Tech Talk for Monday October 18th 2021

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Editor’s Note: Next Tech Talk report is scheduled for release on Monday October 25th 2021

 

The Bottom Line

World equity indices moved higher again last week. Seasonal influences for developed nations naturally turn positive in the first half of October for a trade that frequently lasts to the first week in January.

Observations

Favourable seasonal influences by U.S. and Canadian equity indices were extended last week. Indices have entered into their strongest twelve week period of the year.

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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 again 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 remained 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) moved higher last week. It remained Overbought and trending higher See Barometer chart at the end of this report.

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

Intermediate term technical indicator for Canadian equity markets moved higher again last week. It remained 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 again last week. It remained Overbought and is trending higher. See Barometer charts at the end of this report.

Consensus estimates for earnings and revenues in 2021 by S&P 500 companies were raised significantly last week following the release of better than consensus third quarter results by 19 S&P 500 companies. According to www.FactSet.com earnings in the third quarter on a year-over year basis are projected to increase 30.0% (versus a previous estimate at 27.6%) and revenues are projected to increase 15.1% (versus a previous estimate at 14.9%). Earnings in the fourth quarter are projected to increase 22.1% (versus 21.8% last week) and revenues are projected to increase 11.6% (versus 11.5% last week). Earnings for all of 2021 are projected to increase 43.2% (versus 42.8% last week) and revenues are projected to increase 15.0%.

Consensus estimates for earnings and revenue growth in 2022 were adjusted slightly. Consensus earnings in 2022 by S&P 500 companies are projected to increase 9.5% (versus 9.7% last week) and revenues are projected to increase 6.8%. Consensus earnings for the first quarter are projected to increase 5.7% (versus 5.5% last week) and revenues are expected to increase 8.5% (versus 8.4% last week).

 

Economic News This Week

September Capacity Utilization to be released at 9:15 AM EDT on Monday is expected to increase to 76.5 from 76.4 in August. September Industrial Production is expected to increase 0.2% versus a gain of 0.4% in August.

September U.S. Housing Starts to be released at 8:30 AM EDT on Tuesday are expected to increase to 1.620 million units from 1.615 million units in August.

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

October Philly Fed Index to be released at 8:30 AM EDT on Thursday is expected to slip to 24.5 from 30.7 in September.

September Existing Home Sales to be released at 10:00 AM EDT on Thursday are expected to increase to 6.06 million units from 5.88 million units in August.

September Leading Economic Indicators to be released at 10:00 AM EDT on Thursday is expected to increase 0.4% versus a gain of 0.9% in August.

Canadian August Retail Sales to be released at 8:30 AM EDT on Friday is expected to increase 2.0% versus a decline of 0.6% in July. Excluding auto sales, August Retail Sales are expected to increase 3.0% versus a decline of 1.0% in July.

 

Selected Earnings News This Week

Frequency of U.S. earnings reports ramps up this week. Eighty S&P 500 companies (including eight Dow Jones Industrial Average companies) are scheduled to release results

Reports by TSX 60 companies start to appear including reports by CNR, CP and RCI.

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Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for Oct.15th 2021

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for Oct.15th 2021

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Green: Increase from previous day

Red: Decrease from previous day


Sectors

Daily Seasonal/Technical Sector Trends for Oct.15th 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

Greg Schnell discusses “Starting the Fall Run” Following is a link:

Starting the Fall Run | ChartWatchers | StockCharts.com

 

Greg Schnell also says, “This flag is beautiful”, a discussion on copper and copper stocks

This Flag is Beautiful | The Canadian Technician | StockCharts.com

 

David Keller discusses three charts to watch through year-end to identify health of markets

Three Charts to Watch Through Year-End | The Mindful Investor | StockCharts.com

 

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

https://enrichedinvesting.com/wp-content/uploads/2021/10/Perfect-storm-markets-rising-swift-rebound-oil-highs-struggling-gold-leading-stocks-elusive-breakout.pdf

 

Michael Campbell’s Money Talks for October169th

https://mikesmoneytalks.ca/oct-16th-episode-of-moneytalks/

 

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

 

Strategist’s Advice to Investors After 35 Years on Wall Street – Uncommon Sense Investor

 

50 Years of Investment Advice From Retiring Chief Economist – Uncommon Sense Investor

 

5 Battered Tech Stocks to Buy Now | Kiplinger

 

5 quality energy stocks with high dividend yields propelled by soaring oil prices – MarketWatch

 

Eric Nuttall: Oil investors stand vindicated — but there’s no time for a victory lap. Here’s the energy playbook for the rest of the year | Financial Post

