Tech Talk for Monday October 11th 2021

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Pre-opening Comments for Monday October 11th

U.S. equity index futures were lower this morning. S&P 500 futures were down 16 points in quiet pre-opening trade. Today is a partial holiday in the U.S.: The bond market is closed and equity markets are open.

WTI crude oil surged $2.61 to $81.96 per barrel.

Starbucks slipped $1.33 to $112.55 after Deutsche Bank lowered its rating from Buy to Hold.

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Zoom dropped $1.26 to $253.79 after Stifel Nicolaus reduced its target price from $350 to $300.

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Comcast eased $0.93 to $53.77 after Raymond James downgraded the stock from Outperform to Market Perform

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Southwest Airlines fell $1.42 to $52.50 after the company cancelled over 1,000 flights yesterday.

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The Bottom Line

World equity indices were mostly higher last week. Seasonal influences for developed nations usually turn positive at this time of year for a trade that frequently lasts to the first week in January.

 

Observations

Start of favourable seasonal influences by U.S. and Canadian equity indices for their traditional yearend rally appeared on schedule last week.

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Short term short term indicators for U.S. equity indices and sectors (20 day moving averages, short term momentum indicators) moved higher last week.

Intermediate term technical indicator for U.S. equity markets (Percent of S&P 500 stocks trading above their 50 day moving average) moved higher last week. It changed from Oversold to Neutral and is trending higher. See Barometer chart at the end of this report.

Long term technical indicator for U.S. equity markets (Percent of S&P 500 stocks trading above their 200 day moving average) was virtually unchanged last week. It remained Overbought and trending lower See Barometer chart at the end of this report.

Short term momentum indicators for Canadian indices and sectors moved higher last week.

Intermediate term technical indicator for Canadian equity markets moved higher last week. It changed from Oversold to Neutral and is trending higher. See Barometer chart at the end of this report.

Long term technical indicator for Canadian equity markets (Percent of TSX stocks trading above their 200 day moving average) moved higher last week. It changed from Neutral to Overbought. See Barometer charts at the end of this report.

Consensus estimates for earnings and revenues in 2021 by S&P 500 companies were virtually unchanged again last week. According to www.FactSet.com earnings in the third quarter are projected to increase 27.6% and revenues are projected to increase 14.9%.. Earnings in the fourth quarter are projected to increase 21.8% (versus 21.5% last week) and revenues are projected to increase 11.5% (versus 11.4% last week). Earnings for all of 2021 are projected to increase 42.8% (versus 42.6% last week) and revenues are projected to increase 15.0%.

Consensus estimates for earnings and revenue growth in 2022 increased slightly. Consensus earnings in 2022 by S&P 500 companies are projected to increase 9.7% (versus 9.6% last week) and revenues are projected to increase 6.8% (versus 6.7% last week). Consensus earnings for the first quarter are projected to increase 5.5% (versus 5.3% last week) and revenues are expected to increase 8.4% (versus 8.3% last week).

 

Economic News This Week

Today is a statutory holiday in Canada and a partial holiday in the U.S.

September Consumer Price Index to be released at 8:30 AM EDT on Wednesday is expected to increase 0.3% versus a gain of 0.3% in August. Excluding food and energy, September Consumer Price Index is expected to increase 0.2% versus a gain of 0.1% in August.

FOMC Meeting Minutes are released at 2:00 PM EDT on Wednesday.

September Producer Price Index to be released at 8:30 AM EDT on Thursday is expected to increase 0.6% versus a gain of 0.7% in August. Excluding food and energy, September Producer Price Index is expected to increase 0.4% versus a gain of 0.6% in August.

September Retail Sales to be released at 8:30 AM EDT on Friday are expected to slip 0.2% versus a gain of 0.7% in August. Excluding auto sales, September Retail Sales are expected to increase 0.5% versus a gain of 1.8% in August.

October Empire State Manufacturing Survey to be released at 8:30 AM EDT on Friday is expected to slip to 27.00 from 34.30 in September.

August Business Inventories to be released at 10:00 AM EDT are expected to increase 0.6% versus a gain of 0.5% in July.

October Michigan Consumer Sentiment to be released at 10:00 AM EDT is expected to increase to 73.8 from 72.8 in September

 

Selected Earnings Reports This Week

Nineteen S&P 500 companies (including five Dow Jones Industrial Average companies) are scheduled to release quarterly earnings reports this week. Focus this week is on U.S. Banks

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Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for Oct.8 2021

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for Oct.8 2021

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for Oct.8 2021

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Green: Increase from previous day

Red: Decrease from previous day

All seasonality ratings are based on performance relative to the S&P 500 Index (except TSX)

 

Links from Valued Providers

 

Thank you to David Chapman and www.EnrichedInvesting.com for a link to the following weekly Technical Scoop report:

 

Ceiling save, Evergrande pause, waning economy, energy crunch, Canada recovery, toppy market, solid gold

 

Michael Campbell’s Money Talks for October 9th

We’re On! Entire Show – Oct 9th (mikesmoneytalks.ca)

 

Thank you to Mark Bunting and www.uncommonsenseinvestor.com for links to the following comments and videos:

 

Five Reasons the Oil Rally Will Last – Uncommon Sense Investor

 

Why the Unwinding of the Credit Bubble "Will Not Be Pretty." – Uncommon Sense Investor

 

https://uncommonsenseinvestor.com/positioning-your-portfolio-for-rising-rates-in-an-expensive-mark

 

