Tech Talk for Friday May 22nd 2020

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Pre-opening Comments for Friday May 22nd

U.S. equity index futures were higher this morning. S&P 500 futures were up 3 points in pre-opening trade.

The Canadian Dollar was virtually unchanged at US 71.37 cents following release of the March Canadian Retail Sales report at 8:30 AM EDT. Consensus was a fall of 10.5% versus a gain of 0.3% in February. Actual was a drop of 10.0%

Deere gained $5.18 to $147.99 after reporting higher than consensus fiscal second quarter sales and earnings.

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Hewlett Packard Enterprises slipped $0.63 to$9.73 after reporting lower than consensus fiscal second quarter sales and earnings. Raymond James downgraded the stock from Outperform to Market Perform.

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NVIDIA gained $5.92 to $356.93 after reporting higher than consensus first quarter revenues and earnings. Target price on the stock was raised by Benchmark, Wedbush, Raymond James and Mizuho.

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Agilent advanced $3.48 to $84.23 after reporting higher than consensus fiscal second quarter revenues and earnings.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/05/21/stock-market-outlook-for-may-22-2020/

Note seasonality charts on Existing Home Sales and Natural Gas Storage.

Next Tech Talk Report

It will be available on Monday despite the U.S. Memorial Day holiday in the U.S.

 

Technical Notes

Starbucks (SBUX), an S&P 100 stock moved above $$78.72 resuming an intermediate uptrend.

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Eli Lilly (LLY), an S&P 100 stock moved below $150.55 completing a double top pattern.

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Lululemon Athletica (LULU, a NASDAQ 100 stock moved above $266.20 to an all-time high extending an intermediate uptrend.

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for May 21st 2020

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Green: Increase from previous day

Red: Decrease from previous day

Commodities

Seasonal/Technical Commodities Trends for May 21st 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for May 21st 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 slipped 0.40 to 81.75 yesterday. It remains intermediate overbought.

 

TSX Momentum Barometer

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The Barometer added 1.79 to 79.46 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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45 Responses to “Tech Talk for Friday May 22nd 2020”

  1. Bman/BC Says:

    Ron/BC

    Thanks for your comments yesterday. As you mentioned, it’s not clear what path we are looking at as there is both bullish and bearish potential. We will all need to find other things to keep ourselves busy till the market makes up its mind. Would prefer for another drop to retest the lows and reconfirm the bottom is in given the seasons and at their weakest.

  2. Paula Says:

    Mary, re your #10 yesterday. You are fighting the trend with JDST. I get it, if you are right you will make a lot of money but with these leveraged ETFs, if you are on the wrong side, you will lose big. Just a friendly warning…

  3. Mary Says:

    Paula

    Thank you. What I think and see is not working out. Should have waited a little longer for the direction to confirm because I understand you cannot hold these products for too long. So far I am OK but MAY exit the trade.

  4. bobj Says:

    Just another interesting comment.
    https://www.businessinsider.com/perfect-storm-of-stupid-in-stock-market-right-now-2020-5thank you for all the postings.

  5. bobj Says:

    let’s try again
    https://www.businessinsider.com/perfect-storm-of-stupid-in-stock-market-right-now-2020-5

  6. Ron/BC Says:

    Mary

    Paula makes a good point that I didn’t. And that is these highly leveraged ETFs lose their value even without the price of the underlying falling or rising. $Gold has been trending up for some time now even with the seasonal trend weak into summer. One could argue there are negative divergences on most oscillators at recent prices but overall the trend is still bullish.

    https://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=12&mn=0&dy=0&id=p40500184425&a=673066441

  7. Mary Says:

    Ron/BC and Paula

    Thanks for the update. Here is an excerpt from an article I just read:

    Let’s compare the performance of both indices as of March 31, 2020:
    •5-year return: JNUG -52.90% and JDST -80.37% (i.e., both returns are negative)
    •3-year return: JNUG -68.8% and JDST -63.7% (i.e., both returns are negative)
    •1-year return: JNUG -92.0% and JDST down -92.8% (i.e., both returns are negative)

    In theory, short-term (possibly day) traders could consider JNUG stock to go long smaller gold miners and JDST to go short.

  8. Mary Says:

    RE #7 – this is so wrong

  9. Bman/BC Says:

    Mary

    RE #7 makes you thinks maybe its a permeant short if the value is always being eroded.

  10. Ron/BC Says:

    Mary

    It seems like both those highly leveraged ETFs were designed for those that live for “THE RUSH” When I had a commodity broker years ago he said most of his clients trade commodities for the rush, not the money. I guess it’s physically healthier than drugs.

