Tech Talk for Monday December 2nd 2019

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Pre-opening Comments for Monday December 2nd

U.S. equity index futures were higher this morning. S&P 500 futures were up 2 points in pre-opening trade.

Wells Fargo slipped $0.11 to $54.35 after Raymond James downgraded the stock to Underperform from Market Perform

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Apple gained $0.92 to $268.17 after JP Morgan raised its target price to $296 from $290.

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Autozone (AZO $1,177.92) is expected to open higher after Wells Fargo and Credit Suisse raised their target price on the stock.

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Amgen (AMGN $234.72) is expected to open higher after Oppenheimer raised its target price to $250 from $240.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/11/29/stock-market-outlook-for-december-2-2019/

Note seasonality chart on Canada’s GDP.

 

The Bottom Line

World equity markets resumed their intermediate uptrend last week. Strength was recorded despite recent concerns including an earnings recession by major U.S. companies until the first quarter next year, growing efforts by the Democrats to impeach Donald Trump, continuing trade uncertainties between China and the U.S. and growing Middle East and Hong Kong tensions. Seasonal influences remain positive for most equity markets until the first week in January

 

Observations

Seasonal influences this year continue to follow their historic pattern. Seasonal influences on U.S. and Canadian equity markets turned positive in the second half of October. Seasonal influences for equity markets in other developed nations turned positive in early 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) were virtually unchanged last week, but remain intermediate overbought.

Medium term technical indicators for Canadian equity markets also were virtually unchanged last week, but remain intermediate overbought.

Most short term technical indicators for U.S. markets and sectors (20 day moving averages, short term momentum indicators) turned higher last week.

Short term technical indicators for Canadian markets and sectors also turned higher from last week.

Economic News This Week

October Construction Spending to be released at 10:00 AM EST on Monday is expected to increase 0.3% versus a gain of 0.5% in September.

November ISM Manufacturing Index to be released at 10:00 AM EST on Monday is expected to improve to 49.4 from 48.3 in October.

November ADP Employment Report to be released at 8:15 AM EST on Wednesday is expected to increase to 138,000 from 125,000 in October.

November ISM Services Index to be released at 10:00 AM EST on Wednesday is expected to slip to 54.5 from 54.7 in October.

Bank of Canada economic update is released at 10:00 AM EST on Wednesday. Overnight lending rate to major banks is expected to remain unchanged at 1.75%.

OPEC meeting on Thursday is expected to maintain current production quotas by membership states.

October U.S. Trade Deficit to be released at 8:30 AM EST on Thursday is expected to slip to $51.5 billion from $52.5 billion in September.

Weekly Initial Jobless Claims to be reported at 8:30 AM EST on Thursday are expected to increase to 221,000 from 213,000 last week.

October Canadian Trade Deficit to be released at 8:30 AM EST on Thursday is expected to slip to $700 million from $980 million in September.

October Factory Orders to be released at 10:00 AM EST on Thursday are expected to decline 0.5% versus a drop of 0.6% in September.

November Non-farm Payrolls to be released at 8:30 AM EST on Friday is expected to increase to 183,000 from 128,000 in October. November Unemployment Rate is expected to remain unchanged at 3.6% from October. November Hourly Earnings are expected to increase 0.3% versus a gain of 0.2% in October.

November Canadian Employment Report to be released at 8:30 AM EST on Friday is expected to report a 15,900 improvement versus a 1,800 decline in October. November Unemployment Rate is expected to increase to 5.6% from 5.5% in October.

December Michigan Consumer Sentiment Index to be released at 10:00 AM EST on Friday is expected to slip to 96.5 from 96.8 in November.

 

Earnings News This Week

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for November 29th 2019

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Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for November 29th 2019

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Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for November 29th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

StockTwits released on Friday @EquityClock

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Changes in Seasonality at this time of year

TSX Energy Sector normally bottoms at the end of November on a real and relative basis. Strongest period is from the third week in January to the end of April. Note that technicals are not there yet this year, but should be watched closely for change and an entry point.