These Stocks Can Grow Faster Than the Economy & Inflation – Uncommon Sense Investor

 

https://financialpost.com/investing/investing-pro/david-rosenberg-deflation-not-inflation-will-be-the-topic-when-housing-equity-bubbles-pop

 

Technical Scores

Calculated as follows:

Intermediate Uptrend based on at least 20 trading days: Score 2

          (Higher highs and higher lows)

Intermediate Neutral trend: Score 0

          (Not up or down)

Intermediate Downtrend: Score -2

          (Lower highs and lower lows)

 

Outperformance relative to the S&P 500 Index: Score: 2

Neutral Performance relative to the S&P 500 Index: 0

Underperformance relative to the S&P 500 Index: Score –2

Above 20 day moving average: Score 1

At 20 day moving average: Score: 0

Below 20 day moving average: –1

Up trending momentum indicators (Daily Stochastics, RSI and MACD): 1

Mixed momentum indicators: 0

Down trending momentum indicators: –1

Technical scores range from -6 to +6. Technical buy signals based on the above guidelines start when a security advances to at least 0.0, but preferably 2.0 or higher. Technical sell/short signals start when a security descends to 0, but preferably -2.0 or lower.

Long positions require maintaining a technical score of -2.0 or higher. Conversely, a short position requires maintaining a technical score of +2.0 or lower

 

Changes Last Week

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Technical Notes released on Friday at

StockTwits.com@EquityClock

So far, the market is acting according to plans, but we can always pivot, as we are today with Natural Gas. equityclock.com/2021/10/07/… $UNG $UNL $NG_F $UGAZ $FCG #NatGas

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Access to seasonality charts is available for subscriber to www.EquityClock.com

 

Editor’s Note: Natural gas prices in the U.S. have a history of moving higher to early December. See: https://charts.equityclock.com/natural-gas-futures-ng-seasonal-chart

 

Platinum ETN $PPLT moved above $94.38, $96.06 and $96.46 completing a Reverse Head & Shoulders pattern.

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Precision Drilling $PD.CA Canada’s largest oil services company moved above Cdn$54.72 extending an intermediate uptrend.

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Cenovus Energy $CVE.CA a TSX 60 stock moved above Cdn$14.18 to a four year high extending an intermediate uptrend.

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Lumber futures $LUMBER moved above $695.00 and $700.00 completing a classic reverse Head & Shoulders pattern.

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S&P 500 Momentum Barometers

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The intermediate term Barometer slipped 1.40 on Friday, but gained 8.41 last week to 41.08. It changed from Oversold to Neutral on a recovery above 40.00 and is trending up.

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The long term Barometer dropped 3.01 on Friday and slipped 0.20 last week. It remains Overbought

 

TSX Momentum Barometers

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The intermediate term Barometer advanced 2.06 on Friday and gained 8.88 last week to 42.06. It changed from Oversold to Neutral on a recovery above 40.00 and is trending up.

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The long term Barometer added 0.29 on Friday and 1.87 last week. It changed from Neutral to Overbought on a recovery about 60.00.

 

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




8 Responses to “Tech Talk for Monday October 11th 2021”

  1. Ron/BC Says:

    The $SPX continues to find resistance at its downtrendline from early Sept. Technical indicators remain bearish.

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=6&dy=0&id=p62839885641&a=939923011

  2. Paula Says:

    Ron/BC,
    Thanks for your $SPX chart and recent daily comments. I am wondering what you mean by “I recently put all my TFSA cash along side my RRIF cash” in your #7 comment to Ana on Friday.

    Thanks Ana for your $ES chart and comments.

  3. Ron/bc Says:

    Paula
    I just meant I sent my TFSA cash to Questrade. So now I’ll have both accounts handy for trading. One in CD$ and the other in U.S.$.

  4. Paula Says:

    Ron/BC
    Oh, I guess you had your TFSA cash invested in various accounts with banks for interest income. I forgot about that. Thanks for your reply. I wish you good luck in all your trades and more importantly, good health.

  5. Ron/BC Says:

    Paula

    Yes I was just switching my CD$ to the highest interest paying CD banks back and forth until none of them were paying well anymore. And I don’t regret that as I made thousands of dollars risk free and did very well overall. As far as my health goes I’ve been battling sore muscles and joints for several months now which is odd for me as I tend to bounce back like a rubber ball hitting concrete. Not this time it seems. And I have been very tired most days as well. I did have some blood tests done and found I was high on Vitamin B-12 which can give you fatigue when too high so stopped taking that. And I started taking Iron. Those two things have helped improve my overall health thankfully. I do have to wonder about the timing of these aches and pains as I got vaccinated in mid May and mid June which is when I had a couple of very mild falls. I typically just carry on with no more than a short term ache but not this time. I just have to wonder if there is a connection between the long term aches and stiff joints and the vaccinations..
    Stay well…………..not always such an easy thing to do.

  6. Ana Says:

    #2. Paula,

    Hope you and your family are doing well. I have been trading $NatGas, but am out of that for now. I am shorting the $SPX these days.

    Stay healthy!

  7. Ana Says:

    #5. Ron/BC

    Sorry to hear about your aches and pains. I had a sore hip however an Osteopath really helped me. You probably have loads of Osteopaths in Victoria, as it is an alternative to getting treatment from a medical doctor. I had the sore hip from probably digging in the yard.

  8. Ana Says:

    $SPX $ES

    Watching the shoulder line of the head and shoulders:

    https://invst.ly/wacxc

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