index futures were higher this morning. S&P 500 futures were up 14 points in pre-opening trade. Index futures recovered from overnight losses after the U.S. and China agreed to lower their rhetoric on trade negotiations.

Index futures were virtually unchanged following release of the July Durable Goods Orders report at 8:30 AM EDT. Consensus was an increase of 1.1% versus a revised gain of 1.8% in June. Actual was an increase of 2.1%. Excluding transportation orders, consensus for July Durable Goods Orders was an increase of 0.1% versus a revised gain of 0.8% in June. Actual was a drop of 0.4%.

Pitney Bowes gained $0.40 to $4.01 after the company sold its Software Solutions business for $700 million cash. Funds are to be used to lower debt.

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Amgen dropped $3.58 to $195.50 and Celgene gained $3.21 to $97.20 on news that Amgen will purchase Celgene’s Otzela treatment for $13.4 billion cash.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/08/23/stock-market-outlook-for-august-26-2019/

Note seasonality charts on the U.S. Dollar Index, Canadian Retail Trade and U.S. New Home Sales.

 

The Bottom Line

The traditional period of summer weakness in world equity markets continued last week with all of the weakness occurring on Friday on growing trade war concerns. Equity markets have a history of entering into a period of increased volatility at this time of year with a downward bias from mid-July to mid-October (plus or minus a week). Supplemental concerns this year include an earnings recession by major U.S. companies until the fourth quarter this year (particularly companies with extensive international operations), growing efforts by the Democrats to impeach Donald Trump, growing Middle East tensions and unsettled trade negotiations between the U.S. and China.

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Observations

The VIX Index remained at elevated levels again last week, in line with its historical trend between mid-July and mid-October. It spiked higher on Friday.

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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 flat/lower again last week and are trending down See charts near the end of this report

Medium term technical indicators in Canada also moved flat/lower again last week. See charts near the end of this report.

Most short term technical indicators for U.S. markets and sectors (20 day moving averages, short term momentum indicators) moved lower on Friday.

Short term technical indicators for Canadian markets and sectors also moved lower on Friday.

A new forecast by FactSet for quarterly S&P 500 earnings and revenues was unavailable again this week. Service resumes next week. According to FactSet, second quarter earnings are projected to drop 0.7% on a year-over-year basis and second quarter revenues are expected to increase 4.1%. Third quarter earnings are expected to drop 3.1% and revenues are expected to increase 3.1%. Fourth quarter earnings are expected to increase 3.9% and fourth quarter revenues are expected to increase 4.0%. For all of 2019, earnings are expected to increase 1.5% and revenues are expected to increase 4.3%. First quarter 2020 earnings are expected to increase 8.5% and revenues are expected to increase 5.6 %. Second quarter 2020 earnings are expected to increase 9.9% and revenue are expected to increase 6.4%

The U.S. Dollar Index weakened significantly on Friday, triggering a surge in precious metal and precious metal stocks to new six year highs.

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Economic News This Week

July Durable Goods Orders to be released at 8:30 AM EDT on Monday are expected to increase 1.1% versus a gain of 1.9% in June. Excluding transportation orders, July Durable Goods Orders are expected to increase 0.1% versus a gain of 1.0% in June.

Second estimate of U.S. GDP to be released at 8:30 AM EDT on Thursday is expected to slip to 2.0 from 3.1% in the first quarter.

Weekly Jobless Claims to be released at 8:30 AM EDT on Thursday is expected to increase to 215,000 from 209,000 last week.

July Personal Income to be released at 8:30 AM EDT on Friday is expected to increase 0.3% versus a gain of 0.4% in June. July Personal Spending is expected to increase 0.5% versus a gain of 0.3% in June.

Canadian June GDP to be released at 8:30 AM EDT on Friday is expected to increase 0.1% versus a gain of 0.2% in May.

August Chicago PMI to be released at 9:45 AM EDT on Friday is expected to improve to 48.1 from 44.4 in July.

August Michigan Consumer Sentiment Index to be released at 10:00 AM EDT on Friday is expected to slip to 92.5 from 98.4 in July.

 

Earnings News This Week

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for August 23rd 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for August 23rd 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for August 23rd 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

Don and Jon Vialoux at the Toronto MoneyShow

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In just over one month’s time we’ll be presenting at the Toronto Money Show on the topic of "Improving Investment Returns by Combining Seasonal, Fundamental, and Technical Analysis."