 

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

Before the seasonal adjustments, retail sales in the US were down by 3.7% in September, which is actually the second strongest September performance in the past two decades. The average change is a decline of 7.2%. $STUDY $MACRO $XRT $RTH $AMZN #Economy #Consumer #Retail

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Oil inventories are on the rise for the first time since February, but with upbeat demand and the return to pre-hurricane levels of production of Oil, we see no reason for concern. equityclock.com/2021/10/14/… $USO $CL_F #Oil $XLE $XOP $OIH $IYE $FRAK $VDE

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TSX Composite Index $TSX.CA moved above its inter-day all time high at 20,897.57 to an all-time high extending an intermediate uptrend.

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Dow Jones Transportation Average iShares $IYT moved above $257.80 and $257.80 resuming an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to December 3rd. See seasonality charts are available by subscription at www.EquityClock.com

 

U.S. Broker iShares $IAI moved above $110.72 to an all-time high extending an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to February 15th. See seasonality charts are available by subscription at www.EquityClock.com

 

Home Depot $HD a Dow Jones Industrial Average stock moved above $343.74 to an all-time high extending an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to February 28th . See seasonality charts by subscription at www.EquityClock.com

 

Bank of New York Mellon $BK an S&P 100 stock moved above $56.64 extending an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to January 6th. See seasonality charts by subscription at www.EquityClock.com

 

General Dynamics $GD an S&P 100 stock moved above $205.23 extending an intermediate uptrend.

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O’Reilly Automotive $ORLY a NASDAQ 100 stock moved above $629.40 to an all-time high extending an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to December 3rd. See seasonality charts by subscription at www.EquityClock.com

 

Marriott $MAR a NASDAQ 100 stock moved above $159.98 extending an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to January 6th. See seasonality charts by subscription at www.EquityClock.com

Cognizant Technologies $CTSH a NASDAQ 100 stock moved above $78.36 setting an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to February 28th . See seasonality charts by subscription at www.EquityClock.com

 

Brookfield Asset Management $BAM.A.CA a TSX 60 stock moved above $72.52 to an all-time high extending an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to February 28th See seasonality charts by subscription at www.EquityClock.com

 

Lumber stocks and related ETFs continue moving higher. Nice breakout by Interfor $IFC.CA above $33.66 extending an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to February 28th. See seasonality charts by subscription at www.EquityClock.com

 

BMO Equal Weight Cdn. Bank ETF $ZEB.CA moved above $132.35 to an all-time high extending an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to December 3rd. See seasonality charts by subscription at www.EquityClock.com

National Bank $NA.CA a TSX 60 stock moved above $100.68 to an all-time high extending an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to December 3rd. See seasonality charts by subscription at www.EquityClock.com

 

Bank of Montreal $BMO.CA a TSX 60 stock moved above $132.35 to an all-time high extending an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to December 3rd . See seasonality charts by subscription at www.EquityClock.com

Agriculture ETF $COW.CA moved above Cdn$58.85 extending an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to February 15th See seasonality charts by subscription at www.EquityClock.com

Base Metals iShares $XBM.CA moved above $18.05 resuming an intermediate uptrend.

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Editor’s Note: Seasonal influences are favourable to February 20th. See seasonality charts by subscription at www.EquityClock.com

 

S&P 500 Momentum Barometers

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The intermediate term Barometer added 4.01 on Friday and 13.03 last week to 54.11. It remains Neutral and is trending higher.

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The long term Barometer added 0.40 on Friday and 5.41 last week to 73.55. It remains Overbought and is trending higher.

 

TSX Momentum Barometers

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The intermediate term Barometer slipped 2.08 on Friday, but added 15.49 last week to 57.55. It remains Neutral and is trending higher.

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The long term Barometer added 0.31 on Friday and 4.83 last week to 66.51. It remains Overbought and is trending higher.

 

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




18 Responses to “Tech Talk for Monday October 18th 2021”

  1. Ron/BC Says:

    The $SPX ran up to major price resistance at 4475 today. This needs to be cleared to suggest further gains.

