Tech Talk for Tuesday January 7th 2020

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Pre-opening Comments for Tuesday January 7th

U.S. equity index futures were mixed this morning. S&P 500 futures were unchanged in pre-opening trade.

Index futures were virtually unchanged following release of the November Trade report at 8:30 AM EST. Consensus was a deficit of $43.60 billion versus a deficit of $47.20 billion in October. Actual was a deficit of $43.1 billion

The Canadian Dollar was virtually unchanged at U.S. 77.00 cents following release of Canada’s November Trade report at 8:30 AM EST. Consensus was a deficit of $1.20 billion versus a deficit of $1.08 billion in October. Actual was a deficit of $1.09 billion.

Lululemon added $0.07 to $234.90 after Wedbush raised its target price to $235 from $225.

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Abercrombie & Fitch (ANF $17.26) is expected to open higher after Wedbush raised its target price to $18 from $16.

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Bank of America (BAC $34.77) is expected to open higher after JP Morgan raised its target price to $35.00 from $33.50.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/01/06/stock-market-outlook-for-january-7-2020/

Note seasonality charts on Facebook, Amazon, Netflix, Alphabet and Gold futures.

StockTwits released yesterday @EquityClock

Gold ETN $GLD moved above $146.82 to a 7 year high extending an intermediate uptrend.

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Wal-mart $WMT, a Dow Jones Industrial stock moved below $117.24 completing a double top pattern.

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Palladium ETN $PALL moved above $187.65 to an all-time high extending an intermediate uptrend.

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Cognizant Technology $CTSH, a NASDAQ 100 stock moved below $60.42 setting an intermediate downtrend.

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Costco $COST, an S&P 100 stock moved below $289.10 extending an intermediate downtrend.

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Energy stocks are responding to higher crude oil prices. Occidental Petroleum $OXY, an S&P 100 stock moved above intermediate resistance at $43.71.

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Editor’s Note: TSX Energy Index and related ETF: $XEG also responded. XEG moved above $9.44 extending an intermediate uptrend.

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Trader’s Corner

 

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for January 6th 2019

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Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for January 6th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for January 6th 2019

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Green: Increase from previous day

Red: Decrease from previous day

 

Technical Scoop

Thank you to David Chapman and www.enrichedinvesting.com for a link to the weekly comment:

http://enrichedinvesting.com/wp-content/uploads/2020/01/Bang-start-maybe-top-gold-soar-yield-fall-haven-sought-election-promise-climate-cost-decade-following.pdf

 

S&P 500 Momentum Barometer

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The Barometer dropped 1.80 to 73.75 yesterday. It remains intermediate overbought and showing signs of rolling over.

 

TSX Momentum Barometer

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The Barometer slipped 0.77 to 66.05 yesterday. It remains intermediate overbought and showing signs of rolling over.

 

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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17 Responses to “Tech Talk for Tuesday January 7th 2020”

  1. Ron/BC Says:

    The Canadian dollar broke out above 76.90 resistance and continues to hold above so far. The pattern is a bullish Ascending Triangle and the 50ema crossed above the 200ema last summer and is also holding and looking good. The above ratio chart of $CDW:$USD shows the CD$ trying to breakout above its channel which would be very bullish. The U.S.$ rolled over and continues to pullback which should give a boost to most other currencies and commodities overall. But I wouldn’t bet against the U.S.$ as it is the world’s reserve currency and when things get ugly in the world it is what people tend to run to for safety.

    https://stockcharts.com/h-sc/ui?s=%24CDW&p=D&yr=3&mn=0&dy=0&id=p50858532167&a=689160398

    https://stockcharts.com/h-sc/ui?s=%24USD&p=D&yr=2&mn=0&dy=0&id=p29795853892&a=673066460

  2. Rol Lew Says:

    I was surprised to see so many dividend etf’s traded in cda & also usa
    I would assume that the charts include dividends re-invested. I dont know how to figure that out for sure.
    .

    https://search.yahoo.com/search?fr=mcafee&type=E211US1056G0&p=dividend+etf

    .

    https://stockcharts.com/freecharts/candleglance.html?DXC.TO,DXG.TO,DXU.TO,DXF.TO,SDY,LVHD,SCHD,FLQD|D|0

