Tech Talk for Monday October 25th 2021

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Pre-opening Comments for Monday October 25th

U.S. equity index futures were higher this morning. S&P 400 futures were up 7 points in pre-opening trade.

Bausch Health gained US$0.41 to $29.13 after receiving FDA approval for Xipere

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Restaurant Brands International added $0.47 to Cdn$76.59 after reporting higher than consensus third quarter earnings.

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Alibaba slipped $0.40 to $174.00 after Truist lowered its target price from $260 to $230.

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Celanese added $0.85 to $169.33 after JP Morgan raised its target price from $175 to $195.

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EquityClock’s Daily Comment

Following is a link:

http://www.equityclock.com/2021/10/23/stock-market-outlook-for-october-25-2021/

 

The Bottom Line

World equity indices moved higher again last week. Seasonal influences for developed nations turned positive as usual in the first half of October. Seasonal influences usually remain positive until the first week in January.

 

Observations

Favourable seasonal influences on U.S. and Canadian equity indices were extended last week. The S&P 500 Index, Dow Jones Industrial Average and TSX Composite Index recorded all-time highs. North American equity indices have entered their strongest twelve week period of the year ending in the first week in January. The Dow Jones Transportation Average led the advance..

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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 changed from Neutral to Overbought. Ttrend is 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. Trend is higher See Barometer chart at the end of this report.

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

Intermediate term technical indicator for Canadian equity markets moved higher again last week. It changed from Neutral to Overbought. Trending is 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) was virtually unchanged last week. It remained Overbought. Trend is 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 again last week following the release of better than consensus third quarter results by another 96 S&P 500 companies. According to www.FactSet.com earnings in the third quarter on a year-over year basis are projected to increase 32.7% (versus a previous estimate at 30.0% last week) and revenues are projected to increase 15.3% (versus a previous estimate at 15.1%). Earnings in the fourth quarter are projected to increase 22.4% (versus 22.1% last week) and revenues are projected to increase 11.9% (versus 11.6% last week). Earnings for all of 2021 are projected to increase 44.1% (versus 43.2% last week) and revenues are projected to increase 15.2%(versus15.0% last week).

Consensus estimates for earnings and revenue growth in 2022 were adjusted slightly. Consensus earnings for the first quarter are projected to increase 6.2% (versus 5.7% last week) and revenues are expected to increase 8.6% (versus 8.5% last week). Consensus earnings in 2022 by S&P 500 companies are projected to increase 9.5% (versus 9.5% last week) and revenues are projected to increase 6.8%.

 

Economic News This Week

September U.S. New Home Sales to be released at10:00 AM EDT on Tuesday are expected to increase by 755,000 units versus 740,000 units in August.

September Durable Goods Orders to be released at 8:30 AM EDT on Wednesday are expected to drop 1.0% versus a gain of 1.8% in August. Excluding Transportation Orders, September Durable Goods Orders are expected to increase 0.4% versus a gain of 0.3% in August.

Bank of Canada updates central bank interest rate policy at 10:00 AM EDT on Wednesday. Overnight lending rate for major banks is expected to remain unchanged at 0.25%. Press conference is scheduled at 11:00 AM EDT.

Annualized real third quarter U.S. GDP to be released at 8:30 AM EDT on Thursday is expected to increase 2.8% versus a gain of 6.7% in the second quarter.

September Personal Income to be released at 8:30 AM EDT on Friday is expected to slip 0.1% versus a gain of 0.2% in August. September Personal Spending is expected to increase 0.5% versus a gain of 0.8% in August.

Canadian August GDP to be released at 8:30 AM EDT on Friday is expected to increase 0.7% versus a decline of 0.1% in July.,

October Chicago PMI to be released at 9:45 AM EDT on Friday is expected to slip to 64.0 from 64.7 in September.

October Michigan Consumer Sentiment to be released at10:00 AM EDT on Friday is expected to increase to 71.6 from 71.4 in September.

 

Selected Earnings News This Week

Frequency of U.S. quarterly earnings reports ramps expands this week. 164 S&P 500 companies (including 10 Dow Jones Industrial Average companies) are scheduled to release results

Frequency of reports by TSX 60 stocks ramps up this week.

weekday earnings reports


Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for Oct.22nd 2021

spx oct 25

Green: Increase from previous week

Red: Decrease from previous week

 

Commodities

Daily Seasonal/Technical Commodities Trends for Oct.22nd 2021

crb oct 25

Green: Increase from previous week

Red: Decrease from previous week

 

Sectors

Daily Seasonal/Technical Sector Trends for Oct.22nd 2021

xlk oct 25

Green: Increase from previous week

Red: Decrease from previous week

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

 

Links from Valued Providers

Greg Schnell discusses “Copper-the 2021 Pumpkin of October” Following is a link:

Copper – The 2021 Pumpkin of October | The Canadian Technician | StockCharts.com

 

Greg Schnell discusses “Digging for gold in the cellar”. Following is a link:

https://www.youtube.com/watch?v=UWrQVv8bJ_o

 

Michael Campbell’s Money Talks for October 23rd

Oct 23rd Episode of MoneyTalks (mikesmoneytalks.ca)

 

David Keller after the close on Friday discusses “Why breadth matters as S&P tests 4550”

https://www.youtube.com/watch?v=ON6zkwxlumc

 

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

 

Four "Stealth Tech" Ideas For the Roaring ’20s – Uncommon Sense Investor

 

The Trillion Dollar Wealth Transfer & Why It Matters – Uncommon Sense Investor

 

Financial Planning 411: Getting Started – Uncommon Sense Investor

 

7 Best Transportation Stocks to Buy Now | Kiplinger

 

Hotel Stocks to Profit from Travel Rebound | Morningstar

 

 

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

changes

S&P 500 Momentum Barometers

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The intermediate term Barometer advanced 11.62 to 65.73 last week. It changed from Neutral to Overbought on a move above 60.00. Trend remains up.

