Tech Talk for Thursday January 16th 2020

Daily Reports Add comments

Pre-opening Comments for Thursday January 16th

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

Index futures were virtually unchanged following release of economic news at 8:30 AM EST. Consensus for December Retail Sales was an increase of 0.3% versus a gain of 0.2% in November. Actual was an increase of 0.3%. Excluding auto sales, consensus for December Retail Sales is an increase of 0.6% versus a gain of 0.1% in November. Actual was an increase of 0.7%. Consensus for January Philly Fed Index was an increase to 3.8 from 2.4 in December. Actual was an increase to 17.4. Consensus for Weekly Jobless Claims was an increase to 216,000 from 214,000 last week. Actual was a drop to 204,000

Morgan Stanley gained $1.19 to $54.13 after reporting higher than consensus fourth quarter revenues and earnings.

clip_image001[1]

UnitedHealth Group added $1.69 to $298.10 after Oppenheimer raised its target price to $343 from $312.

clip_image002[1]

GlaxoSmithKline (GSK $47.61) is expected to open lower after Barclays downgraded the stock to Underperform from Market Perform.

clip_image003[1]

Bombardier (BBD.B $) is expected to open lower after the company lowered fourth quarter revenue guidance.

clip_image004[1]

 

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/01/15/stock-market-outlook-for-january-16-2020/

Note seasonality charts on U.S. REIT ETF, Canadian REIT ETF, 7-10 year Treasury Bond iShares and the VIX Index.

 

StockTwits released yesterday @EquityClock

ADP $ADP, a NASDAQ 100 stock moved above $172.70 to an all-time high extending an intermediate uptrend

clip_image001

Platinum ETN $PPLT moved above $93.47 extending an intermediate uptrend.

clip_image002

Brookfield Asset Management $BAM.A.CA, a TSX 60 stock moved above $78.62 to an all-time high extending an intermediate uptrend.

clip_image003

Consumer Staples SPDRs $XLP moved above $63.36 to an all-time high extending an intermediate uptrend.

clip_image004

Exelon $EXC, an S&P 100 stock moved above $46.68 setting an intermediate uptrend.

clip_image005

Canadian Crude Oil Index ETN $CCX.CA moved below $9.40 setting an intermediate downtrend.

clip_image006

 

Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for January 15th 2019

clip_image008

Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for January 15th 2019

clip_image010

Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for January 15th 2019

clip_image012

Green: Increase from previous day

Red: Decrease from previous day

 

Greg Schnell’s Market Buzz

Recorded yesterday. Following is the link:

https://www.youtube.com/watch?v=lTQZ5CT_H2U&feature=youtu.be

Greg notes that the Technology sector has become frothy.

 

S&P 500 Momentum Barometer

clip_image013

The Barometer was unchanged yesterday at 75.75. It remains intermediate overbought.

 

TSX Momentum Barometer

clip_image014

The Barometer advanced 4.59 to 76.15 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

Sponsored By...



13 Responses to “Tech Talk for Thursday January 16th 2020”

  1. bruce Says:

    the AAII survey this week has the bulls up 8.8 to 41.8% and the bears down 2.4 to 27.8%….hmmmm…

  2. Larry/ON Says:

    Historically a rise in the VIX precedes a market drop so maybe you get some warning. VIX futures continue be crushed this morning so no one is putting on protection yet. If you want to look at a TSX traded VIX etf you can look at HUV.

  3. Larry/ON Says:

    Semis would likely be hit harder in a downturn so those holding them would have itchy trigger fingers for the sell button. Semis were down yesterday but just to the 9 day MA and they are rebounding nicely today back above the 4 day MA.

    Transports – Really spiking higher $DJTTR making new 52 week highs yesterday and again today and about to reach the all-time high from Sep/18 (less than 1% away). If you look at the transports you have a multi-year head and shoulders formation with Dec/18 being the head. Completing that formation would be a major positive signal for a long-term extension of the bull market. The same formation took place with the head in early 2016 and the breakaway after Trump’s election (same sequential head and shoulders formations as overall market except the transports have lagged the market on new all-time highs). This is all outside the immediate prospects of a market pullback.

