Tech Talk for Friday March 25th 2022

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Pre-opening Comments for Friday March 25th

U.S. equity index futures were higher this morning. S&P 500 futures were up 16 points in pre-opening trade.

Darden Restaurants slipped $0.26 to $132.14 after the company lowered 2022 guidance.

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Cannabis equities and related Exchange Traded Funds are expected to open higher on news that the U.S. House of Representative is planning to vote on legalization of cannabis use.

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Alaska Airlines added $1.79 to $57.73 after Cowen raised its target price from $66 to $85.

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Bed Bath & Beyond advanced $2.03 to $24.13 after the company reached a cooperative agreement with an activist investor.

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EquityClock’s Daily Comment

Following is a link:

http://www.equityclock.com/2022/03/24/stock-market-outlook-for-march-25-2022/

Headline reads,”The stability of Bitcoin is seen as a positive for risk assets in this market rebound, but we still need to see a break above $45,000 in order to place it back on our list of market segments to accumulate”.

Technical Notes released yesterday at

StockTwits.com@EquityClock

The trend of the US Dollar Index remains in a position of a headwind against risk assets and it could be a significant factor behind whether or not stocks realize the gains that are average for the month of April. equityclock.com/2022/03/23/… $USDX $USD $UUP #USD #USDollar

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New Home Sales in the US are higher by 6.6% through the first two months of 2022, which is the weakest performance since 2011 as the housing market was still healing from the Great Financial Crisis. The average change in the run-up to the spring home buying season is a rise of 20.6%. $STUDY $MACRO $ITB $XHB $KBH $PHM $DHI $TOL

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Aerospace & Defense iShares $ITA moved above $111.90 to extend an intermediate uptrend and Powershares Aerospace & Defense ETF $PPA moved above $78.65 to an all-time high extending an intermediate uptrend.

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Materials SPDRs $XLB moved above intermediate resistance at $86.89.

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U.S. Oil & Gas Exploration and Production SPDRs $XOP moved above $132.22 extending an intermediate uptrend. Seasonal influences are favourable to April 24th. If a subscriber to EquityClock, see seasonality chart at https://charts.equityclock.com/spdr-sp-oil-gas-exploration-production-etf-nysexop-seasonal-chart

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Natural Gas ETN $HUN.CA moved above Cdn$4.82 extending an intermediate uptrend. Seasonal influences are favourable to May 24th. If a subscriber to EquityClock, see seasonality chart at https://charts.equityclock.com/horizons-natural-gas-etf-tsehun-to-seasonal-chart

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One of the reasons for strength in Materials SPDRs $XLB is strength in copper stocks and related ETFs. Global copper equity ETF $COPX moved above $46.27 to an all-time high extending an intermediate uptrend.

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BHP Group $BHP one of the world’s largest base metal producers moved above $73.68 to an all-time high extending an intermediate uptrend.

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Union Pacific $UNP an S&P 100 stock moved above $270.14 to an all-time high extending an intermediate uptrend. Seasonal influences are favourable to June 5th. If a subscriber to EquityClock, see seasonality chart at https://charts.equityclock.com/union-pacific-corporation-nyseunp-seasonal-chart. One of several U.S. railway stocks recording nice gains this morning. See chart at $DJUSRR

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CGI Group $GIB.A.CA, a TSX 60 stock moved below $99.26 extending an intermediate downtrend.

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Forest product stocks and related ETFs $WOOD $CUT are responding to the breakdown by lumber prices below US$900 per TBT. West Fraser Timber $WFG.CA moved below Cdn$111.30 completing an intermediate topping pattern.

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Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for March 24th 2022

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Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for March 24th 2022

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Green: Increase from previous day

Red: Decrease from previous day

 

SECTORS

Daily Seasonal/Technical Sector Trends for March 24th 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)

 

The Canadian Technician

Greg Schnell discusses “Getting our trading back on the rails”. Focus is on the North American railway industry. Following is a link:

 

https://stockcharts.com/articles/canada/2022/03/getting-our-trading-back-on-th-825.html

 

Greg Schnell also is a participant in Chart Madness released by www.stockcharts.com yesterday where four technical analysts make their stock picks for the rest of 2022. Following is a link:

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

 

Seasonality Chart of the Day

Optimal favourable seasonal influences for the North American railway industry are positive on a real and relative basis (relative to the S&P 500 Index) between now and June 2nd.

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Wolf on Bay Street

Don Vialoux is a guest on the “Wolf on Bay Street” radio show hosted by Wolfgang Klein and Jack Hardill. The show is broadcasted at 7:00 PM EDT on Saturday on Corus Radio 640. Discussion included comments on the Uranium, Infrastructure and Healthcare sectors.

 

S&P 500 Momentum Barometers

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The S&P 500 momentum Barometer gained 8.82 to 57.72 yesterday. It remains Neutral.

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The long term momentum Barometer added 4.01 to 51.70 yesterday. It remains Neutral.

 

TSX Momentum Barometers

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The intermediate term momentum Barometer slipped 1.29 to 69.40 yesterday. It remains Overbought.

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The long term Barometer eased 2.44 to 64.22 yesterday. It remains Overbought.

 

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 Friday March 25th 2022”

  1. Ron/BC Says:

    I may be a little bearish but this $TSX chart looks just a little over extended on the upside…………….

    https://stockcharts.com/h-sc/ui?s=%24TSX&p=W&yr=20&mn=0&dy=0&id=p39065080504&a=1093149596

  2. Paula Says:

    Bernie,

    RE: #2 yesterday
    I don’t blame you for not commenting much. As you say, you have your set portfolio which doesn’t require a lot of monitoring or research. This is a far cry from what most are looking for: hot tips, momentum trading…
    These days, I have less time for spending in front of my computer screen. Too many other things to do. LOL

  3. Paula Says:

    Ron/BC,

    Careful, your bear suit is showing LOL.

