Tech Talk for Thursday May 14th 2020

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Pre-opening Comments for Thursday May 14th

U.S. equity index futures were lower this morning. S&P 500 futures were down 20 points in pre-opening trade.

Index futures were virtually unchanged following release of Weekly Initial Jobless Claims at 8:30 AM EDT. Consensus was 2.7 million versus 3.169 million last week. Actual was 2.980 million

Cisco gained $0.94 to $42.89 after reporting higher than consensus fiscal third quarter earnings. The company also raised fiscal fourth quarter guidance.

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Hertz dropped $0.20 to $2.56 after Deutsche Bank lowered its target price from $9 to $3.

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MMM slipped $0.62 to $135.50 after reporting an 11% drop in April sales.

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McCormick added $1.48 to $170.00 after Credit Suisse upgraded the stock from Neutral to Outperform.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/05/13/stock-market-outlook-for-may-14-2020/

Note seasonality chart on Crude Oil Days of Supply.

 

Technical Notes

General Electric (GE), an S&P 100 stock moved below $5.90 extending an intermediate downtrend.

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NetEase.com (NTES), a NASDAQ 100 stock moved above $367.52 to an all-time high extending an intermediate uptrend.

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Walgreen Boots (WBA), a Dow Jones Industrial stock moved below $39.40 extending an intermediate downtrend.

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Natural Gas ETN (UNG) moved below $11.53 extending an intermediate downtrend.

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U.S. Bank stocks and related ETFs (KBE, KRE) came under significant technical pressure following Federal Reserve Chairman Powell’s cautious comments yesterday.

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Trader’s Corner

 

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for May 13th 2020

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Green: Increase from previous day

Red: Decrease from previous day

Commodities

Seasonal/Technical Commodities Trends for May 13th 2020

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Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for May 13th 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Greg Schnell’s “Market Buzz”

Greg notes, “Banks dial 911”. Following is a link:

https://www.youtube.com/watch?v=ls4qg_1JxyQ&feature=youtu.be

 

S&P 500 Momentum Barometer

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The Barometer plunged 9.02 to 52.71 yesterday. It changed from intermediate overbought to intermediate neutral on a drop below 60.00 and has started to trend down.

 

TSX Momentum Barometer

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The Barometer plunged 12.50 to 56.25 yesterday. It changed from intermediate overbought to intermediate neutral on a move below 60.00 and has started to trend down.

 

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 Thursday May 14th 2020”

  1. bruce Says:

    the AAII survey for the may 13th week shows the public still quite bearish…..50.6% down 2.0 and the bulls just 26.1% up 2.4………..

  2. Paula Says:

    Ron/BC
    Re your #15 yesterday. To answer your question, SPY currently has a dividend of ~ 2% USD, on which there would be with holding tax, unless in a RRSP. For comparison, the current yield on ZEB.TO is ~ 5.4% CAD, so more than double even if it is Canadian dollars. Plus, if in a non-registered account, you get the dividend tax credit, which means that you will pay a lot less tax than what you would pay on the same amount of interest income. Here is a recent article:

    https://www.tsinetwork.ca/daily-advice/dividend-stocks/dividends-taxed-canada-heres-close-look-dividend-tax-credit/

  3. Ana Says:

    Inverted head and shoulder pattern taking us up in $SPX today and tomorrow, let us see where this takes us.

  4. Ron/BC Says:

    Paula

    Thanks for the link. I do understand it better than before. I’ve always left my taxes to my accountant. He used to be very creative but has retired now. His replacement is ok though and she can answer questions quickly. But I don’t really care for these percent numbers where the payout can change with a changing stock price. It seems like a bait and switch type of thing. Plus there’s always the risk of a sudden broad market selloff like we’ve just had. No security for that either. I guess I prefer to get exceptional value with my money when buying things and that keeps it all simple. I’m not fond of complicated formulas that can change in a heartbeat. Like the old saying goes,”Better paranoid than naive.” But I should sit down with a savvy tax consultant and go over the pitfalls and advantages of taxes etc.

  5. Mary Says:

    Ron/BC

    FWIW….However, you make your money whether by taking risk or being conservative, you should take your tax into consideration. That’s how the rich gets richer. What Paula is saying makes sense.

  6. Mary Says:

    Ana:

    I know some of you don’t care to hear about Jim Kramer but yesterday he said the market will go up today in the afternoon.

