Tech Talk for Thursday March 12th 2020

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Pre-opening Comments for Thursday March 12th

U.S equity index futures were lower this morning. S&P 500 futures were down 139 points. Index futures are responding to growing coronavirus fears.

Index futures were virtually unchanged following release of economic news at 8:30 AM EDT. Consensus for the February Producer Price Index was a slip of 0.1% versus a gain of 0.5% in January. Actual was a decline of 0.3%. Excluding food and energy, consensus for the February Producer Price Index was a gain of 0.1% versus a gain of 0.5% in January. Actual was a decline of 0.6%. Consensus for Weekly Jobless Claims was an increase to 218,000 from 215,000 last week. Actual was 211,000.

Airline stocks are expected to open lower after President Trump initiated a 30 day travel to Europe ban.

Darden Restaurants dropped $4.80 to $65.41 after Oppenheimer lowered its target price from $125 to $96.

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Walt Disney fell $6.78 to $98.73 after Imperial Capital lowered its target price from $144 to $118.

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Gap Stores lost $0.47 to $10.50 after Wedbush lowered its target price from $20 to $12.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/03/11/stock-market-outlook-for-march-12-2020/

Note seasonality charts on TSX Gold Index, Consumer Price Index and Crude Oil Days of Supply.

Observations

Yesterday, the Dow Jones Industrial Average moved into an official bear market on a drop of more than 20% from its peak in mid-February

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Ditto for the TSX Composite Index!

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StockTwits comments released yesterday @EquityClock

Even gold stocks/ETFs are under technical pressure in this market! $GDX $GDXJ The Junior Gold Miners ETF is down 28% from its peak in late February.

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US Consumer Price Index up 0.3% (NSA) in February, weaker than the 0.4% increase that is average for this time of year. The impact of the coronavirus is being hinted within the results. Signup now and we’ll show you where. https://charts.equityclock.com/subscribe $MACRO $STUDY #CPI

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for March 11th 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for March 11th 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for March 11th 2020

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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 dropped 4.81 to 3.41 yesterday. It remains deeply intermediate oversold and has yet to show significant signs of a bottom

 

TSX Momentum Barometer

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The Barometer dropped 7.00 to 3.11 yesterday, the lowest level since October 2008. It remains deeply intermediate oversold, but has yet to show significant signs of a bottom.

 

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




26 Responses to “Tech Talk for Thursday March 12th 2020”

  1. tony Says:

    Hi,
    people are scared crazy so they are crying.( buffett has the best saying by low sell high)

    after I called the top a few weeks ago by selling while some were buying.

    I am slowly buying stocks 1000$-3000$ here going with the safe bets like banks. and there repurchasing slowly bought 50 shares of a bank stock.

    but I think people need some weed to clear there minds.

  2. DougP Says:

    Hello Tony. Good to hear from you in these troubled times. I remember your saying many years ago, when the Canadian banks are paying 5%, load up. Its been a long wait.

  3. tony Says:

    Don’t want to be full of myself just stating facts and is just to bad we can’t go to the archives.

    I would love to post my march 09, 2009 and october 4 2010, 10 am call of a market low.

    or my call during the 2012 holidays for the SnP to hit the 2000 mark

  4. bruce Says:

    the AAII survey shows the bulls at 29.7% down 9 and the bears at the highest level since 2013 at 51.3% plus 11.7…..

  5. Ana Says:

    #1. tony,

    From my day trading and swing trading short term charts, we are close to a bounce. However, because of the damage to the market, I am not sure for how long that bounce will happen until I can see the charts and what exactly is happening.

  6. Wayne Says:

    Tony!
    You’re alive! HA.
    Be very careful here. These are very abnormal times we live in.
    A number of Oil stocks that I once owned are now penny stocks!
    Still a lot of fear and panic out there. No idea where this will end. But, I feel that we are at the beginning of a long term bear market.
    GLTA!

  7. Ron/BC Says:

    Nice uptrendline…………………… Doesn’t look like a bear market does it,lol.

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=M&st=1975-03-12&id=p38168974121&a=726668200

  8. tony Says:

    at the time banks were paying a nice hefty 10% dividend. at 5-6% I feel its a nice bargain.

    still I can’t believe the bargains, CNR at 97 thats over 30% discout, will it recover in the next week i don’t know when it will reach that 125 lvl i sold it a few weeks ago but at 97 I feel like a winner.

    when this will be all over People who had dry powder will feel like winners for being able to invest.

    at this time my crystal ball won’t tell me which sector will be the first to come outand turn around so maybe look in to etfs.

