Tech Talk for Monday February 10th 2020

Daily Reports Add comments

Pre-opening Comments for Monday February 10th

U.S. equity index futures were slightly lower this morning. S&P 500 futures were down 2 points in pre-opening trade.

The Canadian Dollar was virtually unchanged at US75.11 cents following release of January Canadian Housing Starts at 8:15 AM EST. Consensus was an increase to 202,000 from 197,300 units. Actual was 213,200.

Restaurant Brands International gained $4.14 to US$68.00 after reporting higher than consensus fourth quarter revenues and earnings.

clip_image001

Cigna added $0.08 to $209.00 after Deutsche Bank raised its target price from $229 to $258.

clip_image002[1]

Allergan gained $1.89 to $198.94 after reporting higher than consensus fourth quarter revenues and earnings.

clip_image003

Yum Brands (YUM $102.04) is expected to open lower after BTIG downgraded the stock from Buy to Neutral.

clip_image004[1]

 

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/02/08/stock-market-outlook-for-february-10-2020/

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

The Bottom Line

World equity markets started their traditional spring rally last week. Most equity markets moved into an intermediate uptrend in the second week in February after experiencing a period of high volatility from early January to mid-February. The spring rally usually continues to May but frequently is truncated in early April during U.S. Presidential Election years

clip_image002

 

Observations

Most major equity indices have a history of reaching an important seasonal low near this time. History is repeating.

clip_image004

clip_image006

clip_image008

clip_image010

clip_image012

clip_image014

clip_image016

Medium term technical indicators for U.S. equity markets (e.g. Percent of S&P 500 stocks trading above their 50 day moving average, Bullish Percent Index) moved higher last week and returned to intermediate overbought levels. See end of this report for charts.

Medium term technical indicators for Canadian equity markets were mixed last week, but remain near intermediate overbought levels.. See end of this report for charts.

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

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

Consensus for fourth quarter earnings by S&P 500 companies improved again last week thanks to slightly higher results: 64% of companies have released quarterly results to date. According to FactSet, blended fourth quarter earnings on a year-over-year basis are expected to increase 0.7% (versus previous estimate of a drop of 0.3% last week) and fourth quarter revenues are expected to increase 3.5% (versus 3.1% last week).

Beyond fourth quarter reports, consensus earnings for S&P 500 companies turn positive and earnings gains accelerate as the year progresses, albeit at a lower rate indicated last week. According to FactSet, first quarter 2020 earnings are expected to increase 3.7% on a year-over-year basis (versus 3.7% last week) and revenues are expected to increase 4.3 %. Second quarter 2020 earnings are expected to increase 5.1% (versus estimate of 6.1% last week) and revenues are expected to increase 4.8%. Third quarter earnings are expected to increase 9.8% (versus previous estimate of 10.1%) and revenues are expected to increase 6.0% (versus 5.8% last week). Fourth quarter earnings are expected to increase 11.9% (versus previous estimate of 13.2%) and revenues are expected to increase 6.1%. Earnings for all of 2020 are expected to increase 8.3% (versus a previous estimate of 9.3%) and revenues are expected to increase 5.2%.

 

Economic News This Week

January Canadian Housing Starts to be released at 8:15 AM EST on Monday is expected to increase to 202,500 units from 197,300 units in December

Federal Reserve Chairman Powell testifies before Congress at 10:00 AM EST on Tuesday and Wednesday

January Consumer Price Index to be released at 8:30 AM EST on Thursday is expected to increase 0.2% versus a gain of 0.2% in December. Excluding food and energy, January Consumer Price Index is expected to increase 0.2% versus a gain of 0.1% in December.

Weekly Initial Jobless Claims to be released at 8:30 AM EST on Thursday are expected to increase to 212,000 form 202,000 last week.

January Retail Sales to be released at 8:30 AM EST on Friday are expected to increase 0.3% versus a gain of 0.3% in December. Excluding auto sales, January Retail Sales are expected to increase 0.3% versus a gain of 0.7% in December.

January Capacity Utilization to be released at 9:15 AM EST on Friday is expected to slip to 76.8 from 77.0 in December. January Industrial Production is expected to slip 0.2% versus a drop of 0.3% in December.

December Business Inventories to be released at 10:00 AM EST on Friday is expected to increase 0.1% versus a decline of 0.2% in November.

