Tech Talk for Thursday September 26th 2019

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Pre-opening Comments for Thursday September 26th

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

Index futures were virtually unchanged following final estimate of economic news at 8:30 AM EDT. Consensus for U.S. second quarter real GDP was unchanged from the previous estimate at 2.00%. Actual was unchanged at 2.00%. Consensus for Weekly Initial Jobless Claims was an increase to 212,000 from 208,000 last week. Actual was 213,000.

Conagra gained $1.93 to $31.85 after reporting higher than consensus fiscal first quarter earnings.

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Beyond Meat jumped $27.62 to 138.32 after McDonald’s announced a pilot project that will include Beyond Meat’s plant-based burgers.

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KB Homes gained $0.52 to $32.90 after reporting higher than consensus third quarter earnings.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/09/25/stock-market-outlook-for-september-26-2019/

Note seasonality chart on New Home Sales.

 

Observations

U.S. Dollar Index and its related ETF moved sharply higher

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Commodity prices responded by moving lower. See changes in technical score in the Commodities section of this report.

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StockTwits released yesterday @EquityClock

Nike $NKE, a Dow Jones Industrial stock moved above $89.64 to an all-time high extending an intermediate uptrend. Responded to higher than consensus fiscal first quarter earnings.

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eBay $EBAY, a NASDAQ 100 stock moved below $38.41 completing a double top pattern. Change in CEO announced this morning.

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Intuit $INTU, a NASDAQ 100 stock moved below support at $261.94

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TSX Technology iShares $XIT.CA moved below support at $26.00.

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for September 25th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for September 25th 2019

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Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for September 25th 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 3.20 to 70.00 yesterday. It remains intermediate overbought.

 

TSX Momentum Barometer

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The Barometer dipped 0.87 to 67.53 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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9 Responses to “Tech Talk for Thursday September 26th 2019”

  1. Ron/BC Says:

    For those MERA-WANNA stock lovers HMMJ.to is once again at the bottom of its long term trading range around $13.

    https://stockcharts.com/h-sc/ui?s=HMMJ.TO&p=D&yr=2&mn=0&dy=0&id=p83037973618&a=673066101

  2. Ron/BC Says:

    Bernie

    My partner has done well despite the fact she doesn’t know anything about her portfolio. I asked about the fees they charge and she said she didn’t know or care as long as she keeps getting her monthly deposit and her balance doesn’t disappear. Can’t argue with her either with such a strong and steady performance, as it really doesn’t matter what the fees are I guess.
    It reminds me of a realtor I had in 1983 when you couldn’t give away a house in Victoria and I needed to sell and buy for family reasons. She said to increase the commission to 1% above the standard commission rate and all the realtors would see they would get extra $1000 if they sold my place. Sure enough I had all kinds of viewers and at least two concrete offers to choose from when no one was selling their places. Sometimes paying the highest fees is the best policy. They say you get what you pay for.

    An old mechanic I dealt with years ago had a sign on his wall that stated:
    “If you want a good quality bushel of oats you must pay a fair price. But if you will accept a bushel of oats that has gone through the horse it will likely be much cheaper.”

  3. Bernie Says:

    Ron/BC,

    In the investment business I would say its rare that you get what you pay for. Many studies have found higher fees lead to inferior performance, especially when compounded over a long time frame. The adage on your mechanic’s sign sounds reasonable but I don’t necessarily agree without further research. I’m sure opinions would vary on what a fair and reasonable price is. I would want to be reassured I wasn’t being taken to the cleaners by trusting a single opinion.

    Your ladyfriend’s investment statements should show her management fees and performance data. If it was me, bottom line, I would want to know how my investments are performing compared to an equivalent benchmark or product. At the very least I’d suggest if you’re not beating the market with higher fees you might as well buy the market via low cost indexed products.

  4. Ron/BC Says:

    Bernie

    With all the ETFs available today I don’t see why anyone would want to be invested with the average fund manager. As long as one has the discipline to know when enough is enough they shouldn’t need a lot of so called professional advise.

  5. Bernie Says:

    Ron/BC,

    Re: #4
    I agree 100%. It would be quite easy to know when enough is enough by comparing your performance to a benchmark or an equivalent product. Your broker is required to spell out performance and fees in their statements.

