Tech Talk for Monday April 4th 2022

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Pre-opening Comments for Monday April 4th

U.S. equity index futures were higher this morning. S&P 500 futures were up 8 points in pre-opening trade.

Twitter advanced $9.49 to $48.80 on news that Elon Musk has acquired a 9.2% interest in the company.

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Tesla gained $7.51 to $1092.10 after announcing record production in the first quarter.

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Constellation Brands added $1.29 to $235.00 after the Sands family proposed a switch to a single class common share structure.

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Cenovus Energy (CVE Cdn$21.19) is expected to open higher after offering positive guidance for 12022

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EquityClock’s Daily Comment

Headline reads, “Questionable data out of the transportation industry triggers a selloff in the stocks.  We discuss further in today’s report”.

 

Following is a link:

http://www.equityclock.com/2022/04/02/stock-market-outlook-for-april-4-2022/

Bottom Line

Economic sensitive (i.e. risk on) sectors have a history of outperforming the S&P 500 Index in the month of April, notably Energy, Industrials and Materials sectors.

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Observations

Consensus earnings estimates for S&P 500 companies on a year-over-year basis in the first quarter of 2022 were unchanged again last week: 67 companies have issued negative guidance to date and 29 companies have issued positive guidance. According to www.FactSet.com first quarter earnings on a year-over-year basis are expected to increase 4.7% (versus 4.8% last week) and revenues are expected to increase 10.7%.

Consensus estimates for S&P 500 companies beyond the first quarter on a year-over-year basis increased slightly again. According to www.FactSet.com second quarter earnings are expected to increase 5.8% (versus 5.6% last week) and revenues are expected to increase 9.6% (versus 9.7% last week). Earnings in the third quarter are expected to increase 10.3% and revenues are expected to increase 8.7%. Earnings in the fourth quarter are expected to increase 9.6% and revenues are expected to increase 9.3%. Earnings on a year-over-year basis for all of 2022 are expected to increase 9.5% (versus 9.4% last week) and revenues are expected to increase 9.3% (versus 9.0% last week).

 

Economic News This Week

February Factory Orders to be released at 10:00 AM EDT on Monday are expected to drop 0.6% versus a gain of 1.4% in January.

February U.S. Trade Deficit to be released at 8:30 AM EDT on Monday is expected to narrow to $88.50 billion from $89.70 billion in January.

February Canadian Trade Balance to be reported at 8:30 AM EDT on Tuesday is expected to be a surplus of $1.60 billion versus a surplus of $2.62 billion in January.

FOMC Meeting Minutes from the last meeting are to be released at 2:00 PM EDT on Wednesday

March ISM Non-Manufacturing PMI to be released at 10:00 AM EDT on Thursday is expected to increase to 58.5 from 56.5 in February.

Canada’s Federal Government releases its budget at 4:00 PM EDT on Thursday.

March Canadian Unemployment Rate to be released at 8:30 AM EDT on Friday is expected to increase to 6.2% from 5.5% in February.

 

Selected Earnings News This Week

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Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for April 1st 2022

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Green: Increase from previous day

Red: Decrease from previous day


Commodities

Daily Seasonal/Technical Commodities Trends for April 1st 2022

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for April 1st 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

Mark Leibovit discusses Russia, Ukraine, U.S. Dollar and Cryptos

Russia Ukraine, US Dollar, Cryptos – HoweStreet

Michael Campbell’s Money Talks for April 2nd

April 2nd Episode (mikesmoneytalks.ca)

 

Comments from Mark Bunting and www.uncommonsenseinvestor.com

 

"Buy the Dip, Sell the Rip." Here’s Why. – Uncommon Sense Investor

 

CEO of Global Luxury Brand Warns of Consumer Slowdown Amid "Chaotic" Conditions – Uncommon Sense Investor

 

Three High Quality, High Volatility Stocks to Consider – Uncommon Sense Investor

 

Three Reasons Recession Fears Overblown – Uncommon Sense Investor

 

7 Defense Stocks to Buy as Geopolitical Risks Rise | Kiplinger

 

