Tech Talk for Tuesday May 12th 2020

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Pre-opening Comments for Tuesday May 12th

U.S. equity index futures were higher this morning. S&P 500 futures were up 7 points in pre-opening trade. Index futures responded to news that the Federal Reserve is starting a program to purchase corporate bond Exchange Traded Funds.

Index futures were virtually unchanged following release of the April Consumer Price Index at 8:30 AM EDT. Consensus was a decline of 0.8% versus a drop of 0.4% in March. Actual was down 0.8%. Excluding food and energy, consensus for the April Consumer Price Index was a slip of 0.2% versus a slip of 0.1% in March. Actual was a drop of 0.4%

Apple gained $2.39 to $317.40 after Wedbush raised its target price from $335 to $350.

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Ingersoll-Rand slipped $0.09 to $29.00 after reporting lower than consensus first quarter earnings.

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Alphabet added $5.00 to $1408.59 after Citigroup raised its target price from $1400 to $1600.

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Lowes Company gained $1.36 to $114.75 after Wells Fargo raised its target price from $110 to $130.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/05/11/stock-market-outlook-for-may-12-2020/

Technical Comments

Citrix Systems (CTXS), a NASDAQ 100 stock moved above $152.49 to an all-time high extending an intermediate uptrend.

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NVIDIA (NVDA), a NASDAQ 100 stock moved above $316.13 to an all-time high extending an intermediate uptrend.

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First Trust Biotech ETF (FBT) moved above $159.85 to an all-time high extending an intermediate uptrend.

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Editor’s Note: Other biotech ETFs to reach all-time highs included IBB and BBH.

Brookfield Infrastructure Partners (BIP/UN), a TSX 60 stock moved above $58.67 resuming an intermediate uptrend

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Alimentation Couche Tard (ATD.B), a TSX 60 stock moved above $40.97 resuming an intermediate uptrend.

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American International Group (AIG), an S&P 100 stock moved above $27.75 resuming an intermediate uptrend.

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Lumber prices moved above $357.80 setting an intermediate uptrend.

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Trader’s Corner

 

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for May 11th 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Seasonal/Technical Commodities Trends for May 11th 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for May 11th 2020

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Green: Increase from previous day

Red: Decrease from previous day

Technical Scoop

Thank you to David Chapman and www.EnrichedInvesting for a link to David’s weekly comment. Headline reads,”Great disconnect, trillions thrown, Main devastation, happy Wall, golden projection”. Following is the link:

http://enrichedinvesting.com/wp-content/uploads/2020/05/Great-disconnect-trillions-thrown-Main-devastation-happy-Wall-golden-projection.pdf

 

S&P 500 Barometer

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The Barometer dropped 6.41 to 69.54 yesterday. It remains intermediate overbought.

 

TSX Barometer

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The Barometer gained another 1.79 to 74.11 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

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22 Responses to “Tech Talk for Tuesday May 12th 2020”

  1. Larry/ON Says:

    SOXX – Pull up you SOXX! From around April 18th semis were in distribution until a week ago when the accumulation/distribution line bottomed in line with the late February low. They have since started to trade in accumulation. There is a resistance point at 244.63 on SOXX which if cleared paves the way for the semi-index to test the mid-February all-time high. SPX is also meeting resistance at 2955. There is a bit of a struggle here. The usual pattern is for tech to lead. The first indication within SOXX was the new all-time high by NVDA.

  2. Larry/ON Says:

    REITS – How bad are they? Tried to place a short order on XRE – No inventory at my brokerage.

    https://www.cnbc.com/2020/05/12/cramer-sees-tremendous-tall-office-buildings-with-nobody-in-them.html

  3. Ron/BC Says:

    Bernie
    I was looking over your posts of May 8th and while I don’t really understand it all I was thinking the recent selloff can continue due to a rare event like the Pandemic with all kinds of unique consequences. Therefore do you really think it’s a good idea to change your original game plan other than exit where possible and wait for the fog to clear before selectively reinvesting again with more normal economics? And who knows what that will look like. I don’t see much of anything being normal now and corporations will be wheeling and dealing and trying to survive and capitalize where possible including with their taxes. I don’t see how any price is relative to their business income now. I have to wonder if stocks and ETFs that have outperformed in this pandemic shouldn’t be the better picks in the future as well. You mentioned ZUT.to and a variety of other Utilities which aren’t as dependent on business.

  4. Ron/BC Says:

    Well the XLK Technology ETF has come storming back and has outperformed the SPY also.

    https://stockcharts.com/h-sc/ui?s=XLK&p=D&yr=0&mn=8&dy=0&id=p43947040516&a=673066156

  5. Paula Says:

    I have been hearing a few former bears turn bullish recently. Here Patrick Horan who is in that category. Hope I have the correct link:
    https://www.bnnbloomberg.ca/investing/video/new-bull-market-is-forming-in-stocks-agilith-capital-s-patrick-horan~1957093

    Here is Mike Wilson of Morgan Stanley, a former bear:
    https://www.cnbc.com/video/2020/04/07/stocks-appear-at-the-end-of-a-bear-market-says-morgan-stanleys-mike-wilson.html

    Was it Buffet or Templeton or someone else who said to buy when others are fearful? Or was that when there was blood in the streets?