    For simplicity and low fees you might consider something like indexed all-in-one “Vanguard Conservative Income ETF Portfolio (VCIP)”. Its quite similar to your ladyfriend’s portfolio in overall content, ie; 80% fixed income, 20% equities, but comes with a very low MER of 0.25%. VCIP has only been around since Jan 2019 but its ETF holdings have been in existence longer so I was able to extrapolate a 2-yr annualized return if you find this useful. My calculations indicate the annualized TR to be near 5.8% and annualized 2-Yr price return near 3.25%.

    I would never recommend average mutual funds over indexed ETF products but I would I would strongly consider Mawer Funds if income isn’t important to you. Mawer funds have an excellent track record of strong management and performance. An 80% Mawer Canadian Bond Fund (MAW100)/20% Mawer Global Equity Fund (MAW120) mix would have returned a 2-Yr annualized TR of 6.7%. Mawer Balanced Fund (MAW104) which contains roughly 32% fixed income/68% equity returned a 2-Yr annualized TR of 8.4%.

  6. Ron/BC Says:

    Bernie
    Thanks for the heads up and ETF symbols. I’ll go over them when I get home
    Just finished golfing and having coffee. In early November I’ll have my condo money and after I pay for the next one I’m going to get serious about putting a good chunk money on something like you’ve posted. But I do need income being self employed most of my life. That’s why I horde cash like I do as dont get a company pension. (It pays to be paranoid.) What I dont like is the low volume so many $TSX ETFs have. Not good to have no interest with investors.

  7. Bernie Says:

    Ron/BC,

    Mawer Funds focus on TR so their yields tend to be low. You could still simulate income from them by selling units if that is what you seek. As for low volume on Canadian ETFs I don’t see that as an issue unless you’re trading them frequently or if the underlying assets were also low volume. Its rarely a concern for a buy and hold (or infrequently monitor) investor. You’re not going to see much volatility anyway with a conservative portfolio.

    We haven’t touched upon dividend investing at all in recent comments. That’s a bit more hands with slightly higher risk on if you want to go that route. In light of that article I linked on Tuesday I’m now thinking a reasonable path to take, if starting from scratch, would be to go all in with an ultra conservative all-in-one etf and then layer in slowly over time into a dividend growth portfolio. Perhaps make your end goal a 50% all-in-one conservative global ETF and 50% in a mix of quality dividend growth stocks and/or ETFs. The latter 50% could be designed take care of growing income requirements due to inflation.

  8. Ron/BC Says:

    Bernie
    I looked at all the Mawer Funds and I was looking for ones that were consistent in their percentage gains over 1,3,5 and 10 years. Consistency shows what one can more likely count on going forward. At least more so than big differences in each time frame. Never a guarantee of course but much higher odds of a repeat performance when each of those time frames were about the same. Mawer #104 Balanced Fund averaged 7%. Mawer #108 U.S. Equity Fund averaged 15%. Mawer #120 Global Equity Fund averaged 11% and Mawer #130 Global Balanced Fund averaged 8%. So I would think those 4 funds are a good selection of Funds that seem “consistent over multiple time frames” & well balanced. The U.S.#108 Equity Fund oddly enough has also been consistent over a 10 year period as well as each of the other time frames so should be added I would think. I looked at a variety of listed ETFs and wasn’t that impressed with them.

  9. Bernie Says:

    Ron/BC,

    I place greater importance on consistency in beating the benchmark rather than a smoothing of returns but we’re all different I guess. Whatever the case those 4 funds you mention are very good ones. The 2 balanced funds, MAW104 & Maw130, will have lower average returns and less volatility than MAW108 & MAW120 because they carry a good measure of fixed income content (30% to 40%). If you hold all 4 in equal weight you’d have a healthy mix of international content but you’d be too light in Canadian content and too heavy in U.S. content. You’d also be quite light in fixed income. I think a 50/50 split of MAW104 & MAW120 would be decent for a long term hold or an equal weighted mix of MAW104, MAW130 & MAW120 for the more conservative investor.

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