  9. Ron/BC Says:

    This is for all those former fat cats that became “over exuberant” in the last few years. Selloffs like this are needed bring people back to earth…..

    https://www.youtube.com/watch?v=h-KDSxqJ_0o

  10. tony Says:

    Wayne,

    Not to oily in this market,

    got a friend who can predict recessions, during the holidays he told me we were close to moving into a recession, I was a bit skeptical of his saying but I must admit he was spot on,

    I can only say when my indicators turn that I have to make a deal.

  11. Wayne Says:

    Ron/BC
    Good one Ron.
    Here’s one that certainly describes the moment.

    https://www.youtube.com/watch?v=j4SRsGn14PI

  12. dan Says:

    Ron/BC

    I have a friend who sold everything in September 2011.
    He thought a great recession was coming as in 2008.
    And it’s been in cash ever since.
    The problem is that in 2011 S&P 500 was 1250 and now after 25 % correction it is 2500.
    Now he laughs and it’s exuberant: I told you so .
    He think he is the smartest person in the world .
    And we laugh too .

  13. Wayne Says:

    Tony,
    Tread lightly, my friend. Stick to your strategy.

    I met a fellow at a trading forum who took a simple approach to trading.
    He would buy when the name rose above a 20 day EMA – sell when it broke down below the 10 EMA.
    He was 91 years old!!! Simple worked for him.

  14. tony Says:

    Wayne,

    I’m no daredevil, in the last few weeks I moved out of the market and wqas 100 in cash. just putting about 10 o 15% of it to work.

    If I was more inclined with options. I would by a call and put an insurance on that call just in case I had to buy that call.

    When i’ll see the market make its turn on my parameters you could bet I would put most of it in.

  15. Wayne Says:

    Toni,
    I have a list of US stocks that I am tracking.
    I plan on buying slightly in the money LEAPS – possibly 2 years out. Minimize my risk. If possible, write calls against the positions to bring down my cost.
    Same strategy from early 2019.

  16. Ron/BC Says:

    Wayne

    Yes that was a great movie. So true too with all the hot shots that thought they had all the answers. The market always sucks them in ad then trashes them. Arrogance is always a costly trait. Trouble with charts is the higher it goes makes previous sell offs look small. Even now with this record sell off price has only come down to it’s long term uptrendline. That’s usually considered a good thing and an opportunity. Oink,oink, lol.

  17. Canuck2004 Says:

    Nice panic market….been buying stocks and ETFs all week….and I’m not talking toilet paper like I see down here in AZ….none to be had for some reason…crazy run on TP everywhere….lol…I guess you’ll need it if you get the flu. Shelves everywhere are bare…..

    My brother in law went to 100% cash about 5 years ago expecting a Great Recession, he says we was waiting for the nest BIG recession to buy…..he missed the Dec 2016 dip, 2018 dip and I would bet big time he is probably way too scared to be buying this week. Missed it again!

    As Ron Meizel used to say on BNN “only two kinds of people buy at the bottom, the lucky and the liars”… just got to suck it up and buy in this turmoil. Collar your fear. Won’t get the bottom, but at least you know your not buying at the top….lol…I mean BMO with a 7% yield? jeez if this isn’t a great long term buy I don’t know what is.

    Very big down day today on big volume taking TSX down to 30% correction territory or so overall. I think that’s enough. Soon we will see a reversal….I expect Feds to restart QE, there’s rumours about it anyway….maybe stock buybacks to keep the market liquid. Interest rate cut not enough to help this panic, like pushing on a string….no ammo left.

    The Fed meet next week so we will see. Market starved to reassurance and guidance. Somebody has to step up to the plate soon.

  18. Ron/BC Says:

    Will likely never see this again…..But then again never say never……..

    https://money.cnn.com/data/fear-and-greed/

  19. Canuck2004 Says:

    By the way, I forgot to mention….after more than 40 years in the markets, to me this market panic feels more like a Bull Market correction….which can drop very quickly, move forward briskly in a matter of days and drop very very deep.

    The Bull market correction tend to move fast…and then reverse just as quickly….this drop feels more like 1987, which I remember well as I was buying in the thick of it back then. 6 months later we were back in the pink….and I more than doubled my money… recession didn’t hit until early 90s.

