Tech Talk for Friday August 30th 2019

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Pre-opening Comments for Friday August 30th

U.S. equity index futures were higher this morning. S&P 500 futures were up 16 points in pre-opening trade.

Index futures were virtually unchanged following release of economic news at 8:30 AM EDT. Consensus for July Personal Income was an increase of 0.3% versus a gain of 0.4% in June. Actual was an increase of 0.1%. Consensus for July Personal Spending was an increase of 0.5% versus a gain of 0.3% in June. Actual was an increase of .6%.

The Canadian Dollar moved slightly higher to 75.44 cents U.S. following release of June Canadian GDP at 8:30 AM EDT. Consensus was an increase of 0.1% versus a gain of 0.2% in May. Actual was an increase of 0.2%.

Campbell Soup gained $1.88 to $45.19 after raising earnings guidance.

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Dell jumped $4.36 to $51.13 after reporting higher than consensus quarterly sales and earnings.

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Big Lots advanced $2.00 to $24.01 after reporting higher than consensus quarterly earnings.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/08/29/stock-market-outlook-for-august-30-2019/

Note seasonality charts on U.S. import and export trade.

 

 

Observations

Consumer Staples SPDRs XLP moved above $61.02 to an all-time high.

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Natural gas moved above $2.27 per MBtu completing a short term base building pattern. Responding to anticipation of a temporary shutdown by oil and gas production in the Gulf of Mexico due to the arrival of Hurricane Dorian.

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StockTwits released yesterday @EquityClock

Suncor $SU.CA, a TSX 60 stock moved above $38.44 completing a short term double bottom pattern.

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Canadian crude oil price index $CCX moved above $10.93 extending an intermediate uptrend. Canadian "oily" stocks are responding. $XEG.CA $SU.CA

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TC Energy $TRP.CA, a TSX 60 stock moved above $67.15 to an all-time high extending an intermediate uptrend.

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Restaurants International $QSR.CA, a TSX 60 stock moved above $104.07 to an all-time high extending an intermediate uptrend.

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Canadian Western Bank $CWB.CA moved above $31.12 extending an intermediate uptrend. The Bank reported higher than consensus fiscal third quarter earnings and raised its dividend.

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BCE $BCE.CA, a TSX 60 stock moved above $62.75 to an all-time high extending an intermediate uptrend.

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Magna International $MG.CA, a TSX 60 stock moved above $66.39 extending an intermediate uptrend.

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Trader’s Corner

Editor’s Note: Moves above 20 day moving average by a wide variety of indices and sectors triggered a strong upside technical move yesterday.

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for August 28th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for August 28th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for August 28th 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 advanced 7.20 to 43.80 yesterday. It changed to intermediate neutral from intermediate oversold on a move above 40.00.

 

TSX Momentum Barometer

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The Barometer advanced 7.05 to 49.36 yesterday. It remains intermediate neutral.

 

Next report

As Monday is a statutory and public holiday in North America, the next report will be released on Tuesday, September 3rd.

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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16 Responses to “Tech Talk for Friday August 30th 2019”

  1. Ron/BC Says:

    So here we are once again with the $SPX at the top of its one month channel between 2940 and 2815. The RSI 21 is still on a sell signal since early August. It seems to have a better batting average than most of the talking heads out there and it doesn’t say a word. No blah,blah blah fundamental b.s. with the RSI. And it doesn’t even tweet……….thankfully.

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=1&mn=0&dy=0&id=p01758055737&a=682178007

  2. FishFat Says:

    Ron/BC, re:$SPX
    The RSI(21) is a handy tool. With the benefit of the close this Friday, the RSI(21) is now above the 50-level, [50.83 to be precise]. The conventional MACD has made a bullish cross (although below the 0-level). The OBV and Accum/Dist line are rising in unison – another positive sign. Looks like the $SPX is turning bullish. That is not what my gut is telling me, but I have to believe the charts.
    http://schrts.co/PzVsaTun

  3. Ron/BC Says:

    FishFat

    I always say “Nose pokes don’t count”. And the RSI 21 is just poking its nose above the 50 line much like it did last November and December and again in May. And see the $SPX tag 2940 and back off on a Friday close. Bottom line is price is king so right now the short sellers have a decision to make. And that is cover the short or add to their positions. Shouldn’t take long to find out………………

    Also I heard that everyone and his dog is at record long positions in Gold and related markets. Never a good sign when everyone is on one side of the boat. I recall an old guru I used to subscribe to long ago. Joe Granville always said “If it’s obvious, it’s obviously wrong.” I’ve found that very helpful in most everything in my life.

  4. FishFat Says:

    Ron/BC
    For sure I won’t be convinced that the $SPX is bullish until the resistance at 2940 is taken out. Interesting point you made on how the index pulled back after tagging that level.

    Take a look at the RSI(21) on the weekly chart. It is still in bullish territory. That surprised me. Maybe there is life left in the bull after all.