  4. Larry/ON Says:

    Energy – Yeah momentum baby! Pop the champagne. Off to the moon and beyond. Interesting how large cap energy does well one day and then small caps outperform the next. If someone has that figured out I am curious to hear the answer. The Houti rebels helped support WTI today with their attack on a Saudi oil facility.

  5. Ron/bc Says:

    Paula
    Yes I do expose myself far too often. Must learn to cover up my bareish opinions. Too many wild eyed bulls to contend with. I just can’t stand the rah,rah,rah crowd as they invariably end up in tears

  6. FishFat Says:

    re: USD , CAD
    The USD is carving out a nice rounded bottom and is up 0.61% this week relative to a basket of international currencies. The CAD dollar on the other hand broke-out of a consolidation pattern to moved up 1.01% relative to the USD. This shows that the strength in the CAD is on its own merit rather than due to a declining USD. An interesting point (at least to me) to understand.
    https://schrts.co/ShnnQFbP
    https://schrts.co/YrWGQEMN

  7. Paula Says:

    Ron/BC,

    Isn’t it the pigs that get slaughtered?

  8. Paula Says:

    FishFat,

    Pardon my ignorance. How do you know that the USD chart shows it relative to a basket of international currencies? And that the CAD chart is relative to the USD? Is this what is represented by the symbols?

  9. Ron/BC Says:

    FishFat

    I agree with you on the short term and I wouldn’t be surprised to see it rally to 83. But looking at a multi year chart of the CD$ I see it is still under its long term downtrendline plus its 6 year channel top both at 83 resistance.

    https://stockcharts.com/h-sc/ui?s=%24CDW&p=W&yr=20&mn=0&dy=0&id=p52085442462&a=1081737333

    https://stockcharts.com/freecharts/seasonality.php?symbol=%24CDW

  10. Ron/BC Says:

    Paula

    One of the best indicators I ever came across since the 70’s is the public’s exuberance. I used to meet with a group of investors (traders actually) and when they were jumping up and down about buying this and that it was always at a top area in those markets. Even real estate which is where I like to speculate it’s the same. Notice now everyone and his dog wants to buy a home now? As a warning Vancouver recently reported a huge spike in homes listed for sale and the offers that had been 10 to 30 on each house is now down to a small handful at best. So be careful what you wish for is the old saying as you just might get it. The major indicators including sentiment from some novices suggest a major top is forming and then the next change will be to the downside along with rising interest rates. I’d love to see savings and GIC rates quadruple and then just plunk my money in them like I used to. I’m not smart like you and Bernie that invest in dividend ETFs and stocks as my level of belief seems to be limited. And yes,pigs do get slaughtered…….every time.

  11. FishFat Says:

    Paula, re:#8
    Your questions are reasonable.

    Your first question: “How do you know that the USD chart shows it relative to a basket of international currencies?”

    The value of major currencies are normally expressed one of two ways. Either as a “currency pair” (such as CAD/AUD, CAD/EUR, EUR/CHF etc.) or simply as a value relative to the USD.

    The exception to this rule is the value of the USD. Its value is determined by the US Dollar Index (USDX). The USDX is calculated relative to the value of six major world currencies that make up the most significant trading partner of the US. The six currencies are the Euro, Japanese Yen, Canadian Dollar, British Pound, Swedish Krona, and Swiss Franc. The currencies components within the USDX index have different weights, with the Euro making up about 57% and the CAD about 9%. (Google USDX in Investopedia or Wikipedia for more info.)

    Now look at the description of the $USD index shown by Stockcharts. The full name is:
    $USD US Dollar – Cash Settle (EOD) ICE

    Notice the acronym ICE at the end. ICE commonly refers to the Intercontinental Exchange (ICE). This company is a global exchange house that sets the USDX. So I assumed Stockcharts $USD Index is referencing the ICE USDX Index which is based on the basket of currencies.
    But, hey I am not an expert in forex so if someone feels I am making an error or knows something else please correct me.

  12. FishFat Says:

    Paula, Re: #8
    Your second question: “that the CAD chart is relative to the USD?

    To show the gain this week of 1.01% in the value of the CAD relative to the USD I was originally going to show the chart $USDCAD (which I have now attached below). But I thought that the chart would be confusing because it is the inverse of what I wanted to emphasis (ie. the rise in the CAD). So instead, I attached the $CAD chart. To show the $CAD chart is the exact inverse of the $USDCAD chart I have overlaid them in the second chart attached below.

    https://schrts.co/eJADmQij

    https://schrts.co/WpsrDTtD

  13. Paula Says:

    FishFat,

    Thanks for your explanations and charts. I always did find currency pairs confusing and have to think very hard to understand them. The charts really help with that. I took the liberty of changing the colours on the second chart so that the $USDCAD is shown with green up, red down and $CAD is shown in blue. It helps me to see the big inverses relationship since covid began.

    https://schrts.co/KHngQWew

    Ron/BC,

    Your long term chart of $CDW includes the time period from 2003 to 2011, when it outperformed the USD, except for the GFC/recession 2008-2009. This was during the last big commodity “super cycle”, which some are saying is beginning again. Maybe 83.29 is the line in the sand that will confirm this IF that does happen.

  14. Ron/BC Says:

    Paula

    RE:#13

    Yes that’s what I was thinking as well………….

    Here is that chart again with a ratio chart above showing the 7 year channel clearly. A breakout of that channel would definitely be meaningful. And inspite of no one believing it could happen (including me) remember the old saying: Never say Never……………

    https://stockcharts.com/h-sc/ui?s=%24CDW&p=W&yr=20&mn=0&dy=0&id=p22781273843&a=1081737333

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