Pre-opening Comments for Thursday May 5th
U.S. equity index futures were lower this morning. S&P 500 futures were down 32 points at 7:30 AM EDT.
First quarter Non-farm Productivity Report is expected to be released at 8:30 AM EDT. Consensus is a drop of 2.3% versus a gain of 6.6% in the fourth quarter of 2021.
Etsy dropped $11.98 to $97.35 after the company offered weaker than consensus second quarter sales.
![clip_image001[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2022/05/clip_image0011-3.png "clip_image001[1]")
Cognizant Technology fell $4.35 to $80.01 after the company offered less than consensus sales guidance.
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2022/05/clip_image0021-2.png "clip_image002[1]")
Booking Holdings gained $229.22 to $2,332.55 after reporting higher than consensus first quarter revenues.
![clip_image003[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2022/05/clip_image0031-3.png "clip_image003[1]")
eBay dropped $3.52 to $50.90 after the company offered less than consensus sales and earnings guidance.
![clip_image004[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2022/05/clip_image0041-1.png "clip_image004[1]")
EquityClock’s Daily Comment
Headline reads “Yields and the US Dollar showing hints of peaking and we are reacting”. Following is a link:
http://www.equityclock.com/2022/05/04/stock-market-outlook-for-may-5-2022/
The Canadian Technician
Greg Schnell notes that “Energy stocks break out to start the rally”
Energy Stocks Break Out To Start The Rally | The Canadian Technician | StockCharts.com
Responses to the FOMC announcement
At 2:00 PM EDT, the FOMC announced a 0.50% increase in the Fed Fund Rate to 1.00% (as expected) and reduction in the Balance Sheet by $95 billion per month starting on June 1st (as expected. Market responses after 2:00 PM EDT were as follows:
The S&P 500 soared repeating a pattern set by the previous three announcements.
Long term government bond yields dropped.
The U.S. Dollar Index plunged
The Canadian Dollar soared.
Gold bullion prices and related ETFs moved higher
Gold equity prices and related ETFs moved higher
Technical Notes released yesterday at
The rise in factory inventories through the first quarter of this year has been the strongest in a decade, suggesting that, as consumer momentum slows, there is simply too much “stuff.” equityclock.com/2022/05/03/… $STUDY $MACRO #Economy #Manufacturing
Natural Gas ETN $UNG moved above $28.15 extending an intermediate uptrend.
Homebuilders SPDRs $XHB moved above $65.02 completing a double bottom pattern.
MMM $MMM a Dow Jones Industrial Average stock moved above $153.26 completing a double bottom pattern.
Exxon Mobil $XOM a Dow Jones Industrial Average stock moved above $91.50 extending an intermediate uptrend.
Emerson Electric $EMR an S&P 100 stock moved below $86.27 extending an intermediate downtrend.
Restaurant Brands International $QSR.CA a TSX 60 stock moved below Cdn$67.67 extending an intermediate downtrend.
Thomson Reuters $TRI.CA a TSX 60 stock moved below Cdn$123.08 extending an intermediate downtrend
Constellation Software $CSU.CA a TSX 60 stock moved below Cdn$1,994.04 extending an intermediate downtrend.
IAMGold $IMG.CA broke below Cdn$3.06 extending an intermediate downtrend following company guidance.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for May 4th 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for May 4th 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for May 4th 2021
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 offered by Valued Providers
Comments from Mark Bunting and www.uncommonsenseinvestor.com
"The Vacuum Effect" of the U.S. Dollar – Uncommon Sense Investor
The Trouble for Big Tech Stocks in Two Charts – Uncommon Sense Investor
Greg Schnell asks “Is a market rally starting”?
Is A Rally Starting? | Greg Schnell, CMT | Market Buzz (02.16.22) – YouTube
S&P 500 Momentum Barometers
The intermediate term Barometer surged 19.84 to 48.90 yesterday. It changed from Oversold to Neutral on a move above 40.00.
The long term Barometer added 5.01 to 43.09 yesterday. It changed from Oversold to Neutral on a move above 40.00.
TSX Momentum Barometers
The intermediate term Barometer advanced 8.64 to 32.73 yesterday. It remains Oversold.
The long term Barometer added 3.18 to 50.91 yesterday. It remains Neutral.
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.
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May 5th, 2022 at 3:55 am
Hi Dutchcanuck,
When you say…..
a hedge in a sizeable “hybrid” short position in US treasuries
can you pls explain a bit what hybrid means and what you are using?
May 5th, 2022 at 5:27 am
Risk on markets = USD down and vice versa
US Fed was not overly hawkish yesterday so that does not put pressure on $CAD.
Commodity prices continue to be in a huge bull market which historically is CAD supportive but less so recently.
The only way USD moves higher is if the US equity market breaks down further but as of yesterday afternoon we have the opposite.
May 5th, 2022 at 8:56 am
the AAII is 26.9% bullish up from 16.4% last week….historical average is 38.0%..the bearish view dropped to 52.9% from 59.4….historically the average for the bears is 30.5%….
May 5th, 2022 at 1:02 pm
Wednesday’s big rally was a good example of a short covering rally……………..That’s what happens when short sellers panic on a perceived bullish news event.
May 5th, 2022 at 1:16 pm
The Weekly $SPX remains 500 PTS above its 200ema and 1200 PTS above its long term uptrendline. Anyone thinking this is OK and still bullish needs to read a book on technical analysis instead of day dreaming of profits. Reminds me of the song, “Dream on Little Broomstick Cowboy.”
https://stockcharts.com/h-sc/ui?s=%24SPX&p=W&yr=20&mn=0&dy=0&id=p91123533216&a=673066405
May 5th, 2022 at 4:19 pm
Energy is a different universe than the rest of the market which is hideous. It’s like being in a lifeboat while others around you are in the water some with lifejackets and some not. I thought energy as the last place to hide was possibly rolling over today for a needed pullback but money piled in when it dropped pushing prices back up.