  3. Ron/BC Says:

    Rol Lew

    I looked up DGI type ETFs and was also surprised how many there were. That’s why I asked Bernie if there was an ETF or two that covered all the individual stocks he’s researched that would cover them. I’m not interested in owning a bunch of the stocks and prefer an ETF to smooth out the various factors that cause volatility. I don’t care what percentage gains or losses each one has as I don’t spend percentages. I focus on how much each unit is which will tell me just how many units I can buy with X number of committed dollars for this investment. That will tell me how much leverage I have. Then I want to know what the volume is which will tell me just how quickly I can enter and exit the units and just how interested the rest of the world is in these units. And then I need to see a chart of this group of dividend type stocks as an ETF to see its performance or lack of. I’m not interested in a flat market that just pays out a dividend unless it is equivalent to increased value.

  4. Rol Lew Says:

    1 year + 6 mths chart
    Maybe it will pull back sometime to the 50 sma or to the 200? Nobody really knows.
    Maybe today is a good time to buy it, or maybe to sell it.
    .

    stockcharts.com/h-sc/ui?s=SCHD&p=D&yr=1&mn=6&dy=0&id=p21275756473

    DXF.TO appears to be a low volume trader.
    .
    https://stockcharts.com/h-sc/ui?s=DXF.TO&p=D&yr=1&mn=6&dy=0&id=p58497364973

    (same comments as for schd above).
    I would not mind buying any of these at some point, but for me, now is not the time. That pullback from 23 to 20 late last year was 13%. A year of off-setting divvys could be 4 – 5 %. For me, it’s not worth the risk to go in today at these nosebleed prices.

  5. Ron/BC Says:

    Rol Lew

    Everyone loves markets at their highs and hates them at their lows. Just human nature.

  6. Ron/BC Says:

    Rol Lew

    Here is a chart of SCHD and it seems to outperform SPHD and SPYD. But DGRO seems to have consistently outperformed SCHD.

    https://stockcharts.com/h-sc/ui?s=SCHD&p=D&yr=5&mn=0&dy=0&id=p83579145937&a=673066363

    https://stockcharts.com/h-sc/ui?s=DGRO&p=D&yr=3&mn=6&dy=0&id=p39664868662&a=673066427

  7. Ron/BC Says:

    Here is a 4 year chart of a bunch of dividend type ETFs. As always draw your own conclusions.

    https://stockcharts.com/h-sc/ui?s=DGRO&p=D&yr=4&mn=0&dy=0&id=p97970259834&a=673066212

  8. KC Says:

    Hi Ron/BC,

    Would appreciate a chart and your thoughts on AC.TO I suspect you are not a fan of the sector, but its hard not to notice how well its been doing in the past 3 yrs.

    Thanks,
    KC

  9. Ron/BC Says:

    KC

    AC.to has a nice looking chart. Price is testing its uptrendline and more importantly is testing the breakout support point at 47.43 that it tested again today. As long as it doesn’t break below 47 it looks good to me.

    https://stockcharts.com/h-sc/ui?s=AC.TO&p=D&yr=2&mn=0&dy=0&id=p17635181200&a=711714281

  10. Bernie Says:

    Ron/BC,

    I’ve looked at quite a few dividend paying ETFs both stateside and Canada.

    On the U.S. side I feel that Invesco S&P 500 Low Volatility ETF (SPLV) is your best bet for what you seek. They rank near the top in performance and are tops with respect to volatility. DGRO would be my 2nd best overall pick for you. They’ve shown to be more volatile than SPLV but are slightly above them in performance and dividend growth. DGRO has a slightly higher yield as well but, that said, both are in the low 2’s. I own SPLV.

    In Canada the ETF that stands head and shoulders above all the others is BMO Low Volatility Canadian Equity ETF (ZLB). I’ve been recommending this one in the Canadian Dividend Facebook group I’m in. It tops all the dividend ETFs in performance yet has, by far, the lowest volatility. What it doesn’t have is a high yield which can turn off those seeking income. I’ve put together a safe, decent core of 9 Canadian dividend growth stocks which suit me well for what I seek in overall yield, growth, dividend growth with low volatility. Amazingly ZLB has matched my core group with respect to volatility and growth when measured back to ZLB’s inception in 2011, so I added it.

