Pre-opening Comments for Friday May 6th 2022
U.S. equity index futures were lower this morning. S&P 500 futures were down 2 points in pre-opening trade.
Index futures recovered slightly following release of the U.S. Employment report at 8:30 AM EDT. Non-farm Payrolls were expected to increase 400,000 versus a gain of 431,000 in March. Actual was 428,000. Unemployment Rate was expected to remain unchanged from March at 3.6%. Actual was unchanged at 3.6%. Average Hourly Earnings were expected to increase 0.4% versus a gain of 0.4% in March. Actual was an increase of 0.3%. On a year-over-year basis Average Hourly Earnings were expected to increase 5.5% versus 5.6% in March. Actual was an increase of 5.5%.
The Canadian Dollar was virtually unchanged at US77.97 cents following release of Canada’s April Employment Report at 8:30. Consensus was an increase of 40,000 versus a gain of 72,500 in March. Actual was an increase of 15,300. Consensus for the April Canadian Unemployment Rate was unchanged from March at 5.3% Actual was a drop to 5.2%.
Zillow dropped $3.68 to $36.10 after lowering second quarter guidance.
![clip_image001[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2022/05/clip_image0011-4.png "clip_image001[1]")
Door Dash advanced $7.85 to $81.00 after reporting a 35% increase in first quarter revenues.
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2022/05/clip_image0021-3.png "clip_image002[1]")
Shake Shack added $0.95 to $57.00 after reporting lower than consensus first quarter loss.
![clip_image003[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2022/05/clip_image0031-4.png "clip_image003[1]")
EquityClock’s Daily Comment
Headline reads “Watching the comparisons of the market now to what was seen in 2018, the last time that the yield on the 10-year Treasury note crossed above 3%”. Following is a link:
http://www.equityclock.com/2022/05/05/stock-market-outlook-for-may-6-2022/
Technical Notes released yesterday at
eBay $EBAY a NASDAQ 100 stock moved below $49.33 extending an intermediate downtrend.
SNC Lavalin $SNC.CA a TSX 60 stock moved below $25.93 extending an intermediate downtrend.
Yields and the US Dollar showing hints of peaking and we are reacting. equityclock.com/2022/05/04/… $IEF $TLT $AGG $TNX $USD.X $USDOLLAR $UUP
Nike $NKE a Dow Jones Industrial Average stock moved below $116.75 extending an intermediate downtrend.
Accenture $ACN an S&P 100 stock moved below $296.48 extending an intermediate downtrend.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for May 5th 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for May 5th 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for May 5th 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)
S&P 500 Momentum Barometers
The intermediate term Barometer plunged 18.44 to 30.46 yesterday. It returned to Oversold on a drop below 40.00.
The long term Barometer dropped 6.41 to 36.67 yesterday. It returned to Oversold on a drop below 40.00.
TSX Momentum Barometers
The intermediate term Barometer dropped 8.98 to 23.74 yesterday. It remains Oversold.
The long term Barometer dropped 7.99 to 42.92 yesterday. It remains Neutral. Trend is 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.
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May 6th, 2022 at 7:41 am
Techtalk and Equity Clock point today to a coming unwind of the bond decline. In the last week of April I posted David Rosenberg’s comments about the greater than two standard deviations in the chart being so excessive that risk reward is high. I interpret this as pointing to a coming bottom in the equity market as well.
May 6th, 2022 at 10:00 am
AMD – Out of all of tech this is up this morning. Great value and great multi-year low point to buy.
May 6th, 2022 at 10:13 am
Larry, Yes I would not be surprised to see TLT turn around right here, today,
or it could go down to 110, or to 100, and then turn around. The bitter truth is that nobody really knows. But for those who have been short TLT since 150, or 140, or 130, or 120, they will either hold on to see what happens, or they can ring the register today.
https://stockcharts.com/h-sc/ui?s=TLT&p=D&yr=5&mn=0&dy=0&id=p58095384287
HCG.to reported stellar earnings a couple days ago. Nevertheless, the stock is saying that the future may not be so great. This is a direct interest rate story, just like TLT.
https://stockcharts.com/h-sc/ui?s=HCG.TO&p=D&yr=5&mn=0&dy=0&id=p67105469467
May 6th, 2022 at 10:46 am
Rol Lew – I already heard a large fund manager state at least a week ago that he exited short TLT positions. I don’t comment on this from the perspective of trying to buy TLT but simply as a piece of the puzzle trying to predict a coming equity market reversal.