  6. Bruce Says:

    Paula
    Baron Rothschild when given a message about a war said to buy when there is blood in the streets…..I believe it was John templeton who said to buy when others are fearful…..

  7. Bruce Says:

    Paula
    Baron Rothschild said buy when there is blood in the streets and buffet said buy when others are fearful…..

  8. Ron/BC Says:

    Paula

    Buffet said “be fearful when others are greedy and to be greedy only when others are fearful”. And it was Baron Rothschild who said to “buy when there is blood in the streets.”

    Buying when the 200ema and Fib 61.8% are cleared are the only things that make sense now.

  9. Ron/BC Says:

    Jesse Livermore, the famed stock trader of the 1920s and 1930s, who compiled a huge fortune on four separate occasions, and each time ended up losing it all and declaring bankruptcy.

    Jesse livermore
    Suicide. On November 28, 1940, just after 5:30 pm, Livermore fatally shot himself with an Automatic Colt Pistol in the cloakroom of The Sherry-Netherland hotel in Manhattan, where he usually had cocktails.

  10. Bruce Says:

    Ron
    And some great books very readable about the life of Jesse Livermore..

  11. tony Says:

    This week will be a volatile week with monthly options expiring

  12. Ron/BC Says:

    Bruce

    I read that the major reason Jesse Livermore made lots of money was the way the market was structured with “pools” of some sort which gave some a distinct advantage for those that knew how to use them. Once the government closed those loopholes he was like everyone else and just couldn’t make the big bucks anymore. And he shot himself. Obviously there’s more to the story but that’s the jist of it from what I understand.

  13. Larry/ON Says:

    SOXX – Bearish engulfing bar.

  14. Larry/ON Says:

    QQQ – Also Bearish Engulfing Bar.

  15. Larry/ON Says:

    SPX went off a cliff. Headed down to 2800 to 2725 shortly IMO.

  16. bruce Says:

    Ron Paula
    livermore also said his big money was made by sitting not trading………..he said never argue with the tape, markets are never wrong, opinions are……my favourite, the market is designed to fool most of the people most of the time……..

  17. Paula Says:

    Bruce, Ron/BC
    Thanks for clarifying who said what. I will try to keep it straight. Years ago I read Livermore’s book: “How to Trade in Stocks” and still have it. I remember, on this site, referring to how he said he made most of his money by sitting and not trading and you (Ron) said something like; don’t use him as an example to follow, since he committed suicide.

  18. Ron/BC Says:

    Paula

    You have a good memory. See post #12.

  19. Ron/BC Says:

    Paula

    That doesn’t mean Livermore didn’t have some great trading skills. Just like Joe Granville. I used to follow his work and subscribed to his newsletter. I used his On Balance Volume all the time and it did work. But apparently he did relatively poor as well overall in the end. The market is like a rattle snake and will bite everyone in the ass given the chance and when they least expect it. This market had gone years without a major selloff that really trashed everyone and it was just over due for a major selloff. This time it was a virus. Other times it was a recession or high interest rates or a trade war. Always going to be something. In fact in poor economic times major governments tend to start a war with someone so the general public becomes patriotic and have an enemy abroad to focus their anger on. It works great.

  20. Paula Says:

    Ron/BC
    Yes, they made a movie about that (substitute poor economic times with sex scandal) – “In fact in poor economic times major governments tend to start a war with someone so the general public becomes patriotic and have an enemy abroad to focus their anger on. It works great.”

    https://www.google.com/search?client=firefox-b-d&q=movie+wag+the+dog

  21. bruce Says:

    Ron Paula
    A lot of what you say in 19 and 20 is what Trump has done…..using the Fed and Jay Powell to blame if the economy weakened and now using China for not warning of the virus sooner….the market will do whatever it wants to do without any reason but the media always like to find something to feed to the public….to-day they seem to be floundering as to why we sold off…..

  22. Bernie Says:

    Ron/BC,

    Re: #3

    My original game plan had too much high yield content. I think its a good idea to get rid of these as they underperformed in all down periods since I added them. They weren’t giving me any dividend growth anyway and they’d likely be the first dividend causalities. I’ve been lucky to avoid dividend cuts so far. As for the other holdings in my proposed lineup I already own all but 2 of the equities. There will be substantially more quality and dividend growth in the new streamlined mix, 16 of the 20 are dividend growers. They only thing I regret about unloading the underperformers is locking in the capital loss. I hadn’t planned on deploying the cash from the sales until at least midsummer so I’ll be sitting on a lot of cash until then. Like you and many others I expect the market slide to return. This will lead to more favourable buying opportunities down the road.

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