  11. bobj Says:

    Ron/BC
    some time past, you posted some interest in AEM,
    other gold comp. up 100 -300% in the last 12 month.
    FNV, NGT, WPM, BTO, YRI, ASR.

  12. Mary Says:

    How can the regulators allow something like this to exist in the markets. Both buyers and sellers lose whether you are long or short. Guess its guaranteed for the house to win. I averaged in at $19.50 approx. so just watching…

  13. Ron/BC Says:

    BobJ

    AEM.to lost 1/2 its value between mid January and March and then more than doubled on a rally straight up again until recently in the same amount of time. That is one hell of a ride.

    https://stockcharts.com/h-sc/ui?s=AEM.TO&p=D&yr=3&mn=0&dy=0&id=p69324202666&a=673066385

  14. Ron/BC Says:

    The broad market RSP Equal Weight S&P is underperforming the $SPX and price has been bumping up against major price resistance for some time now as well. Not a good sign.

    https://stockcharts.com/h-sc/ui?s=RSP&p=D&yr=3&mn=0&dy=0&id=p01092964603&a=753700958

  15. Ron/BC Says:

    Here is a daily chart of SPY ($SPX ETF). I’ve put on the Keltner Channel lines with the standard setting of 2.0 in Orange and the longer setting of 3.0 in Pink to show the difference. There has always been some controversy as to which one is best. I’ve always preferred the longer one as I don’t like to see a line tagged multiple times as the signal isn’t worth much then.

    https://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=1&mn=6&dy=0&id=p89345660849&a=673066097

  16. Bernie Says:

    Ron/BC,

    Your chart in #15 looks very interesting. I don’t recall any posters on here who focus on Keltner Channels for their trend trades since Eve frequented the board many years ago. I would assume the green and red dashed lines on your RSI21 are buy and sell signals. I have an odd request for modifying this chart just to see if it gives more clarity. Could you please add green and red vertical lines to further highlight the buy/sell signals and change your OHLC bars to, I know you hate these, Elder Impulse Bars?

  17. Ron/BC Says:

    Bernie

    I posted the Keltner Channels a few times as Ana uses B.Bands and they both do much the same thing. So I combined them as I thought they could be useful. I used to use them a little as Mick/NV used to use them as well. I started using the higher setting of 2.5 and then 3.0 back then to avoid all the multiple tags on the lines. Here is the chart back with Elder Bars. I did use the Elder Bars as well for awhile but likely got bogged down with too much info on the charts. But they do give a lot more information than just price bars do. I was also going to put on the B.Bands as well but the chart would get very messy.

    https://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=1&mn=6&dy=0&id=p80459434677&a=673066097

  18. Ron/BC Says:

    Bernie
    Here is SPY from the 2009 low with the Elder Bars on. The long term uptrendline is still basically intact. Price did have a lower low than the late 2018 low and has recently had a lower high but it may not be done yet either.

    https://stockcharts.com/h-sc/ui?s=SPY&p=W&yr=12&mn=0&dy=0&id=p45273475402&a=719485838

  19. Ron/BC Says:

    Bernie
    While I’m on a roll here is the Monthly chart of SPY with Elder Bars on it.

    https://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=3&mn=0&dy=0&id=p64057409300&a=758836580

  20. Ana Says:

    If you are swing trading or day trading, be aware of the 2020 Market Holiday for Memorial Day, Monday, May 25, 2020.

    Really busy day trading today, so much work to scrape together a dollars!

    I rototilled a garden yesterday after the market closed and could barely get up today! I thought the rototiller was much lighter last year! LOL

  21. Paula Says:

    Ana, you are getting stronger! In spite of your arm injury. I trust you had a profitable day; we planted a big vegetable garden last weekend but still a few things to get in the ground.
    Lately I have not been doing much on Fridays. My shopping and house/garden day. Friends dropped by for a physically distanced visit outdoor visit in warm weather! A pleasant change in many ways.
    Have a good weekend all!

  22. Paula Says:

    Meant to say I have not been doing much in the market on Fridays.

  23. Ana Says:

    #21. Paula,

    Thank you very much for the encouragement with your compliment! My arm still has some bone to grow but I am very happy that my joints and knuckles are slowly returning to normal. So, I do have to regain some endurance. When I read about Ron/BC going for a 12 mile walk, I am amazed.

    Good job on the garden! I plan to plant the garden tomorrow.