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The long term Barometer added 2.80 to 76.35 last week. It remains Overbought. Trend remains up.

 

TSX Momentum Barometers

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The intermediate term Barometer advanced another 9.12 to 66.67 last week. It changed form Neutral to Overbought on a move above 60.00. Trend remains up.

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The long term Barometer slipped 1.29 to 65.22 last week. It remains Overbought. Trend remains up.

 

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




14 Responses to “Tech Talk for Monday October 25th 2021”

  1. Larry/ON Says:

    MRNA – It’s been trapped between 320 and 340. RSI is gradually rising and you have a positive MACD crossover. Using 4 and 9 day MAs for short-term movements the 9 day has now caught up with price. The DB sell rating on MRNA has been shook off by the market and most investors IMO are not taking it seriously which I think reflects very positively on the stock.
    XLV – Health care sector ETF has had a nice recovery and is up against temporary resistance having met the top end of the Bollinger Band but is not overbought on RSI.

  2. Larry/ON Says:

    TSLA – OMG. It is at 90 RSI.

  3. Ron/BC Says:

    All I’ve been reading is how bullish the experts are over the next few months. This chart suggests the horse already left the barn a year and a half ago and looks like it should be getting tired soon. Almost 2000 pts above its long term uptrendline and 1200 pts above its 200ema suggests price is stretched out to extremes.

    https://stockcharts.com/h-sc/ui?s=%24SPX&p=W&yr=20&mn=0&dy=0&id=p00340201422&a=673066405

  4. Larry/ON Says:

    Re 3 – Attached is a link to a historical bar chart with SP500 annual returns. While the market is somewhat elevated using a logarithmic chart will be less alarming. When I started investing I had the Templeton Growth mountain chart going back as I remember to 1954. Of course they didn’t use a logarithmic scale so the visual effect of the mountain chart was quite impressive. Look at the numbers and the market roughly doubled in five year periods from 2011 to 2016 and 2016 to 2021. If you don’t use a logarithmic scale you are looking at an illusion.

    https://www.macrotrends.net/2526/sp-500-historical-annual-returns

  5. Paula Says:

    Ron/BC,
    I don’t think you can say that gold stocks have left the barn. Maybe they are getting up off the floor. Here is an old chart of yours that could use an update, please.

    https://schrts.co/DsHYDsyP

  6. Ron/BC Says:

    Paula
    Well the Gold stocks haven’t done well mainly due to the Crypto currencies being the go to investment vehicle for some time now. A better precious metals stock might just be HL. Here is a chart to consider.

    https://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=5&mn=0&dy=0&id=p57131573544&a=673066134

  7. Ron/BC Says:

    #4
    I track charts that the majority of traders and investors buy and sell by. I don’t really care much about the other types……………

  8. Paula Says:

    Ron/BC,

    Thanks for your response. I swore off individual mining stocks many years ago. Maybe best to just avoid the whole sector.

  9. Larry/ON Says:

    RON/BC – You simply don’t understand and I want to make sure others are led to make bad decisions .Logarithmic scales plot equal percentage changes in the same vertical distance on the scale taking out distortion if you are looking at rate of change over time. Most technical analysts and traders use logarithmic scales. For example let’s say I raise your pay by 10% each year from 100 to 110 (yr1) to 121(yr2) to 133.10(yr3) to 146.41(yr4). In year 4 I have given you a raise of $13.31 where as in year one I gave you a raise of $10. The dollar amount is larger but in percentage terms it is the same.
    https://www.investopedia.com/ask/answers/05/logvslinear.asp

  10. Larry/ON Says:

    My first sentence should read “I want to make sure others are NOT led to make bad decisions.”

  11. Ron/BC Says:

    Larry/ON
    I do understand! And there is a place for them buttttttttttt…

    Believe what you wish but I’ve tracked and traded stock charts since the 70’s and taken many courses in it but would never tell everyone they should try to trade and invest your way just because you happen to believe it’s the best way. All you will ever see from the best technical analysts in the world are standard price charts. Everyone following them wont make bad decisions! I suggest you simply get over yourself and your beliefs as naive as they may be…………..

  12. Ron/bc Says:

    Paula
    You make a good point about buying single stocks.I don’t care for them either but will “trade” them briefly. Their problem is there are too many variables with single stocks compared to ETFs.

  13. Paula Says:

    Yes too many things can go wrong so risk is greater with single stocks. Just trying to find a sector that has not already had a big move.

  14. Ron/BC Says:

    Paula

    Best interest rate now is 1.75% on a 3 month GIC. So now I have most of my money at the brokerage in both currencies so I’m ready to jump on something. But I don’t let money burn a hole in my pocket so will wait for a good trade. I did buy XIU.to but sold it too soon. I don’t’ mind exiting quickly as I’m not a trading junky that has to be “IN” the market all the time. Did that long ago. ZEB.to looks good being banks. The XIU.to is also banks plus commodities but can get hit for a variety of reasons. So everything is not going to go to the moon right away so one must be patient.

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