Tech Talk for Tuesday March 24th 2020

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Pre-opening Comments for Tuesday March 24th

U.S. equity index futures were higher this morning. S&P 500 futures were up 94 points in pre-opening trade. Investors are anticipating passage of a bi-partisan economic relief package by the Senate today.

Gold jumped $102.80 to U.S. $1,670.40 per ounce after Goldman Sachs noted that it is “Time to Buy Gold

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Magna International (MG $35.31) is expected to open higher after KeyBanc Capital upgraded the stock from Sector Perform to Overweight.

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Coca Cola added $2.24 to $39.80 despite a target reduction by SunTrust RH from $65 to $55.

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Pepsico gained $5.06 to 110.24 despite a target reduction by SunTrust RH from $135 to $115.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/03/23/stock-market-outlook-for-march-24-2020/

 

StockTwits released yesterday @EquityClock

Eli Lilly $LLY an S&P 100 stock moved below $121.50 setting an intermediate downtrend.

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Josef Schachter on BNNBloomberg’s Market Call

Looking for an update on the Canadian energy sector? Josef is the analyst on Market Call today at Noon.

 

Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for March 23rd 2020

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Green: Increase from previous day

Red: Decrease from previous day

Commodities

Seasonal/Technical Commodities Trends for March 23rd 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for March 20th 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 was unchanged yesterday at 1.20. It remains deeply intermediate oversold, but has yet to show significant technical signs of bottoming.

 

TSX Momentum Barometer

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The Barometer added 0.87 to 1.30 yesterday. It remains deeply intermediate oversold, but has yet to show significant technical signs of bottoming.

 

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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10 Responses to “Tech Talk for Tuesday March 24th 2020”

  1. Canuck2004 Says:

    The VIX also known as the FEAR index seemed to have peaked….meaning the fever has broken…more than likely. In a nutshell: Low VIX = up markets; high VIX = down markets.

    Quotes from Bloomberg article posted below:

    “Record-setting levels of market fear aren’t easily sustained, and the drop in volatility expectations signals the most frenzied days of selling may be behind us.”

    [..]

    “I think we’ve broken the back of the VIX fever,” said Michael Purves…”

    [..]

    “One broad factor at play is that it’s simply difficult for volatility to linger at extreme levels for a prolonged stretch, according to Pravit Chintawongvanich, Wells Fargo’s equity derivatives strategist.

    “Even in 2008, the VIX was able to sustain only six trading days above 70 (so far this year, we’ve had five),” he writes. “Regardless of if stocks continue to grind lower or rebound, there is room for the VIX curve to normalize further.””

    Read article below, don’t bother with the video. See my attached chart posted below article post. On VIX chart: Note the RSI was at 70 overbought is now trending lower; Full stochastic (momentum Indicator) peaked, rolling over and forming a “death cross”, meaning trending lower; MACD a lagging indicator was overbought over 80, trending lower; and note the topping action, several days without making new high, starting to roll over. All Bullish indicators.

    Doesn’t mean it can’t reverse itself…if a new Black Swan event occurs or new extreme bad news breaks, however, all things being equal…. I think we’ve seen the worse.

    BLOOMBERG:

    https://www.bloomberg.com/news/articles/2020-03-23/markets-get-weirder-with-stocks-and-volatility-tumbling-together?srnd=markets-vp

    Markets Get Weirder With Stocks and Volatility Tumbling Together – Bloomberg
    The stock market and volatility are in the midst of an unprecedented synchronized swoon.The S&P 500 Index has fallen more than 7% over the past two sessions while the Cboe Volatility Index, a …
    http://www.bloomberg.com

    VIX CHART:

    https://stockcharts.com/h-sc/ui?s=%24VIX&p=D&b=5&g=0&id=p67899577453

  2. Canuck2004 Says:

    By the way, I forgot to mention that Ross Healy, in one of my previous post said that according to his calculations, support for the S&P500 is twice book, which is around 2175. Very close to that number today. Ross has a long history of being correct in matters pertaining to the BIG picture.

    Also said, if it doesn’t hold at 2175, next support is 1,100; very unlikely in my opinion.

  3. Ron/BC Says:

    Bernie

    I contacted Stockcharts and they don’t have anything on ZTL.ne on the NEO Exchange or ZTL.to anywhere else.

    Nice rally so far in the market that was very oversold and overdue for a bounce…….