    “To plant a garden is to believe in tomorrow.” Audrey Hepburn

  24. Bernie Says:

    Ron/BC,

    Thanks for the charts. I thought I’d check out those indicators to see if they could be used to determine exit levels for the 11 securities I wish to sell and then for entry levels for my core stocks to add to at a later late. They may yet work for the latter but not for those I’ve decided to sell. My intent was to sell this week. However, these laggards decided to rally a bit this week so I’ll hold a bit longer, at least for 9 of them. Two appear ready to sell now and the other one was sold on Wed.

  25. Ron/BC Says:

    Bernie

    That 300 level on the SPY (see Monthly chart in post #19) has been an important price resistance point since mid 2019. I wouldn’t bet on it being cleared right now. And most stocks do follow the broad market.

  26. Ron/BC Says:

    Here is a one and a half year chart of SPY with Fibonacci numbered EMAs overlaid from 5 though 55. One can see price bumping up against that 300 resistance level just like in mid 2019.

    https://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=1&mn=6&dy=0&id=p52253385480&a=691023604

  27. Bernie Says:

    Ron/BC,

    Re: #25
    I’m in no rush to buy. I wasn’t planning on adding to my existing core holdings until the markets settle out and recover. I’m ok to sit on the cash from my sells.

  28. Ron/BC Says:

    Bernie

    I understand. I love cash myself. I’d even like to sell my condo and turn it back into cash again and just live in a free shack somewhere with a money bin to roll around in. Scrooge was always my hero. Loved his cash swimming pool.

  29. Ron/BC Says:

    Was just looking at Utube to listen to some music when I saw this video that is up to date by Chris Ciovacco that has been mentioned on this site as a good analyst. I haven’t listened to it yet.

    https://www.youtube.com/watch?v=VvLypFCN6oU

  30. Ana Says:

    $SPX

    Thinking down to Line 2 next week:

    https://invst.ly/qwkar

  31. Bernie Says:

    Ron/BC,

    Well I’m not quite THAT crazy about cash lol. But Uncle Scrooge was my favourite too. I bought every comic book with Uncle Scrooge content that I could get my hands on when I was a kid plus a few more in my 20’s which are the only ones that I retain to this day. I also have an Uncle Scrooge Pez dispencer which my kids bought me. As you I rarely hold cash in my investment accounts, I’ve always preferred to be fully invested. I wanted all my money invested in stocks and funds working for me to generate dividend and interest income which I then reinvested to earn even more income. I’ve only held cash in my accounts for a significant period of time last year, ie; 3-4 months. It didn’t feel right to only be earning 1.6% in high interest savings in a bull market when the bear market I expected didn’t matefialize.

  32. Ron/BC Says:

    Bernie

    I’ve never had the confidence in stock dividends etc that you have. I guess I’m just not a believer. I’d rather a bird in the hand rather than two possibles in the bush. And I’ve always been able to get 2% to 4% for cash for years now. Even now I’m making 3% at Tangerine until the end of May. Not sure what I’ll do then but I suspect they’ll come up with something or everyone will pull their money. But if there isn’t anything close to that I just might buy some stock in an uptrend that also pays a dividend so will have time to decide what to do with it. So if I have a six figured amount to put in cash it adds up nicely with no risk. The older I get the less risk I should be taking. So that keeps me in line as I watch many investments go by. Some good and some very bad. I don’t have a strong desire to be ‘invested’ in stocks and never have. Up until about a decade ago all they were good for was trading from point A to point B from what I could see. Even now I’m looking for a capital gains rather than a dividend. I guess that’s just the way I’m hardwired. But lots of ways to skin a cat they say. I just don’t trust the market players. Just look at the month of March. I find it hard to believe that was just a normal pullback in an uptrend that played out.

  33. Ron/BC Says:

    Ana NTR

    I’ve often walked 12KM not 12 miles. But typically I walk about 5km to 10km Daily I guess. I downloaded an app on my cell phone that doesn’t need to be updated so I am surprised at how far I walk most days looking back at the dates. I wouldn’t have believed it if I didn’t have that app. Today was only about 3km. No where to go it seems and didn’t want to stand in line to golf.

  34. Wayne Says:

    Bernie,
    Do you hold any US CEF’s in your portfolio?
    Just have a few questions for you, if you do.
    Thanks!

  35. Paula Says:

    Use of indicators – how good are they?