Greg Schnell says “Financial charts are crumbling”

Financial Charts are Crumbling | ChartWatchers | StockCharts.com

 

Technical Scoop from David Chapman and www.EnrichedInvesting.com

Currency-wars-supremacy-attack-food-riots-low-jobs-cloudy-rise-inverting-yields-golden-divergence.pdf (enrichedinvesting.com)

 

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

S&P 500 Index has gained 2.4%, on average, in the month of April with 80% of periods seeing gains in the past two decades. equityclock.com/2022/03/31/… $STUDY $SPX $SPY $ES_F

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Chinese equities and related ETFs/closed end funds finally are showing positive technical action following a substantial drop related to recent COVID 19 breakouts. $CAF is a closed end fund holding Chinese "A" shares. Nice breakout above $16.90. $FXI is an ETF holding a basket of big cap Chinese stocks.

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Global Base Metals iShares $XBM.CA moved above Cdn$24.94 to an all-time high extending an intermediate uptrend.

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Teck Resources $TECK a TSX 60 stock moved above US$41.75 to an 11 year high extending an intermediate uptrend.

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T-Mobile $TMUS a NASDAQ 100 stock moved above $129.57 extending an intermediate uptrend. Seasonal influences are strongly favourable to May 30th . If a subscriber to EquityClock, see seasonality chart at https://charts.equityclock.com/tmobile-us-inc-nasdtmus-seasonal-chart

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Seattle Genetics $SGEN a NASDAQ 100 stock moved above $145.57 completing a reverse Head & Shoulders pattern.

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Cenovus $CVE.CA a TSX 60 stock moved above $21.48 to a six year high extending an intermediate uptrend.

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Wallgreens Boots $WBA a Dow Jones Industrial Average stock moved below $43.19 extending an intermediate downtrend.

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Gold stocks on both sides of the border are recording upward momentum spurts. Kinross Gold $KGC a TSX 60 stock moved above US$5.97 completing a double bottom pattern. Seasonal influences are favourable for Kinross on a real and relative basis to the end of May. If a subscriber to EquityClock, see seasonality chart at https://charts.equityclock.com/kinross-gold-corp-nysekgc-seasonal-chart

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Canadian forest product stocks including $IFP.CA $CFP.CA and $WFG.CA moved sharply lower on falling lumber prices. Interfor completed a double top pattern on a move below Cdn$34.75

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Canadian Imperial Bank of Commerce $CM.CA a TSX 60 stock moved below $151.38 completing a double top pattern.

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S&P 500 Momentum Barometers

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The intermediate term Barometer added 1.28 on Friday and 1.81 last week to 63.33. It is Overbought and showing early signs of rolling over.

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The long term Barometer slipped 1.40 on Friday and 0.60 to 52.51 last week. It remains Neutral and showing early signs of rolling over.

 

TSX Momentum Barometers

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The intermediate term Barometer dropped 4.43 on Friday and 1.73 last week to 65.37. It remains Overbought and showing early signs of trending down.

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The long term Barometer dropped 0.87 on Friday and 0.43 last week. It remains Overbought and showing early signs of 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.




11 Responses to “Tech Talk for Monday April 4th 2022”

  1. Dave/AB Says:

    Just wondering if anyone has a good site or ticker for stockcharts that shows the 2 and 10-year yield curve. Hoping to see it combined and how flat it is. Thanks

  2. Larry/ON Says:

    Paula – You made an excellent technical call on XBI on Friday.

  3. Ron/BC Says:

    Dave/AB

    Here is a Stockcharts chart of both along with a ratio chart. Not likely what you are looking for but thought I’d post it for you in case it’s helpful in anyway.

    https://stockcharts.com/h-sc/ui?s=%24UST2Y&p=D&yr=1&mn=0&dy=0&id=p68135949626&a=1136394471

  4. Paula Says:

    Dave/AB,
    Re: #1.
    I seem to have a couple saved. Here is a weekly:

    https://schrts.co/eVQHeyfT

    and a daily:

    https://schrts.co/GdAnXJRM

    Are these what you are looking for?

