Tech Talk for Monday September 9th 2019

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Pre-opening Comments for Monday September 9th

U.S. equity index futures were higher this morning. S&P 500 futures were up 10 points in pre-opening trade.

Chipotle gained $8.42 to $844.74 after Wedbush upgraded the stock to Outperform from Neutral. Target was increased to $980 from $780.

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Royal Caribbean added $1.47 to $108.41 after the company raised its dividend by 11%.

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HP Inc slipped $0.35 to $18.75 after Bernstein downgraded the stock to Market Perform from Outperform.

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AT&T jumped $2.60 to $38.85 after activist investor Elliott Management outlined plans to boost the stock’s share price.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/09/06/stock-market-outlook-for-september-9-2019/

Note seasonality charts on U.S. Non-farm Payrolls and Canadian Employment

The Bottom Line

World equity markets moved higher last week despite elevated volatility. Equity markets have a history of elevated volatility at this time of year with a flat/downward bias from mid-July to mid-October. 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

Seasonal influences on U.S. equity markets tend to be positive in the first half of September and negative in the second half. Seasonal influences for Canadian equity markets tend to peak at the end of August followed by weakness to at least mid-October.

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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 higher again last week. See charts near the end of this report

Medium term technical indicators for Canadian equity markets also moved higher 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) remained at overbought levels last week.

Short term technical indicators for Canadian markets and sectors also remained at overbought levels last week

Analysts continue to reduce earnings and revenue estimates for S&P 500 companies. According to Factset, third quarter earnings on a year-over-year basis are expected to drop by 3.6% (greater than the previous estimate of a drop of 3.5% last week) and revenues are expected to increase 2.9% (down from an increase of 3.1%). Earnings declines by companies with more than 50% of sales outside of the U.S. will be particularly hard hit in the third quarter due to strength in the U.S. Dollar Index. Consensus calls for a 10.7% decline. Eighty companies have issued negative third quarter guidance and 30 companies have issued positive third quarter guidance. Fourth quarter earnings are expected to increase 3.4% (down from 3.5%) and fourth quarter revenues are expected to increase 3.8% (down from 4.0%). For all of 2019, earnings are expected to increase 1.4% (down from 1.5%) and revenues are expected to increase 4.3% (down from 4.4%). First quarter 2020 earnings are expected to increase 8.1% (down from 8.2%) and revenues are expected to increase 5.5 % (down from 5.7%). Second quarter 2020 earnings are expected to increase 9.2% (down from 9.3%) and revenue are expected to increase 6.4% (down from 6.5%)

 

Economic News This Week

August Canadian Housing Starts to be released at 8:15 AM EDT on Tuesday are expected to drop to 204,500 from 222,000 in July.

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

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

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

August Retail Sales to be released at 8:30 AM EDT on Friday are expected to increase 0.2% versus a gain of 0.7% in July. Excluding auto sales, August Retail Sales are expected to increase 0.1% versus a gain of 1.0% in July.

July Business Inventories to be released at 10:00 AM EDT on Friday are expected to increase 0.3% versus a no change in June.

September Michigan Sentiment Index to be released at 10:00 AM EDT on Friday is expected to increase to 90.7 from 89.8 in August.

 

Earnings News This Week

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for September 6th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for September 6th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for September 6th 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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Jon and Don Vialoux at the Toronto MoneyShow

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In just three week’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

 

Background on Don Vialoux

https://conferences.moneyshow.com/moneyshow-toronto/speakers/fftoms096672/donald-vialoux/?scode=048217

 

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StockTwits released on Friday @EquityClock

Lululemon $LULU moved above $194.25 to an all-time high extending an intermediate uptrend. Strength is related to higher than consensus second quarter results, positive 2019 guidance and target hikes by JP Morgan and Susquehanna

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Natural gas ETN $UNG moved above $21.39 extending an intermediate uptrend.

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‘Tis the season for natural gas to move higher to late December! $UNG $HUN.CA $HNU.CA

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Symantec $SYMC, a NASDAQ 100 stock moved above $23.85 setting an intermediate uptrend.

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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 increased last week to 59.80 from 43.80. Percent increased to just below 60.00, the level considered to be intermediate overbought.

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Bullish Percent Index for S&P 500 stocks increased last week to 61.40 from 53.40. The Index changed to intermediate overbought from intermediate neutral on a move above 60.00, but has yet to show signs of peaking.

 

TSX Momentum Barometers

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Percent of TSX stocks trading above their 50 day moving average increased last week to 60.78 from 49.36. Percent changed to intermediate overbought from intermediate neutral on a move above 60.00, but has yet to show signs of peaking.

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Bullish Percent Index for TSX stocks was unchanged last week at 61.09. The Index remains intermediate overbought, but has yet to show signs of peaking.

 

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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3 Responses to “Tech Talk for Monday September 9th 2019”

  1. Ana Says:

    $SPX Futures

    Rolling over here on my day trading charts. Injured my wrist so I can not type much.

  2. dave/ab Says:

    Ana

    ntr

    I feel your pain. A little anti-inflammatory will do the trick – Ibuprofen. Tylenol for arthritis if you think it may be arthritic.

  3. Ana Says:

    Thank you, dave/ab.

    I injured this wrist long ago but my doctor did not think I needed an xray. It has been so painful for about a year. So this weekend I cut the lawn and my wrist went numb with shooting, stabbing pains. After not sleeping for a few days, I went to emergency and the xray indicated an fractured joint which is a widening of the space in the joint. More xrays next week. Not sure how this will heal.

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