Tech Talk for Thursday May 28th 2020

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Pre-opening Comments for Thursday May 28th

U.S. equity index futures were higher this morning. S&P 500 futures were up 5 points in pre-opening trade.

Index futures were virtually unchanged following release of economic news at 8:30 AM EDT. Consensus for April Durable Goods Orders was a drop of 19.0% versus a decline of 16.6% in March. Actual was a drop of 17.2%. Excluding Transportation Orders, April Durable Goods Orders was a drop of 14.0% versus a decline of 1.7% in March. Actual was a decline of 7.4%. Consensus for next estimate of U.S. first quarter GDP was a drop of 4.8% versus a gain of 2.1% in the fourth quarter. Actual was a decline of 5.0%. Consensus for Weekly Jobless Claims was a drop of 2.10 million versus a drop of 2.426 million last week. Actual was a drop of 2.123 million.

Boeing gained $11.05 to $160.61 after announcing plans to resume production of its 737 Max aircraft.

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HP Inc dropped $1.25 to $15.87 after reporting lower than consensus second quarter revenues. In addition, JP Morgan downgraded the stock from Overweight to Neutral

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Canadian Imperial Bank of Commerce (CM $91.80) is expected to open lower after reporting lower than consensus fiscal second quarter earnings.

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Toll Brothers jumped $3.00 to $36.00 after reporting higher than consensus fiscal second quarter earnings.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2020/05/27/stock-market-outlook-for-may-28-2020/

Note seasonality charts on the U.S. Financial Sector and the NASDAQ 100 Index relative to the S&P 500 Index.

 

Technical Notes

TSX Composite Index closed above 15,257.93 extending an intermediate uptrend. S&P/TSX 60 also broke out with a move above 922.18. Related ETF (XIU) broke out on a move above $23.11.

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More S&P 100 and Dow Jones Industrial stocks moved above recent trading ranges setting intermediate uptrends: Marriot, Exxon Mobil, American Express, Bank of America, Bank of New York Mellon, Citigroup, Capital One, Lowe’s MetLife, Honeywell, AT&T

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Breakouts were dominated by U.S. based financial stocks and related ETF: XLF KBE KRE

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Another NASDAQ 100 stock moved above recent trading ranges setting intermediate

up trends: PAYX

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Italy iShares (EWI) moved above $21.69 completing a base building pattern and setting an intermediate uptrend.

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Steel ETF (SLX) moved above $25.39 setting an intermediate uptrend.

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Aerospace and Defense ETF (PPA) moved above $56.13 extending an intermediate uptrend. Ditto for ITA on a move above $161.52,

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Forest Product iShares (WOOD) moved above $54.42 extending an intermediate uptrend.

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Agribusiness ETF trading in Canada (COW.TO) moved above $36.04 extending an intermediate uptrend.

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Canadian Equally Weighted Banks ETF (ZEB.TO) moved above $23.75 completing a base building pattern and setting an intermediate uptrend.

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TSX Financial iShares (XFN.TO) moved above $32.51 completing a base building pattern and setting an intermediate uptrend.

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Breakouts by Canadian Bank ETFs were triggered by breakouts by National Bank, Royal Bank and Toronto Dominion Bank, setting intermediate uptrends following release of fiscal second quarter results.

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ManuLife Financial moved above $17.86 setting an intermediate uptrend.

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for May 27th 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Seasonal/Technical Commodities Trends for May 27th 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for May 27th 2020

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Green: Increase from previous day

Red: Decrease from previous day

Greg Schnell’s “Market Buzz”

Greg discusses the “Dark Cloud of the NASDAQ 100”. Following is a link:

https://www.youtube.com/watch?v=UWlhR_1sCJc&feature=youtu.be

 

S&P 500 Momentum Barometer

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The Barometer gained another 3.61 to 94.19 yesterday. It remains extremely overbought, but has yet to show signs of an intermediate peak.

 

TSX Momentum Barometer

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The Barometer added 0.45 to 89.73 yesterday. It remains extremely overbought, but has yet to show signs of an intermediate peak.

 

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 28th 2020”

  1. tony Says:

    Vivek,

    The Nasdaq is more volatile than the SnP, but had bought in the SnP in july 2000 and didn’t sell by october by jan 2003 your portfolio would have been worth half of its value.

    So having great indicators and knowing how to use them is the key to successful investing.

  2. tony Says:

    Good morning Bernie,

    To answer your question,
    my exit strategy is when my 4h chart macd turns negative and price falls below 50MA.