  7. Ron/BC Says:

    Mary

    My accountant always looked after things for 35 years and was very creative with income and expenses. I don’t work anymore as I closed my business 10 years ago so it isn’t as important as it once was. When self employed your accountant can do a lot of things with your income and expenses. Most of my money now is in a RRIF and in U.S.$. Plus my condo is paid off. So not sure what I should do next but do keep my eyes open for value. Another condo that’s good value would be ok as long as the updates or renovation isn’t extreme. But I am convinced everyone should have a “good” accountant even if they can do their own taxes. Most people I know do their own taxes to save a few bucks but miss out on a lot of things they could be doing to save far more than the small amount an accountant charges.

  8. Ron/BC Says:

    Here is a chart of RSP, the equal weight S&P500. The above ratio chart show RSP relative to SPY which is the S&P500 ETF. It shows the RSP underperforming the SPY quite dramatically since mid February and lately has been getting even worse. Not a good sign. In December 2018 the S&P500 sold off sharply but the equal weighted RSP held up well and outperformed the SPY. Big difference this time with the RSP which is a more balanced equal weighted group of stocks selling off far worse than the weighted SPY.

    https://stockcharts.com/h-sc/ui?s=RSP&p=D&yr=1&mn=0&dy=0&id=p66615577816&a=754206870

  9. Bernie Says:

    David Burrows’ take on the markets and 3 top picks per today’s appearance on Marketcall is shown below. I don’t necessarily agree with his assessments but I respect the guy. Just being the messenger here:

    “David Burrows’ Top Picks: Amazon, Newmont and Nvidia
    BNN Bloomberg
    MARKET OUTLOOK
    Our view remains that we are in a long-term structural bull market. Equity markets will have a lot to churn through here as we reopen the global economy. At this point, the rally off of March lows has discounted a lot. Much has changed over the last few months, from consumer trends to the way business is conducted. As such, we favour large-cap ideas exposed to industries and themes that benefit from these changes. Equity markets sit bifurcated with the world looking better post-COVID than it did pre-COVID for some sectors, while some sectors, specifically financials and industrials, remain challenged.”

  10. Vivek Says:

    Dave Burrows results aren’t that great. https://barometercapital.ca/private-pools_/

  11. Larry/ON Says:

    Re 9 – You don’t need Burrows when you have his disciple Larry/ON. I’ve been promoting AMZN and NVDA right here. The single most important thing everyone can do is stop investing like it is the 1980’s (Banks, REITS, Commodities, Utilities, Manufacturing industry, etc.) It’s 2020. Technology is transforming society and investors need to invest in companies that involved in that transformation. A few old folks will shake their canes and complain about the Dot-Com crash. If that’s what holds people back together with an a fixation on P/E ratios without regard to growth it will be very difficult to succeed in investing in the 2020s. Bottom fishing in unfavourable sectors is a much much more difficult exercise than simply holding what is going in the correct direction which obviously is up. You will get short covering which will exhaust itself and those sectors will resume downward and Burrows mentions this.
    Re 6 – Ignore Cramer at your peril. The best source of information I have is Burrows and Cramer. Those are the two I follow and I’m not going to invest in everything they promote but they confirm the selected bets that I make.

  12. Ana Says:

    #6. Mary,

    Thank you for this information, I like to hear everything about the market. Did Jim Crammer mention why he thought the market would go up today. Did he say anything about tomorrow?

    I had to leave trading at noon yesterday for an appointment, so I left a short position of the $SPX overnight. I returned to day trading during today. The Banks did well today, as did oil.

    Good luck in your trading, Mary!

  13. Rol Lew Says:

    The Bard knew all about technical analysis…. who would have thunk that?

    “”Brutus:
    There is a tide in the affairs of men.
    Which, taken at the flood, leads on to fortune;
    Omitted, all the voyage of their life
    Is bound in shallows and in miseries.
    On such a full sea are we now afloat,
    And we must take the current when it serves,
    Or lose our ventures.

    Julius Caesar Act 4, scene 3, 218–224 “”

    I raise this in the context of David Burrows’ past picks, vs the dismal past performance on the barometer capital web site.

    https://stockchase.com/expert/view/83/sort/date/page/3/direction/desc/max/15

    https://barometercapital.ca/private-pools_/

  14. Rol Lew Says:

    black gold

    https://stockcharts.com/freecharts/candleglance.html?CNQ.TO,TOU.TO,BNE.TO,SU.TO,VLO,CVI,BPT,CVE.TO,HFC,PBF,LBRT,DK|D|0

    yellow gold

    https://stockcharts.com/freecharts/candleglance.html?GLD,SLV,SIVR,KL.TO,UGLD,BTG,AEM,GOLD,NEM,AUY,AUY,SIL|D|0

    kramer’s covid index (exclude UPWK)

    https://stockcharts.com/freecharts/candleglance.html?lvgo,sq,pton,bynd,coup,evbg,net,masi,mrna,dxcm,upwk|D|0