  5. Paula Says:

    Larry,
    Re: #2.
    Thanks, so far, so good…

  6. Paula Says:

    Re: Yield curve(s)
    I have hearing a lot how it is the 3month-10year spread that is the most important in predicting a recession. I was trying to find a good source for this and there it is in the link above to David Chapman’s weekly report on page 19 and 20:

    “Recession warning! Recession warning! Okay, it’s only one but for the first time since late 2019 the spread between the 2-year U.S. Treasury note and the U.S. 10-year Treasury note has turned negative (known as the 2–10 spread). Also turning negative this past week was the 5–30 spread and the 5–10 spread. An inverted yield curve has been a consistent sign of a possible recession over the past forty years. However, we also show the 3month-10 spread and at 1.85% it is nowhere near turning negative. There are many who put more faith in the 3M-10 spread than the 2–10 spread. As we can see, we need to see the 3M–10 spread turn negative to give us more confidence that a recession could be coming. If the Fed hikes interest rates 50 bp in May as many expect, that could get things going towards an inverted 3M–10 spread. Until that happens the 2–10 spread inverting may just be an early warning sign. A recession remains potentially months away.”

    He also shows the $UST10Y-$UST2Y chart on Stockcharts.com and it quite clearly correlated with recessions over the last 40+ years.

    Thank-you TechTalk and David Chapman for giving us access to this weekly report.

  7. Paula Says:

    Re: Yield curve(s)
    I have been hearing a lot how it is the 3month-10year spread that is the most important in predicting a recession. I was trying to find a good source for this and there it is in the link above to David Chapman’s weekly report on page 19 and 20:

    “Recession warning! Recession warning! Okay, it’s only one but for the first time since late 2019 the spread between the 2-year U.S. Treasury note and the U.S. 10-year Treasury note has turned negative (known as the 2–10 spread). Also turning negative this past week was the 5–30 spread and the 5–10 spread. An inverted yield curve has been a consistent sign of a possible recession over the past forty years. However, we also show the 3month-10 spread and at 1.85% it is nowhere near turning negative. There are many who put more faith in the 3M-10 spread than the 2–10 spread. As we can see, we need to see the 3M–10 spread turn negative to give us more confidence that a recession could be coming. If the Fed hikes interest rates 50 bp in May as many expect, that could get things going towards an inverted 3M–10 spread. Until that happens the 2–10 spread inverting may just be an early warning sign. A recession remains potentially months away.”

    He also shows the $UST10Y-$UST2Y chart on Stockcharts.com and it quite clearly correlated with recessions over the last 40+ years.

    Thank-you TechTalk and David Chapman for giving us access to this weekly report.

  8. Ron/BC Says:

    Paula

    Since the 70’s I’ve always watched interest rates and housing price changes. When the warning bells go off for me I’ve always seen a frenzie of house buying with sharply rising prices making headlines and then sharply rising interest rates. And then a sharp drop in home inventories with the public crying to the government to “do something”. That has never changed and has been a handy indicator for me to get in or get out of the speculative housing market. And like everything it’s always better to be a little early than a little late. And like the old guru Joe Granville used to say, “Winners have long memories and losers have short memories.” Thanks for your charts……………

  9. dutchcanuck Says:

    Ron/BC #3
    Subtract the 2yr from the 10yr
    by using a minus sign and you will get a single point below the zero line.
    Makes it a little clearer IMO.

  10. Ron/BC Says:

    DutchCanuck

    Re:#9
    You mean like this???? I could have sworn there was a ticker for this in Stockcharts.

    https://stockcharts.com/h-sc/ui?s=%24UST10Y-%24UST2Y&p=D&yr=5&mn=0&dy=0&id=p39627084877&a=1136747443

  11. Ron/BC Says:

    DutchCanuck

    And then there is this.

    https://stockcharts.com/h-sc/ui?s=%24YC3MO&p=D&yr=2&mn=0&dy=0&id=p59259098070&a=676456435

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