    Bernie or anyone else who likes to do back testing, have you ever looked at PSAR (Parabolic Stop and Reverse)? On Stockcharts, it is shown as SAR (I use the auto style, which is green dots). I like to use this as a stop, whether on entries or as protection. I don’t sell short, so don’t use it that way. And I combine it with ADX, so don’t take every signal. In addition to moving averages, PSAR and ADX are my favourite indicators. I have tried to simplify my charts but I still like to see SCTR, OBV resistance and support areas and … vs SPY. Note on this weekly chart, the strong bounce and PSAR buy ~ 89 has not been confirmed by green +DI crossing above ADX and ADX turning up. Green +DI did cross above Red –DI which would have coincided with the PSAR buy (orange broken line).

    http://schrts.co/CpqwphXw

    https://www.investopedia.com/terms/p/parabolicindicator.asp

  36. Ron/BC Says:

    Has anyone else noticed how agitated drivers on the road are lately? I sure see and hear a lot of honking etc on the road. I don’t consider myself hard to get along with as a rule but did flip out on some lady that honked her horn at me. She had come off a highway that curved into a major set of lanes into the city just as I had pulled out of a Plaza so I wasn’t going too fast. She honked her horn at me and then pulled up beside me and then in front of me and turned and swore at me. She’s very lucky I didn’t have my old van with thick metal bumpers or I would have rammed her off the road.

    And sitting outside a Tim Hortons having coffee anyone trying to turn into the complex was getting a blast from oncoming traffic including those trying to exit the complex. Seems like everyone was very pissed off with traffic.

  37. Ron/BC Says:

    Paula

    Here is XLK with PSAR. I can’t recall exactly how to use the indicator but would buying or selling on a change of pattern of dots work ok? EX:Buying when the dots are below price and the last dot was above. Or selling when the dots are above price and the next dot is below price?

    https://stockcharts.com/h-sc/ui?s=XLK&p=D&yr=1&mn=0&dy=0&id=p55707914660&a=759590953&listNum=1

  38. Paula Says:

    Ron/BC,
    If you click on my 2nd link in #35 you can read all about how to use PSAR.I don’t think it is how you said, if I understood what you said. Basically long when dots are below price,short when dots are above price but I use it in a modified way.

  39. DM/ON Says:

    Ron/BC, Paula

    First time I heard about PSAR was at the technical presentation about currency trading.
    My understanding is that currencies are highly levered and violent trades, and around the clock during global working week. So, the traders need some extra sharp indicator to steer in such a stormy waters between these dotted channels.

  40. Paula Says:

    Thanks DM/ON. Yes currencies, round the clock leverage, not my cup of tea.

  41. Ron/BC Says:

    Paula
    I read #35 and that is how I remember it as well but didn’t focus on the sideways price action issue. When it did that I’d just exit. Anything that isn’t normal or working correctly I exit as I don’t need to be in the action at all times and never fall in love with a stock or ETF. A person can always get back in quickly if they wish. Or just let price settle into a trend. Long ago on another site that traded futures some of us used what was referred to as a 13 point stop and reverse with the S%P Emini. “MOST” of the time it worked well for some strange reason but not always. Not sure what the technicals for it were but it sounds like it was based on SAR.

  42. Bernie Says:

    Wayne,

    Re: # US CEFs

    I do own one, BlackRock Health Sciences (BME). Its not really a dividend grower but they’ve never cut their dividend, which pays monthly, since inception in early 2005. Their total return has outperformed SPY by close to 4% annually when measured Apr 2005 to Apr 2020. Its done well for me.

  43. Bernie Says:

    Wayne,

    https://www.blackrock.com/us/individual/products/240227/blackrock-health-sciences-trust-usd-fund#/

  44. Bernie Says:

    Ron/BC

    Re: #33
    As you say there are many ways to skin a cat. My preference may be different than yours and I may not be quite as conservative as you but I do consider myself to be more conservative than most investors. There certainly is a lot less stress with a dividend growth investor than there is with one invested for capital gain. The likelihood of an annual dividend increase with a large cap dividend aristocrat is far more likely and predictable than an annual capital gain with the S&P500 and miles more likely than the TSX60. The S&P500 may have (very) slightly better long term price performance but I don’t wish to go that route. Its too wild a ride for me and I hate rollercoasters anyway lol.

  45. Bernie Says:

    Paula,

    Re: #35
    I haven’t looked at PSAR since 2011 when I did a little daytrading. I didn’t find its sensitivity suitable for short term trading at the time. Mind you my sensitivity wasn’t conducive for short term trading either. I haven’t looked at PSAR since. Would it not be similar to Renko? It might drive one batty in a volatile sideways market using the default settings.

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