  4. Ron/BC Says:

    Bernie

    I think you mentioned this stock the other day as I recall it has an odd symbol of O and I made & saved a chart of it. Nice breakout over 75 with a gap yesterday that so far seems to be holding.

    PPL.to that broke out the next day after you mentioned it is still holding above the $49 resistance breakout point with a gap.

    https://stockcharts.com/h-sc/ui?s=PPL.TO&p=D&yr=2&mn=0&dy=0&id=p88898009645&a=712023444

    https://stockcharts.com/h-sc/ui?s=O&p=D&yr=1&mn=0&dy=0&id=p87495656192&a=711786969

  5. Ron/BC Says:

    Bullish chart patterns are being seen on the REITS. Here is XRE.to. A double top formed at the 20.20 level in Dec and the 3 month price pattern now has formed a less familiar chart pattern called a Flat Topped Broadening Formation. The last two days have seen price clear the short term downtrendline and is back up to that previous double top of 20.20. A breakout above this chart pattern is wildly bullish but price is presently just testing this major resistance point and is a bit stretched out. Clearing and holding above 20.20 would project a rally over $21 or more. Many others in this group have positive looking charts.

    https://stockcharts.com/h-sc/ui?s=XRE.TO&p=D&yr=1&mn=0&dy=0&id=p17398096392&a=673066271

    https://stockcharts.com/h-sc/ui?s=RIT.TO&p=D&yr=2&mn=0&dy=0&id=p91376536793&a=711787166

  6. Larry/ON Says:

    AAPL and TSLA Most Shorted US Stocks – What happens if the shorts are wrong?

    https://www.cnbc.com/2020/01/16/apple-tesla-in-flux-as-most-shorted-stock-in-us-stock-market.html

  7. Bernie Says:

    Ron/BC,

    Re: Realty Income Corp (O)
    O is a very popular retirement stock. Their dividend has been raised every year since they listed in 1994 (27 years) at an annualized rate of 4.6%. That’s double the current inflation. Their annualized total return since inflation is 16.5%. Unfortunately this one is usually overpriced due to its popularity, I estimate about 16% based on current to 5-yr avg valuations I look at. The 3.56% dividend yield alone is close to the 10 year low. I have a full position in O so I not looking to add more. Actually, its the only U.S. stock I currently own, the rest of my holdings are in ETFs and one mutual fund. Its in my RRIF.

  8. rick Says:

    Bernie ,
    you mentioned = “their dividend has been raised at an annualized rate of 4.6%.”That’s double the current inflation.
    How about Mastercard ?
    In 2011 MA paid 0.06 $ dividend per share
    In 2020 MA will pay 1.60 $ dividend per share
    That is a 38,87 % annually rate of increasing the dividends !way better than 4,6 %
    Their dividend yield is only 0.43 % but with buyback yield is actually 2.41 %
    And Payout ratio % is only 14 % so there is a lot of room for the dividend to be increased in the future .
    https://www.morningstar.com/stocks/xnys/ma/dividends

  9. rick Says:

    regarding , Realty income group , I have a question :
    For example , in year 2018 , they made 1.26 $ in earnings per share but they paid 2.63 $ in dividends .
    https://financials.morningstar.com/ratios/r.html?t=0P000004M1&culture=en&platform=sal

    How they can pay in dividends more than they made in earnings ? the difference ? from where ?
    Maybe because they issued new shares and raised new capital ?
    In 2009 they had 104 millions shares and in 2018 that had 290 millions shares ?
    That is almost 3 times more shares !
    And maybe with that new capital they are paying the dividends ?

    what is your opinion ?
    Nonetheless the results are exceptional !

    http://www.tickertech.com/cgi/returns.mpl?symbol=O&smonth=01&sday=01&syear=1995&emonth=01&eday=16&eyear=2020&compareto=none&other=

  10. Ron/BC Says:

    Bernie

    Re:#7. Thanks for the explanation. Looking at a bunch of charts just about everything I look at looks very over bought and stretched out. Too rich for me……………..