    We haven’t seen any major market correction since 2008, 12 years…so is to be expected…just minor bumps along the way…not normal. As old trader used to say: “trees don’t grow to the sky”….there’s a limit to upside….the market must consolidate.

    In opposite, Bear markets tend to move slow, very very slow…. grinding painfully lower and lower each and every day every day, like Chinese water torture….until one day after several months people can’t take it anymore and we get a big wash out capitulation sell. This is not it.

    I could be wrong, but have seen enough of these to get the feel of it, technicals aside.

    No real fundamentals for this event either, at least not yet. Just panic.

  20. Canuck2004 Says:

    Ron/BC

    Take look at this extreme folly….below 1%…..lol

    https://stockcharts.com/h-sc/ui?s=%24TSXA50R&p=D&b=5&g=0&id=p43885992302

  21. Wayne Says:

    Canuck 2004,
    Good to hear from you!
    On BNN Market call today, Norman Levine said that a few more 1,000 pt down days and we will be certainly bottoming out – at ZERO!!!!
    I remember 1987. It formed a “V” bottom and roared back up.
    All we need is to have a lab announce that they have found a cure for the virus and that they can produce the antidote within weeks. The market would rocket back up. Maybe…..

  22. Ron/BC Says:

    Canuck2004

    Yes it can’t get much worse technically. I have to wonder what should have the biggest bounce back. So many markets at support levels. Even the $SPX has just come back to its uptrendline from 2009. Can’t help but feel like a kid in a candy store………………

  23. Canuck2004 Says:

    Extraordinary Popular Delusions and the Madness of Crowds is an early study of crowd psychology by Scottish journalist Charles Mackay, first published in 1841.

    The book remains in print, and writers continue to discuss its influence, particularly the section on financial bubbles.

    https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds

    A classic to be read by all investors. Only need to read the first 3 chapters to get the idea. As applicable today, especially this day in 2020, as it was then. Humans are humans and subject to irrational folly.

    Famous quote:

    “Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”

  24. Wayne Says:

    Canuck 2004,
    You have referenced this book before.
    I was about to post an observation that referred to this book.

    Technical/fundamental analysis has no place in this market turmoil. Herd instinct, fear and panic overwhelm all other considerations. I was listening to a podcast tonight where the moderator suggested that we have another 50% to go before we see a possible bottom. The raw fear of the herd is driving this market lower. A classic example of Mackay’s thesis.

  25. Paul Says:

    Canuck & Ron et al,
    Bought some BNS and TD today and am fortunate to still be ~1/2 cash. Besides the big banks, could you share any other ideas/names that are looking compelling ? Thanks and Best to everyone here and your familes for the coming months.

  26. Ron/BC Says:

    Paul
    I’ve spent my adult life ‘trading’ stocks not marrying them. Did the same thing with speculative real estate and never rented them out but renovated and sold them asap. Just the way I’m wired it seems. Being retired and having bunches of cash in different accounts and with very low interest rates I do plan on ‘investing’ some money in some ETFs. The $SPX type ETFs on the $TSX and NYSE to me are a well balanced type of investment but the Canadian banking stocks inspite of low interest rates are still a good bet over all and have a good track record. The ETF that has a bunch of the Canadian banks in it is ZEB.to so that would be a good choice. But while a low of some sort is likely at hand on many stocks or close by that doesn’t mean the selloff is over. I would want to see ZEB.to re-clear $21 to have confidence in a reversal soon. Could have a dead cat bounce in the markets and then a further selloff. The virus caused shut down of most sports and other events is a multi billion dollar hit to the economy world wide and will have serious repercussions if not a recession. If you are a long term investor it likely wont’ make much difference if you are early picking up some banks and broad market ETFs. One could just take a partial position in them until a clear uptrend is in place. Everyone is different so the risk level is a personal thing. And I wouldn’t want to see the XSP.to break below the Dec/18 low of $25.79 either as that would be very bearish.

    https://stockcharts.com/h-sc/ui?s=ZEB.TO&p=W&yr=7&mn=0&dy=0&id=p51803821854&a=674490796

    https://stockcharts.com/h-sc/ui?s=XSP.TO&p=D&yr=4&mn=0&dy=0&id=p40301574825&a=673066198

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