  4. Bernie Says:

    Ron/BC,

    Thanks for your help! I find it shocking that Stockcharts knows nothing about the NEO Exchange. Maybe they just couldn’t be bothered. I did a google search and see ZTL and 55 other ETFs are listed there. Every Canadian investment management company has at least one NEO ETF listing. This is NEO’s directory:
    https://www.aequitasneo.com/en/exchange/listings-directory

    and listing for ZTL:
    https://www.aequitasneo.com/en/single-security/ZTL#!/chart

    Thankfully barcharts and morningstar, two of my go to sites, cover every Canadian security including mutual funds. I realize their isn’t a lot of liquidity with ZTL or with several other newish Canadian ETFs to attract traders. I just thought it would be more convenient if stockcharts covered them and other ETFs which some of us are interested in. Sorry for my (non-member) rant.

  5. Canuck2004 Says:

    Looks like the FEAR fever broke, a nice up day as expected. Now we will see if it holds tomorrow….it just has to hold and not make a new low. A couple days holding in here, trading sideways with an upward bias would be ideal….and if this materializes, we will most likely head for the 50% half way point between the last market top and the extreme low point….the classic “dead cat” bounce….

    After that first move, look for a retest of the lows, and if successful….we will be moving much higher with confidence…just like 1987….a classic quick, violent, deep, Bull Market correction. We should be back to normal within 6 months or so.

    Don’t forget, we have had nothing but Bull Market for the past 12 years with only a very few 10-20% corrections during this whole time. Not normal. A whole generation of traders/investors that have never seen a major correction freaked out and sold everything, that’s what we saw.

    Market pundits talk about Stimulus Deals, etc….nothing to do with today’s bounce. This is a classic market extreme oversold reaction….all sellers that were going to sell have sold, and there is a lack of sellers. The FEAR anxiety was unsustainable, one cannot keep going like this…. trader exhaustion, seller fatigue….all purely emotional, fear driven….nothing to do with logic. I have seen this many times before in 40 years of market exposure.

    China back on track, unlocking shut down, S.Korea virus slowing, etc. this is giving markets some guidance as it realizes this is all temporary, a month or two, at the maximum…the market hates uncertainty. The market always looks ahead 6 months, it is a forward looking instrument…..

    A recession is defined as 2 consecutive quarters of negative growth. We will most likely see one quarter, that’s all…In a recession the market will always rebound before we are half way as it is looking towards the recovery…..which were the big gainers today? The Financials, as they always lead the market out of a recession…one cannot have a recovery without the participation of the Financials.

    The market will rebound before the pandemic peaks….as it looks ahead to the recovery.

    We will see later today at tomorrow’s Futures.

  6. Ron/BC Says:

    Bernie

    Yes, Barcharts does cover a lot of markets that Stockcharts does not. Don’t know why Stockcharts wouldn’t do the same. Just wondering why with all the various Bond type ETFs you would want ZTL, as what does it have that the other more popular ones have that interests you? (nice art work by the way)

  7. Bernie Says:

    Ron/BC,
    Mostly a convenience thing with me. I preder to keep all my securities iñ $CAD, always have.

  8. Ron/BC Says:

    Bernie
    Here is the Barchart one year chart of ZTL.NE with a 50ema on it along with the previous price resistance pt line at 62 that was cleared in February. That 62 level needs to hold as support now or price will fall back in the consolidation channel between 56 and 62. I’m sure you know this but just thought I’d try to bring up the chart etc.

    https://www.barchart.com/etfs-funds/quotes/ZTL.NE/technical-chart?plot=BAR&volume=total&data=DO&density=X&pricesOn=1&asPctChange=0&logscale=0&indicators=EXPMA(50);LINE(0,);LINE(0,);DASH(62,);DASH(56,)&sym=ZTL.NE&grid=1&height=500&studyheight=100

  9. Ron/BC Says:

    Re:#8

    I see the chart doesn’t wish to show the horizontal lines at 62 and 56.

  10. Bernie Says:

    Ron/BC,

    Its not a priority for me to flip my TLT into ZTL.NE or my SPLV into ZLU.TO. I’ve held both US tickers since last summer and plan to hold both indefinitely. That said I periodically check to see how they compare to their Canadian equivalents. The Canadians ZTL & ZLU are kicking the US TLT and SPLV’s butts so I sometimes think of changing them up. Then I remind myself that its probably not worth the exercise to switch anyway. The performance differences are probably due to the forex so why waste money on commissions to switch. Plus, here’s that dividend angle again, the American versions pay monthly distributions while the Canadian versions pay quarterly. Not a big deal but I do do monthly withdrawals from my RRIF. Thanks for the barchart chart. I like Morningstar’s interactive charts too. There one can compare several tickers on the same price chart and customize the date range. Canadian mutual funds are covered too. The only drawback is the limited technical features one can employ.

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