  11. rick Says:

    Ron/BC

    try EXR , few days ago EMA10 crossed above EMA 20 ,

    http://schrts.co/tIWKvdrp

  12. Bernie Says:

    rick,
    Re: #8&9
    As you know I am an income/income growth investor. Until 2 years ago I had very close to 100% of my investments in Canadian, U.S. and the occasional UK dividend growth stocks. I dabbled with a few other strategies but DGI worked best for me in growing my income. Since I started with DGI in 2008 I’ve strived to maintain, and was successful in, an overall portfolio yield of between 4% to 4.5% with an average 8% DGR (dividend growth rate). When I was reinvesting all of my dividends my DGR rose to double digit figures. Through the course of the year in 2018 beginning in Feb shortly after a market correction I came to realize my stock portfolio was not as low in volatility as I had thought and that this correction may turn into the recession/bear market that even then was long overdue. Anyway long to short I gradually turned my RRIF into a globally diversified and balanced mix of stocks, ETFs and mutual funds still roughly 4.5% in yield (I’m withdrawing ~3.5%). My core base is now 9 Canadian stocks, 1 Canadian REIT, 1 UK stock and only 1 U.S. realty corp (O). They’re all safe blue chip, stalwart dividend growers. They’re surrounded with a large gamut of equity & fixed income dividend ETFs, income stocks and one mutual fund. I fully realize MA and V are quality growth and dividend growth stocks. I’ve hummed and hawed about adding then to my portfolio but just couldn’t stomach a 0.5% yield. It would have been very challenging to changeup my other holdings to maintain my target portfolio yield. For the record I hold CNR, a 1.8% yielder, which also has a nice DGR. I know the arguments on the other side regarding stock income including buyback yield, which is great for management but doesn’t put extra cash in my hands and “why don’t you harvest income by selling shares…it has the same overall effect”. Granted its the same on the day of receiving payments (both dividends and share harvesting) but going forward the latter would result in less shares working for me in dividend growth income. I choose to receive enough dividend income so I don’t HAVE to sell anything to make up the difference. Also, for the record, my global dividend mutual fund has a 4.3% holding in MA and one of my covered call ETFs holds a 4.3% weighting in V.

    Yes O has a lower DGR rate than my other stocks. I don’t care. Its a well managed steady eddy REIT Corp with a huge diversified portfolio of 5,800 properties under its belt. As you can see they’ve done quite well in their 27 years. REITs are required to pay out about 90% of their profits to get tax breaks. That leaves little extra for increasing their dividends. Because of their nature REIT distribution payout ratios are a calculated percentage of adjusted funds from operations (AFFO) rather than earnings. AFFO is similar to free cash flow (FCF) for a REIT. So for an example, in 2017 O’s EPS payout ratio was 216% but actually only 83% of AFFO. Its been in the low 80% range for several years. I’m not an accounting wizard so rather than attempting to explain the metrics I’ve attached two articles which explain it in more detail. Hope this helps.

    https://www.simplysafedividends.com/intelligent-income/posts/21-the-most-important-metrics-for-reit-investing
    https://www.fool.com/investing/2019/05/21/how-safe-is-realty-income-and-its-dividend.aspx

  13. Bernie Says:

    Ron/BC,

    Re: #10
    You’re welcome. Just a bit of how I view their value. You know, this is an election year. It usually is the strongest of the four year presidential term. Maybe that major market downturn will be delayed even further, especially with Trump in office. I really don’t want to sit on my small amount of cash. I’m thinking about test driving another strategy I’ve back tested. Its similar to BTSX which means holding stocks for a one year period. You won’t like it because it involves 10 stocks and doesn’t involve TA.

Entries RSS Comments RSS Log in