Tech Talk for Friday September 4th 2020

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Pre-opening Comments for Friday September 4th

U.S. equity index futures were lower this morning. S&P 500 futures were down 4 points in pre-opening trade.

Index futures recovered slightly following release of the U.S. August Employment Report at 8:30 AM EDT. Consensus for August Non-farm Payrolls was 1.400 million versus revised 1.743 million in July. Actual was 1.371 million. Consensus for August Unemployment Rate was 9.8% versus 10.2% in July. Actual was 8.4%

The Canadian Dollar was slipped 0.10 to U.S. 76.27 cents following release of Canada’s August Employment Report at 8:30 AM EDT. Consensus was an increase in employment of 300,000 versus 418,500 in July. Actual was 245,800. Consensus for the August Unemployment Rate was a drop to 10.1% from 10.9% in July. Actual was 10.2%

Broadcom advanced $3.91 to $356.00 after reporting higher than consensus quarterly revenues and earnings. Mizuho raised its target on the stock from $350 to $390.

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DocuSign dropped $17.00 to $225.01 after Wedbush dropped its target price from $270 to $240

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Lululemon slipped $6.87 to $372.00 after Citigroup raised its target price on the stock from $340 to $400, but lowered its rating from Buy to Neutral.

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EquityClock’s Daily Comment

Following is a link:

http://www.equityclock.com/2020/09/03/stock-market-outlook-for-september-4-2020/

Note seasonality chart on Non-farm Payrolls

Next Tech Talk Report

Next report is released on Tuesday September 8th. Monday is a holiday

Technical Notes for Thursday

The VIX Index vaulted 7.03% to 33.60%. ‘Tis the season for volatility by U.S. equity indices to move higher to mid-October!

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S&P Energy Index moved below 259.46 and 260.78 completing a Head & Shoulders pattern

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Palladium ETN (PALL) moved above $220.00 extending an intermediate uptrend.

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Electronic Arts (EA), a NASDAQ 100 stock moved below $135.56 completing a Head & Shoulders pattern.

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MercadoLibre (MELI), a NASDAQ 100 stock moved below $1,090.00 completing a double top pattern.

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Kinder Morgan (KMI), an S&P 100 stock moved below $13.60 setting an intermediate downtrend.

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ConocoPhillps (COP), an S&P 100 stock moved below $35.90 extending an intermediate downtrend.

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Take Two Interactive (TTWO), a NASDAQ 100 stock moved below $165.34 completing a double top pattern.

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for September 3rd 2020

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Seasonal/Technical Commodities Trends for September 3rd 2020

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Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for September 3rd 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 dropped 9.62 to 73.75 yesterday. It changed from extremely intermediate overbought to intermediate overbought on a drop below 80.00

 

TSX Momentum Barometer

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The Barometer dropped 7.96 to 63.94 yesterday. It remains intermediate overbought and trending 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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5 Responses to “Tech Talk for Friday September 4th 2020”

  1. Ron/BC Says:

    One of the best indicators of what the broad market is going to do next is a breadth indicator. This SPX50R is just one of many. It shows what the percentage of stocks in the S&P500 area above their 50day moving average. When stocks begin to selloff as smart money moves out of them this indicator like many other indicators moves much lower even with the broad index SPX moves higher. Always a good idea to pay attention to breadth indicators as they give everyone plenty of time to exit the market. I’ve overlaid the SPX in blue over the Indicator with the bearish divergences shown with red downtrendlines on its lower highs.

    https://stockcharts.com/h-sc/ui?s=%24SPXA50R&p=D&yr=2&mn=0&dy=0&id=p27768866660&a=807961654

  2. Larry/ON Says:

    I haven’t been to the dentist for a cavity for a while but the last two days reminds of what it feels like.

  3. Larry/ON Says:

    Early in the day and no guarantees but we may have just seen the bottom in stocks like AAPL where buying kicked-in on today’s drop. The 50day MA held up as support so far. You need a few days for this to play out.

  4. Paula Says:

    Ron/BC,
    Thanks for the SPX50R chart. You posted a similar one based on the NYSE on August 31, which I saved. As you say, there are many breadth charts to choose from. One problem with them is timing. They can show divergences for a long time before the market finally reacts. As shown in your chart, there was a divergence since June and one would have missed out on the spectacular run since then if just following this breadth chart. I did miss our on most of the run up, just caught a few trades here and there since I was too skeptical to hold. Not a true believer, I guess, LOL.

  5. Ron/BC Says:

    Paula
    I stopped being a believer decades ago so never experience FOMO. But breadth indicators are great “heads up” or #FORE” warning signals even though early. One could exit stocks after week or so when seen and sit in cash or bonds or anything else that protects your capital. A stop loss may also work but you really need to be watching cautiously.

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