    If you ask me why 4h chart well the answer is simple:

    1-The hourly chart since march 24th you gained 13$ profit as of yesterday,

    2-The daily chart you entered on april 14th at around 210$ price is currently 230$ but price is way above the 50MA(206$) so should the market take a breather for the summer time the fall is not worth the risk.

    3- As for the 4 hour chart march 31st macd was positive but price was still below 50MA.So that wasn’t the day I went all in but on april 6th when both price was above the 50MA and macd was positive. I haven’t exited my position because Price is king above the 50MA and MACD is still positive. Should the market turn on me and macd turns negative 50 MA is only 221 so thats a drop of 9$ and I would make me a gain of 24$/sh as of today.

  3. Paula Says:

    Ron/BC,
    Thanks for your explanation and chart in #24 yesterday.

  4. Larry/ON Says:

    Banks – Hot money coming out now and some of it going right back into QQQ.

  5. Paula Says:

    Tony,
    Thanks for your #20 explanation of chart yesterday.

    RE your #21 yesterday, I was going to say thanks for the offer but why not share your insights with the whole board? Now I see in your #2 response to Bernie today, that you have done this. I will be studying your explanation.

  6. bruce Says:

    the AAII survey for week ending may 27th shows bulls up 4.1 to 33.1% and bears down 2.9 to 42.1 which is the lowest bearish sentiment in 12 weeks but is still high…….

  7. Mary Says:

    Ron/BC

    NTR NTR
    Ron…here is some our conversation, sorry cannot find the comment but nevertheless TLRY was a trade again today. Here is some of our conversation.

    1. Mary Says:
    May 6th, 2020 at 7:58 pm
    Ron/BC
    RE #20 – Thanks, I exited my position last Wednesday.
    http://schrts.co/usQmUENY
    I base my buy/sell a lot on Wm%R(14)
    Is that a good strategy Ron. I am not a member of Stockchart so even if I save some charts it may not have all the marks up.
    Appreciate!
    1. Ron/BC Says:
    May 8th, 2020 at 12:42 am
    Mary
    I don’t know where you got in with TLRY but the stock has been plunging since last September. Must have been a good story on the stock because I know a very successful lady that really loaded the boat with the stock. And like many investors refused to sell it all the way down. I hope you didn’t get in early.
    https://stockcharts.com/h-sc/ui?s=TLRY&p=D&yr=1&mn=0&dy=0&id=p94545099737&a=682439611&listNum=1
    1. Mary Says:
    May 8th, 2020 at 10:45 am
    Ron/BC
    Thanks for the chart last night. I got in last week at $7.47. I notice this stock makes its high between 9:30 and around 11:00 a.m. daily for the past few days then closes almost at the low. Not sure what to read when a stock does this day after day. Same today as I writing.
    Glad to hear you had an awesome day golfing yesterday. Enjoy if you are out there.

  8. tony Says:

    Larry,

    Money is either moving to Weed stocks that one needs to be played ou on hourly chart no to say 30 min charts.

  9. Larry/ON Says:

    Thoughts From Guru Cramer On Rotation
    https://www.cnbc.com/2020/05/28/cramer-says-the-reopen-trade-may-not-have-much-further-to-go-im-afraid-to-go-all-in.html

  10. tony Says:

    Larry,

    Sorry about last post.

    Money is either moving to Weed stocks. Need to be play it on an hourly chart no to say a 30 min chart or gold producers

  11. Mary Says:

    CNBC said last Friday someone did a survey to see what people were doing with the cheques they received from the Government. Surprisingly, they opened trading accounts, of the 7 stocks they named Canopy Growth and GE was included. Hmm…

  12. Larry/ON Says:

    Re 10 and 11 – I got my fingers burned on Canopy a while back when they made their deal with Constellation Brands and it was all about expansion into the US. I should have known better and I don’t invest in speculative stocks like that. Interestingly with people home with nothing to do I guess you can buy weed and blow a few brain cells to pass the time.

  13. Ron/BC Says:

    Mary

    Well they say amateurs determine the opening prices and professionals determine the closing prices. So the closing price is the most important as you know if the professionals are buying or selling the stock.