February Michigan Consumer Sentiment to be released at 10:00 AM EST on Friday is expected to slip to 99.3 from 99.8 in January.

 

Selected Earnings News This Week

Another 65 S&P 500 companies and one Dow Jones Industrial company are scheduled to release results this week. Frequency of quarterly results released by major Canadian companies reaches a peak with a focus on reports released by energy and metals companies.

clip_image018

 

Trader’s Corner

Note changes in seasonality ratings

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for February 7th 2020

clip_image020

Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for February 7th 2020

clip_image022

Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for February 7th 2020

clip_image024

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

clip_image026

 

StockTwits released on Friday @EquityClock

Ford $F, an S&P 100 stock moved below $8.16 extending an intermediate downtrend

clip_image027

AbbVie $ABBV, an S&P 100 stock moved above $90.76 extending an intermediate uptrend.

clip_image028

Allergan $AGN, a NASDAQ 100 stock moved above $194.61 extending an intermediate uptrend.

clip_image029

Take Two Interactive $TTWO, a NASDAQ 100 stock moved below $133.36 completing a double top pattern

clip_image030

Grain ETN $JJGTF (one third each in wheat, corn and soybean futures) moved below support at $20.00

clip_image031

 

Greg Schnell’s Market Buzz

Released on Friday. Headline reads, “Other Ways To Monitor Resumption Of Business in China”. Following is a link:

https://www.youtube.com/watch?v=lMF4VbP2Oh4&feature=youtu.be

 

S&P 500 Momentum Barometers

clip_image032

Percent of S&P 500 stocks trading above their 50 day moving average increased last week from 45.89 to 63.13. Percent has moved from intermediate neutral to intermediate overbought on a move above 60.00.

clip_image033

Bullish Percent Index for S&P 500 stocks increased last week from 71.80 to 73.60. The Index remains intermediate overbought.

 

TSX Momentum Barometer

clip_image034

Percent of TSX stocks trading above their 50 day moving average increased last week from 53.92 to 59.72. Percent remains intermediate neutral.

clip_image035

Bullish Percent Index for TSX stocks dropped last week from 75.97 to 73.71. The Index remains intermediate overbought.

Sponsored By...



5 Responses to “Tech Talk for Monday February 10th 2020”

  1. Larry/ON Says:

    End Of Week Options Expiry May Be Catalyst For Large Upside Move – A lot of downside protection options are close to expiring worthless by Friday. I’m not an options guy but the implication is that no one will be exercising the right to sell through puts but will be exercising the right to buy on calls which will propel the market higher. The interesting thing happening is that at around the same time we should have news about whether the quarantine on millions of people in Hubei province has worked to stop the growth of new cases as these people get to the 14 day period. If the news is positive we should see a big pop higher in the market
    WTI – weak but not breaking the low from four trading days ago. CAD right on the line at 0.75. Perhaps the reversal in both comes when he get positive confirmation that we have a lid on Coronavirus.

  2. Larry/ON Says:

    AAPL – Interesting point now on this stock. Consolidating for 4 weeks. It has actually under-performed QQQ during this time. The concern is coronavirus affecting both I-phone production and sales in China. In the grand scheme this really should only be a hiccup in AAPL’s yearly business but the market sells first and asks questions later. The 50dayMA has been closing the gap and should cross over $300 this week. I’m thinking this sets AAPL up for a new move higher to the $350 range once we get some very positive news on control of coronavirus in China. Semis are in the same boat as AAPL. I continue to favour NVDA which is making new all-time highs today.

  3. Ana Says:

    $SPX Futures

    Monthly Chart

    https://invst.ly/ptg6m

    Overbought on the monthly chart. Not a good time to buy anything, in my humble opinion.

    Cast removal now on February 18th, three months after my fall. I really shmucked my arm and hand.

  4. Paula Says:

    Ana,
    Thanks for the chart. I agree with you but the market has a mind of its own.
    I hope your arm and hand are totally healed and you will be back to normal soon. Warm water exercise is like physio if it is available.

  5. Larry/ON Says:

    SOXX – Bullish engulfing bar. NVDA highest vol in 7 weeks on 4.5% rise and will test all-time high at 291.33 IMO by April for a $29 upside (11%).
    MSFT – Money is shifting to software and cloud stocks – $200 will be reached quickly

Entries RSS Comments RSS Log in