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=6&dy=0&id=p50367825094&a=939923011

  2. Ron/BC Says:

    The XIU.to TSX 60 ETF is making new highs above Friday’s highs. So far so good………….

    https://stockcharts.com/h-sc/ui?s=XIU.TO&p=D&yr=1&mn=0&dy=0&id=p33063865384&a=1043716086

  3. Larry/ON Says:

    Before indices make new highs there are individual stocks and sectors that lead the way.
    Financials are considered a leading sector. XLF and KBE have made new all-time highs.
    MSFT – New all-time high today.
    AAPL – Good value here. Short-term negative news priced in and the direction now is up.
    Transports and semis are lagging but rising.
    Within semis NVDA and AMD will make new all-time highs very soon. They will lead SMH higher.
    We are about 1.5% away from a new SPX high. It’s just a matter of time.
    If I was to pick a geopolitical problem that could crater the market at some future date it would be a US-China confrontation over Taiwan. That’s what scares me the most but I don’t think it will happen for a while.

  4. FishFat Says:

    re: B2Gold Corp (BTO.to)
    After declining for about a year, BTO appears to be breaking out of the downtrend channel (although volume is low). What I like about the chart is the positive divergence on multiple indicators. BTO also pays a generous 4.0% dividend. Valuation is surprisingly low given a strong balance sheet.
    https://schrts.co/uWXshBau

  5. Ron/BC Says:

    The SPY is approaching the September high.

    https://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=0&mn=3&dy=0&id=p17236921481&listNum=1&a=691023604

  6. Larry/ON Says:

    Re 4. FishFat does Randy Bachman have a stake in the company?

  7. Ron/bc Says:

    #5 chart:Price is bumping up against the September high double top resistance. Many traders will be exiting their positions there. This price point needs to be cleared and held to expect further gains.

  8. Ron/BC Says:

    FishFat RE:#4

    B2Gold is in a battle to clear 5.25 price resistance and just above that is the 200ema. Lots of potential once crossed.

    https://stockcharts.com/h-sc/ui?s=BTO.TO&p=D&yr=2&mn=0&dy=0&id=p25715566135&a=678232475

  9. Larry/ON Says:

    SP500 – New high. Just stick with the market until early January. I would beware commodity related equities unless you really know what you are doing. I use a tech and financials barbell and it works for me. I think Cdn banks will do well when they report earnings and we may have the regulator allow dividend increases and buybacks maybe within the next couple of months.

  10. Paula Says:

    Ron/BC,

    Re your comment #2: XIU is also outperforming the S&P since about September 20. I am using ZSP.TO as proxy for the S&P. I have added this to your chart…

    https://schrts.co/pAPcscgz

  11. Ron/BC Says:

    Paula
    Thanks for the info. I do think there has been a big loss of momentum on that ratio chart of yours though with the new highs presently. But I tend to be paranoid anyways,lol.

  12. Paula Says:

    Ron/BC
    Yes, you are correct, momentum is slowing. But this could be a longer, less steep trend. Could have mentioned it sooner.

  13. Larry/ON Says:

    NVDA – New all-time high, AMD – very close to taking out its’ all-time high
    Financials really strong particularly US. You have a lot of room for them to move higher after the consolidation from the March highs
    SIVB really taking off. RBC and Wedbush raised their price targets on it this morning and have outperform ratings. Wedbush covers a lot of tech firms and I like seeing them cover this bank which is silicon valley based.

  14. FishFat Says:

    Larry/ON re:#6
    Ya, ya! With a ticker symbol like that you might be right.

    Ron/BC re:#8
    To be honest I did not see the resistance at $5.25. The stock price jumped through it this morning, but the price has had a stead climb since the beginning of October and the 200d-EMA may prove to be formidable.

  15. Ron/BC Says:

    FishFat

    BTO.to’s chart is very positive on most indicators but also very overbought. “IF” price can clear that 200ema it would typically pull back to that 5.25 breakout point. That would be the ideal buy point from my perspective as it would have proven itself by then.

    https://stockcharts.com/h-sc/ui?s=BTO.TO&p=D&yr=2&mn=0&dy=0&id=p46269575373&a=678232475

    https://stockcharts.com/freecharts/seasonality.php?symbol=BTO.TO

  16. Ron/BC Says:

    The SPY continues to spin its wheels at the September high resistance. Price needs to clear AND hold above this level to suggest higher prices. What would be bullish to see is a clear breakout and run up and then pullback to this present breakout point to suggest a buy order.

    https://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=0&mn=3&dy=0&id=p48806995657&a=691023604

  17. David Says:

    Help please. I need some knowledge.
    What i understand is that in an inflation cycle all commodities are supposed to go up. Is this true or not ? And if so why is $copper and $lumber failing? It seems like Energy is the strongest commodity.

  18. Larry/ON Says:

    RE 17. For lumber look at US housing starts and compare to prior years. Do some investigation of lumber mill output in response to the early year price run-up. You also have other materials substituted for lumber in some applications. For copper price has consolidated since March. No big downturn there.

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