 

Panel Workshop Details

Sep. 21, 2:45 PM – 3:30 PM EST

Saturday

 

Improving Investment Returns by Combining Seasonal, Fundamental, and Technical Analysis

The end of September is the opportune time to review your investment portfolio prior to start of the traditional period of seasonal strength for equity markets in October. Which markets, sectors and securities have the best technical and fundamental profiles this year? Join the father-and-son team of Don and Jon Vialoux for an update.

 

Attend for free by navigating to the @MoneyShows website: https://conferences.moneyshow.com/moneyshow-toronto/workshop/991d533c1252427eba49b134bd6d6009/improving-investment-returns-by-combining-seasonal-fundamental-and-technical-analysis/?scode=048217 … $MACRO $STUDYpic.twitter.com/5r5aRNk26H

 

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Weekly comment by Greg Schnell from www.StockCharts.com

 

It Is A Wobbly World

Weekly Market Review

August 23, 2019

 

Following is a link:

https://www.youtube.com/watch?v=6K7l9vt7hhg&feature=youtu.be

 

 

Changes Last Week

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StockTwits released on Friday @EquityClock

Intuit $INTU, a NASDAQ 100 stock moved above $284.97 to an all-time high extending an intermediate uptrend. Strength is in response to higher than consensus fiscal fourth quarter revenues and earnings released overnight.

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Analog Devices $ADI, a NASDAQ 100 stock moved below $106.14 setting an intermediate downtrend.

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Canada Retail Sales down 5.8% (NSA) in June, weaker than the 1.4% decline that is average for this time of year. $MACRO #CDNecon #CAD

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US New Home Sales down 19.7% (NSA) in July, much weaker than the 5.1% decline that is average for this time of year. $MACRO #Economy #Housing

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Wide variety of Canadian gold producer stocks/ETFs break to new short term highs following 1.85% increase in the price of gold: $XGD.CA $ELD.CA $WPM.CA $AEM.CA $FNV.CA

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Silver and silver stocks are even stronger than gold and gold stocks with short term breakouts: $SLV $FR.CA

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Another silver stock breakout! Pan American Silver moved above $17.44 extending an intermediate uptrend.

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American Express $AXP, a Dow Jones Industrial stock moved below $120.15 setting an intermediate downtrend

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Johnson & Johnson $JNJ, a Dow Jones Industrial stock moved below $127.84 setting an intermediate downtrend

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Facebook $FB, a NASDAQ 100 stock moved below $179.34 setting an intermediate downtrend

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Healthcare Providers iShares $IHF moved below $168.67 setting an intermediate downtrend.

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Nutrien $NTR.CA, a TSX 60 stock moved below support at $64.72

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Cerner $CERN, a NASDAQ 100 stock moved below $69.10 completing a modified Head & Shoulders pattern.

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Amazon $AMZN, a NASDAQ 100 stock moved below $1,748.78 setting an intermediate downtrend.

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Walt Disney $DIS, a Dow Jones Industrial stock moved below $32.26 completing a modified Head & Shoulders pattern.

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Regeneron Pharma $REGN, a NASDAQ 100 stock moved below $287.66 extending an intermediate downtrend

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Gildan Activewear $GIL.CA, a TSX 60 stock moved below $47.51 extending an intermediate downtrend

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S&P 500 Momentum Barometers

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Percent of S&P 500 stocks trading above their 50 day moving average dropped last week to 30.00 from 37.27. Percent returned to intermediate oversold from intermediate neutral on a move back below 40.00.

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Bullish Percent Index for S&P 500 stocks increased last week to 49.80 from 46.60. The Index remains intermediate neutral.

 

TSX Momentum Barometers

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Percent of TSX stocks trading above their 50 day moving average dropped last week to 38.46 from 44.40. Percent returned to intermediate oversold from intermediate neutral on a move below 40.00.

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Bullish Percent Index for TSX stocks increased last week to 60.25 from 58.58. The Index changed to intermediate overbought from intermediate neutral on a move above 60.00.

 

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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One Response to “Tech Talk for Monday August 26th 2019”

  1. Larry/ON Says:

    NFI – Another big move higher. It looks like it still has room for an easy rise up to 30-31.

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