    As far as Williams%R goes it is not that popular but that doesn’t mean much either. It tracks much like Stochastics as the chart shows. I prefer RSI 8 for short term signals but like all oscillators they just follow momentum which can change in a heartbeat. And they get get very oversold and stay there as price continues to rally as well. That is why price patterns are so important as they tell the story of what has happened including now whether at price resistance or a fresh breakout or a double bottom. An reliable price pattern is a W pattern which is what you likely played with APA and even TLRY. Right now TLRY has formed a bullish Ascending Triangle with the breakout point at $10 which is also a psychological number most traders trade off of especially on a breakout. Price has held above $10 now for a few days and next resistance isn’t until $15. So even with price in a pronounced downtrend this Ascending Triangle has broken out and is holding above the $10 resistance pt. I never got a fill at $10 as it didn’t stay there long and I’m not about to chase price with such an ‘overall’ bearish and controversial stock. Must be better fish to fry. So here is SPY with Elder Bars. But note the similarity of the oscillators being Williams %R and Slow Stochastics. Like peas in a pod. Even the RSI 8 is similar but not as erratic. Notice though I have smoothed out the RSI 8 with a 2ema. You could also smooth out other erratic indicators with a moving average on them. In any case thanks for the reply. Also note the breakout of the SPY.

    https://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=3&mn=0&dy=0&id=p45795697950&a=758836580

  14. Mary Says:

    Ron/BC
    Re# 13 – wish I could save the chart above as is. I’ll book mark and use as reference. Indeed William%R got me into trades a little too early at times, then I had to hold for a while. Maybe you can look at the VIX.

  15. Mary Says:

    Ron/BC
    RE# 14…I should clarify, I can save your chart but as soon as I change anything most of the oscillators disappear.

  16. Bernie Says:

    tony,

    Thanks for sharing your exit/entry strategy! Just curious, I’m not familiar with a “4 hour chart”. Is this only available to stockcharts paid members?

  17. Ron/BC Says:

    Mary

    Here is an 8 month chart of XLK (TECH). I’ve put on Fibonacci numbered moving averages of 13,21,34 plus the 50ema and 200ema. They act much like Channels or Bands in that they move together and signal when there is a change in price that is ‘significant’ as the 13ema will cross above the 21ema rather than just track together. You could also add the 8ema and 5ema for faster signals. I also put a ratio chart of XLK:SPY to show the relative performance of the two. Plus there is the standard MACD and the RSI 21 below that shows when it is above or below the 50 line signalling a bullish bias when above the 50 line or bearish bias when below the 50 line. This is especially helpful when determining a positive or negative trend medium term.

    The reason I made up this chart wasn’t to emphasize the above but felt I should explain it. I wanted to show you your favorite indicator Williams%R and Slow Stochastics also as they both track closely together. I’ve also put on a 10ema on both to show how you could if you wish just watch the moving average of them as the indicators are erratic and a moving average does smooth them out. The moving average can be changed to anything you like as I have a 2ema on the RSI 8 up top which smooths out that indicator a little. Here is the chart for you to see if it has any useful value to you. Always keep in mind you can adjust most anything to suit your style of trading.

    https://stockcharts.com/h-sc/ui?s=XLK&p=D&yr=0&mn=8&dy=0&id=p97486744128&a=673066156

  18. Mary Says:

    Ron/BC

    Maybe a couple more days of market up for month end. Then maybe a pullback, have you thought of trading the VIX or shorting gold. I bought UVXY for a trade.

  19. Ron/BC Says:

    Mary

    UVXY at $30 looks like it might be a good trade. I spend a lot of time on the computer looking at property listings and when out golf a lot and drive by condos for sale that look interesting. I’m just not as conscientious as I once was on trading stocks and ETFs. Been seriously considering putting all my RIF money that is in U.S.$ into one of Questrade’s Funds and just using my CD$ for trading but the Canadian market doesn’t compare to the U.S.market. I never have liked the CD market.

    https://stockcharts.com/h-sc/ui?s=UVXY&p=D&yr=1&mn=6&dy=0&id=p06409075295&a=761004343

  20. Mary Says:

    Ron/BC
    I have never spent so much time on a computer except during this pandemic period. Once we get the clear all I don’t want to be indoors. I trade mainly in US$, rest in boring secure GICs. I was told Vanguard is a good fund but for many years I didn’t take risk and doubt whether I will now.

    CMHC is predicting a decline of about 18% in Ontario R.E. mainly the greater Toronto area that should be referenced to but they haven’t said exactly that. In about 25 years this maybe the first time they are doveish on R.E. The banks I think had a lot of loan losses.

  21. tony Says:

    Hi Bernie,

    Yahoo financial offers 1-2-5-15-30mins 1hr-4hr, daily, weekly, monthly and yearly charts for free.
    If you create a Yahoo email account, you’ll also be able to setup a portfolio. All this always free.

    I’ve stopped spending money on stockcharts about 2 yrs ago.

    https://ca.finance.yahoo.com/portfolio/p_2/view/v2

  22. Bernie Says:

    tony,

    Thats good to know for all the members here. Thanks!

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