May 6th, 2022 at 11:18 am
Larry,
Yes it is hard to predict what bonds will do with the continuing increases in interest rates around the world. If it were easy, we would all be well so off already. I myself am dreaming that with the next fed hike or two, the markets will tank really hard, Powell will freak out like they did in 2018, reverse course, and bonds will rally, like they did at the end of 2018. Could happen. Maybe this is what Rosenberg is thinking? But nobody really knows what or when. In the meantime I have chosen to go with the flow.
Tech, bonds and banks do not look so good right now. (Click to One Year Charts). But yes, they will all turn around at some point, and Rosenberg will be “right”, at some point.
https://stockcharts.com/freecharts/candleglance.html?TLT,TBT,HCG.TO,EQB.TO,TD.TO,AMD,FB,TSLA,QQQ,SPY,NVDA,LRCX,|D|0
May 6th, 2022 at 4:29 pm
AMD – Use a three year chart. It is a stellar grower of earnings. The forward PE is a measly 21 and for that kind of growth. It’s a bargain. Chips are going to be in high demand for years. There hasn’t been a good entry point like this in years for AMD. It’s just my opinion.
May 7th, 2022 at 2:52 pm
So where do we invest? It’s sounds like it’s a global inflation. I read that it’s like back in Paul Volker times. Back then it was opec not producing and noe it’s a war with sanctions on Russia. If inflation last a long time people are going to pull money out of their funds just to stay alive. Americans don’t have any savings.
May 7th, 2022 at 4:59 pm
David,
“Where” is Question #1
“When” is not far behind, in keeping with the purpose of this site.
I believe that a big opportunity is now in the making.
In the 2008-2009 recession, many stocks sold off, but then in March 2009, many began to come back. I guarantee 99.9% that after this sell off, there will be a turnaround at some point. Unfortunately, the people who know exactly when the turnaround will happen this time, do not post on this site, so we will just have to figure that out each of us, for ourselves. In the meantime, I have picked a stock or two to watch – long established, Canadian, profitable companies, dividend payers, that sold off in 2008-2009, but managed to come back very nicely.
May 7th, 2022 at 6:17 pm
Rol Lew,
If no one knows when the bottom is going to be, why are you watching your two companies and not buying on the way down? Cost averaging.
May 8th, 2022 at 12:39 am
These Indicators are always worth paying attention to………….
https://www.cnn.com/markets/fear-and-greed
May 8th, 2022 at 5:46 am
David,
Agreed, DCA is one answer for the “How”.
We each have to figure it out for ourselves.
There are always many alternatives & they are always confusing in the moment.
If you have a good secure income from employment, pension or rentals, then you
can sell all your stocks and sit it out. But if you rely on income from dividends to survive, then you don’t dare sell anything. Some dividend payers rarely cut their dividend even in bad times.
But if you are inclined to be a trader your answers will likely be different from DCA, with or without dividends. We each have to figure it out for ourselves.
May 8th, 2022 at 4:10 pm
#10,
RonBC,
Thanks for the fear & greed read. I never would of thought that CNN aka “fake news” would have something worth reading.
May 8th, 2022 at 4:18 pm
David
Well just like Joe Friday in the show Dragnet used to say, “Just the facts ma’am.” I don’t judge where info is coming from if it makes sense and is compatible with other sources.
May 8th, 2022 at 5:34 pm
The Weekly $COMPQ is starting to get interesting. Price is only 845pt above its 200 which has a good track record of catching price lows. Add to that being very oversold I would have my finger on the “cover” button if short. A quick plunge below 11000 would likely see just as quick a rebound back above 11000 again.
The Weekly $SPX is also oversold and 500pts above its 200ema. Nothing positive about the chart yet.
https://stockcharts.com/h-sc/ui?s=%24COMPQ&p=W&yr=20&mn=0&dy=0&id=p30330379621&a=1092908250
https://stockcharts.com/h-sc/ui?s=%24SPX&p=W&yr=20&mn=0&dy=0&id=p91123533216&a=673066405