 

S&P/TSX Capped Energy ($SPTEN) Seasonal Chart

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$SPTEN Relative to the S&P 500
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Ditto for U.S. Energy sector and related ETFs!

Energy Sector Seasonal Chart

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ENERGY Relative to the S&P 500
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Ditto for the Energy Equipment and Services Industry!

Energy Equipment Industry Seasonal Chart

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S5ENRE Index Relative to the S&P 500
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S5ENRE Index Relative to the Sector
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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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S&P 500 Momentum Barometers

Percent of S&P 500 stocks trading above their 50 day moving average increased last week to 72.95 from 67.94. Percent remains intermediate overbought, but continues to trend higher.

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Bullish Percent Index of S&P 500 stocks increased last week to 74.00 from 71.40. The Index remains intermediate overbought, but continues to trend higher

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TSX Momentum Barometers

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Percent of TSX stocks trading above their 50 day moving average increased last week to 70.78 from 63.18. Percent remains intermediate overbought, but continues to trend higher.

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Bullish Percent Index for TSX stocks increased last week to 69.10 from 68.67. The Index remains intermediate overbought, but continues to trend higher.

 

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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7 Responses to “Tech Talk for Monday December 2nd 2019”

  1. rick Says:

    If you have 3 minutes,watch this interesting opinion about capital flows into bonds and stocks.
    Opinions ?
    https://youtu.be/tD-uDjz2MIo

  2. Ron/BC Says:

    Rick
    I’ve always appreciated the analysis of Rick Santelli. Come to think about it I used to always watch CNBC and then started watching BNN for whatever reason. I guess that’s why I usually have BNN on mute most of the time as it’s not worth listening to. The ticker tape on the right is the only thing that interests me usually. Time to switch back to CNBC and get the real financial news.

  3. DougP Says:

    A little early, but here’s wishing you all a great Christmas, and a healthy and profitable New Year (if this seems a little premature its because I have had enough of the cold snap in Victoria – the arugula has slowed down – and am off to New Zealand today.) And thank you to all who offered such sage advice over the past year.

  4. Ron/BC Says:

    DougP

    Thanks and the same for you. I do get a kick out of so many here in Victoria that think we are hard done by with temperatures during the day around 5 to 8 degrees that’s considered cold. My partner wont go golfing unless it’s over 10 degrees with no chance of rain. While that does seem like a bummer you turn on the news and see what the weather is like East of the West Coast and it makes Victoria look like an Oasis,lol. But I’m sure New Zealand will be much warmer plus it’s nice to get away now and again. Enjoy. My partner is bugging me to line up a holiday in January/February but all I see is wild fires or Snow storms in California and Arizona or major floods in many areas. So Victoria looks pretty good right now to stay put unless I plan on a far away trip to Portugal or some such place. I’m not that adventurist but should try to come up with something…………. I’m open to some realistic ideas.

  5. Paula Says:

    Ron/BC,
    Thanks for your reply #8 yesterday. Yes, too many bulls – greed is dominant as you showed with your money.cnn link. Maybe that is changing today LOL.

    It sounds like you are working very hard for your real estate gains, so well deserved…sorry to hear you were injured in a fall and are now sick. At least you know yourself and that you just can’t seem to listen to Mother Nature…

    Maybe it would be worth it to hire some young lads to help move your furniture for the flooring guys or offer to pay them extra to do it. You don’t want to hurt yourself and not be able to play golf!

  6. Rol Lew Says:

    https://seekingalpha.com/article/4310026-global-stock-signal-occurred-five-times-since-1998?li_source=LI&li_medium=liftigniter-widget

  7. Ron/BC Says:

    Paula

    Good advice. Time to just bark orders rather than kill myself. And once cured I do need to be in shape for any golf I can squeeze in over the winter. I was looking forward to dumping a chunk of change on the XSP.to or some oversold ETF but don’t see any deals yet that are better than a coin flip.

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