    Next week should be an interesting, all the big traders will back from summer vacation and ready to get serious.
    http://schrts.co/NyvSpKCY

  5. Ron/BC Says:

    FishFat

    Here is a weekly chart of the $SPX. I’ve found the RSI 21 does not work with all Index ETFs in all time frames for whatever reason. So I just accept what works and what doesn’t. The RSI 21 isn’t that accurate with Weekly $SPX charts. Here is a Weekly chart with the Modified MACD 50,200,1 with a 20ema for crossover signals. It is a reasonably timely indicator and could be used for a stand alone trend indicator for buys and sells. The next crossover has not yet cleared its moving average. But look at the price action of the $SPX. Nothing negative about price action other than it is a fair ways from its uptrendline at 2450 and over 400 points above its 200ema. As far as the health of the last new highs note the negative divergence seen on both the RSI 8 and RSI 21. Each time this has occurred in the past price has pulled back and at least consolidated for some time. Bottom line it looks like a sell off to the 200ema and uptrendline would be a healthy pullback as price is stretched out with a major loss of momentum. So while a breakout over 2940 would see a lot of short covering and fresh buying and price double top at the last new high over 3000, it would not likely hold and would likely pullback to that 2400-2500 area which would be an even bigger sell off from that old high area. If the $SPX is going to continue its bull run it does need to test its long term uptrendline & 200ema and then see strong momentum once again. A breakout over 2940 now would only delay the necessary inevitable pullback. That’s what I see fwiw……..

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=W&st=1994-03-10&id=p90902659736&a=673066405

  6. FishFat Says:

    Ron/BC
    Very interesting analysis … and convincing. It is always good to look at the big picture. Thanks.

    That negative divergence is unsettling.

  7. Paula Says:

    Ron/BC and FishFat,
    Thanks for the interesting discussion and great charts. Always good to look at things from a longer term perspective e.g. weekly charts. The RSI negative divergences do indicate slowing momentum so a pullback to test that long term uptrend and/or 200ema would be “healthy” but would sure cause a lot of panic. Then we might also expect a test of the December 2018 low ~ 2346 just to really scare the bulls. If the market could do that with positive momentum divergences, that could be a great buying opportunity. Of course, this is just idle weekend speculation … and a reminder that anything is possible…

  8. Ron/BC Says:

    Paula

    Here is a Monthly chart of the $SPX. The Modified MACD 20,50,10 gave some solid trend signals over the last 25 years. Presently still on a sell signal. And the RSI’s still showing negative divergences on the last group of highs. So while price is still hanging in there the $SPX does need to test that 2450-2500 price area & uptrendline to remain in a bull market. I agree a test of this area with some positive divergences would be bullish.

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=M&st=1990-03-10&id=p76839278703&a=673066407

  9. Ron/BC Says:

    Re:#1 Post
    Here is the Daily $SPX as in #1 without RY.to overlaid. I had forgotten to remove the RY.to overlay.

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=1&mn=0&dy=0&id=p46855117408&a=682178007

  10. Paula Says:

    Ron/BC,
    Thanks for the monthly chart of $SPX – even better than the weekly.

    I have been thinking of my short list of TSX stocks which I follow and RY is the one I am focussing on adding so it was interesting, for me, that I hadn’t noticed that you had RY.TO overlaid on the first $SPX chart until you posted the chart without it. RY.TO seems to outperform on the way up and underperform on the way down. I am saving the chart with RY.TO on it for future reference. Thanks!

  11. KC Says:

    Hi Ron/BC,

    Would really appreciate having your thoughts on bce on both sides of the border please. Do you think it’s going to retreat from its current position on the tsx given that it’s at a double top?

    Thanks
    KC

  12. Ana Says:

    Still working through a large triangle formation:

    https://invst.ly/bzgxk

  13. Paula Says:

    Ana,
    Thanks for the updates you do. I realize that you are more short term focused. Hope your trading goes well.

  14. Ron/BC Says:

    KC

    BCE continues to have higher highs and higher lows and recently broke out above that double top at $46.50. That is also where its uptrendline is. So as long as price holds above $46.50 all is well.

    BCE.to is in a similar position with its recent breakout over the June high. Price needs to hold above at least $61.50-$62 area to remain bullish.

    https://stockcharts.com/h-sc/ui?s=BCE&p=D&yr=2&mn=0&dy=0&id=p28154057928&a=673066473

    https://stockcharts.com/h-sc/ui?s=BCE.TO&p=D&yr=2&mn=0&dy=0&id=p12160256558&a=673066205

  15. Ron/BC Says:

    Paula

    Here is the ZEB.to equal weight Canadian Bank stocks ETF. I’ve overlaid the Fibonacci moving averages I like to use on the one year Daily charts along with the 50ema and 200ema. They show the flow of the market nicely although it does appear busy overall. As far as price goes one can see the breakdown of important price support at $27.50 in August and price has now rebounded back to that breakdown point. But the Modified MACDs are still bearish. Price needs to clear $27.50 and hold to suggest a rebound on the banks ETF. Also note the Long Modified MACD 50,200,20 did not give a buy signal in August like the Short Modified MACD did as well as the RSI 21. The Long Modified MACD is very good at telling you the rally that other shorter indicators are signalling shouldn’t be taken as they will be short lived and shallow. It doesn’t mean one cant take shorter term buy signals but as long as the Long M.MACD remains weak and on a sell signal doesn’t expect a major rally ahead.

    https://stockcharts.com/h-sc/ui?s=ZEB.TO&p=D&yr=1&mn=0&dy=0&id=p12512817292&a=678874213

  16. Ana Says:

    #13. Paula,

    Thank you, Paula. Yes, the charts that I post are focused on short term trades.

    Not sure now if this will fall below the triangle. It is moving too slowly.

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