  11. Ron/BC Says:

    Bernie

    Thanks for that info. Here is a chart of SPLV with SPY overlaid (can’t help myself,lol) I see price broke out above the September high at 57.82 and after a brief run up has now pulled back to that breakout point support area. Good place to get onboard technically. Can’t find much wrong with the chart. I guess one could take a partial position here at 58 and if price pulled back further to next support being the July high at 56 one could add there as there wouldn’t be much downside to that price point to be concerned about. So a decision could then be made as far as adding or not.

    https://stockcharts.com/h-sc/ui?s=SPLV&p=D&yr=2&mn=0&dy=0&id=p95276922238&a=690775752

  12. Ron/BC Says:

    A couple more Dividend ETFs.

    https://stockcharts.com/h-sc/ui?s=DGRO&p=D&yr=3&mn=6&dy=0&id=p93602638476&a=673066427

    https://stockcharts.com/h-sc/ui?s=ZLB.TO&p=D&yr=5&mn=0&dy=0&id=p19595501957&a=690646558

  13. Bernie Says:

    Ron/BC

    You’re welcome. If you do decide to purchase a U.S. dividend payer I wouldn’t advise holding it in your TFSA or you will lose a non-recoverable 15% of every dividend to Uncle Sam. I hold all my U,S. dividend payers in my RRIF. I haven’t made a final decision yet on what to get in my TFSA this year but it won’t be an ETF.

  14. Ron/BC Says:

    Bernie

    Ok, well all my U.S.$ are in my RRIF so I have options I guess. I originally put all my TFSA cash in that 4% GIC that is due in January 2021. But the monthly TFSA payments to me are just sitting in my bank doing nothing. I’ll have to call my accountant to see how much room I have for a TFSA now less what I’ve received in 2019 plus the $6000 new money for 2020. But then I have to deduct what payments I’ll receive from that 4% GIC in 2010 or I could be over what’s allowed. Then what to do with that TFSA money. Decisions,decisions. It makes a big difference when you don’t have to pay tax on TFSA income. So not sure what I’ll do with it. I see the RIT.to doesn’t have a lot of volume but I guess it’s not something one trades in and out of often so perhaps it doesn’t matter about volume. Sure would like to see a major selloff on the broad markets.

  15. Bernie Says:

    Ron/BC,

    You had indicated you might be interested in testing the longer term waters while picking up some dividend income via an ETF that has given good performance with low volatility. I feel ZLB is the one that most closely meets those requirements. Its also Canadian so you can hold it in your TFSA without worry over tax issues. Then If you get in at a good entry level you could set this one and just let it ride. https://www.bmo.com/gam/ca/advisor/products/etfs?fundUrl=/fundProfile/ZLB!hash!overview#fundUrl=%2FfundProfile%2FZLB%23overview

    A REIT ETF is also a good option. There are 4 major REIT ETFs in Canada, XRE.UN, VRE.UN, ZRE.UN and RIT. RIT is actively managed, XRE.UN & VRE.UN are index cap weighted and ZRE.UN is index equal weighted. I don’t care for cap weighted ETFs in this space because the largest 4 REITs hold close to 50% of the assets. That’s too much for me so I wouldn’t own XRE.UN or VRE.UN. That leaves RIT and ZRE.UN. RIT is very well managed, has easily been the top performer long term and has the least volatility. IMO ZRE.UN by nature of its equal weighting should also be a strong choice. Its actually outperformed RIT in the short term, ie; </= 3 years.

  16. Bernie Says:

    Ron/BC,

    For whatever reason I added a .UN to ZRE, XRE and VRE above. All holdings of those ETFs have the .UN in their ticker but the ETFs do not. Sorry for the oversite.

  17. Ron/BC Says:

    Bernie

    Thanks for the info. Here are the RIT.to and ZRE.to charts. Nice overall trends but with interest rates at artificially low levels and a strong economy they’ll always do well overall. Not much volume though but enough I suppose. Just talked to my accountant about TFSA room and glad I did as I was deducting the TFSA income I was making from my contribution room which I don’t have to do. Don’t know why I came to that conclusion but have it straight now. These two REITS and others area pulling back some presently and testing support.

    https://stockcharts.com/h-sc/ui?s=RIT.TO&p=D&yr=1&mn=6&dy=0&id=p93296472976&a=711900370

    https://stockcharts.com/h-sc/ui?s=XRE.TO&p=D&yr=1&mn=0&dy=0&id=p99127576870&a=673066271

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