  15. Jason Says:

    #10, 13. How does one “lose” money Over 5 years like Dave Burrows and get on BNN? Braver soul than me, I’d be on the next flight to palookaville!! https://barometercapital.ca/private-pools_/

  16. Larry/ON Says:

    Re 14 and 15. I really don’t care if Barometer’s clients make or lose money. What I do is view Burrows analysis of the markets and themes that are working. He uses a lot of historical data going back decades to explain what is happening in the market. I pick my own stocks and the ones I pick happen to fall in the same basket that both Burrows and Cramer use. Burrows is a macro analyst and you have to watch his video’s to see the logic. As for Jim Cramer he is a genius and his last name begins with a C.
    Re 14 – Black gold? Those are terrible stocks. Yellow gold – That’s different and one of Burrows’ picks today was NEM. Gold has always been a hedge against risk and inflation but it can crash.
    Cramer’s Covid Index looks pretty good on those one month charts you put up. I gravitate towards the sure thing which is mega cap tech. The smaller names will be more volatile.

  17. Bernie Says:

    Ron/BC,

    You seem to favour the broad US market ETFs in $USD. Take a look at Vanguard Dividend Appreciation ETF (VIG). It has delivered higher returns with lower risk than SPY over the past 5 years. Its 182 holdings are comprised of S&P500 companies which have increased their dividend payouts for 25 consecutive years or more.

    I concur with your suggestion of having an accountant do your taxes. I always did my own taxes until last year when I was unable to because I had to leave home unexpectedly and not return for a couple of months. Anyway I asked my wife to have an accounting firm do them for us in my absence. End-all the accountant saved me a lot of dough. Had I done them myself I would have had to pay about $2,200. Thanks to the accountant’s familiarity with income splitting I only had to pay $1,200. Yesterday I looked at last years returns to try and figure out how to apply income splitting to this years returns. Needless to say all I gained from my 3 1/2 hour ordeal was a headache and a melted brain. lol. Yes sir, I’m going back to the accountant.

  18. Bernie Says:

    I don’t always agree with David Burrows top picks but I really do like his view of the markets. He’s definitely no Jason Donville. JD had a great run but hasn’t been on air in 4 years. I just had a peak at his firm’s flagship mutual fund “DKAM Capital ideas fund LP” performance. The fund’s annualized TR from inception on Oct 1, 2008 to Apr 30, 2020 is an outstanding 14.8% vs the S&P500’s 10.5%. That is a remarkable outperform of 4% annually. JD still has it!

  19. Mary Says:

    Ana:

    I just heard Jim Cramer said, its sort of a pattern, * the market sells off 3 days then they start buying in the afternoon”. “They” may mean you and I and everyone on this board as well as the tourist. Today he was looking at the VIX. It seems like the spike dissipate somewhat he said.

    Larry/ON

    Maybe you could add Cannabis stocks in the new economy together with AMZN and NVDA. Wait for it!

  20. Ron/BC Says:

    Bernie

    Thanks for the VIG suggestion. I’ll pay attention to it. Long ago I preferred expensive stocks and ETFs as just a bounce would make good money. But the beauty of using an Accountant is whatever he comes up with is his doing as what do I know for sure,lol. He puts his stamp on it all.”Prepared without audit” mind you. And I’ve always been amazed at how creative they can be. Who knew there was so many ways to categorize income. Or how many things could be a deduction. Lets not forget the home office expenses. They can really be expensive. I did income splitting too until my wife went back to work when the kids were in their early teens. Then she wasn’t interested in putting my income on her income.

    Here is VIG. Odd technicals but good volume and seems to trade actively and much like the others.

    https://stockcharts.com/h-sc/ui?s=VIG&p=D&yr=2&mn=0&dy=0&id=p72017015536&a=754394661

  21. Ana Says:

    #19. Mary,

    Thank you for that information, Mary. I am doing yard work so I do not like watching television when I can be outside in the fresh air.

  22. Ana Says:

    Can not stop myself from posting these patterns. Thinking this was a back check on the shoulder line. However as usual, these patterns have not been working out. So this is for your entertainment purposes only.

    On the other hand, if this works out, yahoo! (Cheerleading)

    https://invst.ly/qt9lq

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