Tech Talk for Monday May 30th 2022

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The Bottom Line

Technical evidence that North American equity indices have passed an intermediate low appeared last week. Look for a bottoming process between now and the next FOMC meeting on June 14th-15th.

 

Observations

Consensus earnings estimates for S&P 500 companies on a year-over-year basis in the first quarter of 2022 virtually were unchanged last week. Ninety seven percent of companies have reported quarterly results to date. According to www.FactSet.com first quarter earnings on a year-over-year basis increased 9.2% (versus 9.1% last week) and revenues increased 13.6%.

Consensus earnings and revenue estimates for S&P 500 companies beyond the first quarter on a year-over-year basis also virtually were unchanged last week. According to www.FactSet.com second quarter earnings are expected to increase 4.1% and revenues are expected to increase 9.7%. Earnings in the third quarter are expected to increase 10.2% (versus 10.1% last week) and revenues are expected to increase 9.1% (versus 9.2% last week). Earnings in the fourth quarter are expected to increase 9.9% (versus 9.8% last week) and revenues are expected to increase 7.0%. Earnings on a year-over-year basis for all of 2022 are expected to increase 10.1% (versus 10.0% last week) and revenues are expected to increase 10.2%.

 

Economic News This Week

U.S. equity markets are closed today for the Memorial Day holiday.

Canadian March GDP to be released at 8:30 AM EDT on Tuesday is expected to increase 0.8% versus a gain of 1.1% in February.

May Chicago PMI to be released at 9:45 AM EDT on Tuesday is expected to increase to 57.1 from 56.4 in April.

April Construction Spending to be released at10:00 AM EDT on Wednesday is expected to increase 0.5% versus a gain of 0.1% in March.

May Manufacturing ISM PMI to be released at 10:00 AM EDT on Wednesday is expected to slip to 54.5 from 55.4 in April.

Bank of Canada announces its interest rate decision at 10:00 AM EDT Wednesday. The rate charged to major banks is expected to increase from 1.00% to 1.50%.

Beige Book is released at 2:00 PM EDT on Wednesday.

April Factory Orders to be released at 10:00 AM EDT on Thursday are expected to increase 0.8% versus a gain of 1.8% in March.

May Employment Report is to be released at 8:30 AM EDT on Friday. May Non-farm Payrolls are expected to drop to 310,000 from 428,000 in April. May Unemployment Rate is expected to remain at 3.6% set in April. May Average Hourly Earnings are expected to increase 0.4% versus a gain of 0.3% in April. On a year-over-year basis May Hourly Earnings are expected to increase 5.2% versus a gain of 5.5% in April.

May Non-Manufacturing ISM PMI to be released at 10:00 AM EDT on Friday is expected to slip to 56.0 from 57.1 in April.

 

Earnings News This Week

Only seven S&P 500 companies and one Dow Jones Industrial Average company (Salesforce.com) are scheduled to release quarterly results this week

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Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for May 27th 2022

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for May 27th 2022

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Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for May 27th 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)

 

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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Links provided by valued providers

Jane Gallina is “Searching For Bullish Trades in a Bear Market”

https://www.youtube.com/watch?v=FTuVxe6UI7g

 

Greg Schnell says “It’s all about a base”.

It’s All About A Base | The Canadian Technician | StockCharts.com

 

David Keller says “S&P and NASDAQ rip to new swing highs”

S&P and Nasdaq Rip to New Swing Highs | David Keller, CMT | The Final Bar (05.27.22) – YouTube

 

Mary Ellen Mcgonagle asks “Market low is in. Will it last?”

Market Bottom Is In! Will It Last? | Mary Ellen McGonagle | The MEM Edge (05.27.22) – YouTube

 

Michael Campbell’s Money Talks for May 28th

https://mikesmoneytalks.ca/may-28th-episode/?mc_cid=d40b1e3a9e&mc_eid=592546b4b5

 

Mark Bunting and www.uncommonsenseinvestor.com links

Bull Market Rhymes: Hi-lights from Howard Marks’ Latest Memo – Uncommon Sense Investor

7 Great GARP Stocks to Buy Now | Kiplinger

Wall Street Is Buying Treasuries Again in Bet Worst Is Over (yahoo.com)

An 8-Step Plan to Tackle a Bear Market | Morningstar

McCullough: Bear Markets Bounce On Low Volume (hedgeye.com)

 

Victor Adair’s Trading Notes for May 28th

https://www.howestreet.com/2022/05/trading-desk-notes-for-may-28-2022/

 

Technical Scoop for May 30th

https://enrichedinvesting.com/wp-content/uploads/2022/05/Memorial-signals-awaiting-confirmation-Russia-default-rising-prices-crisis-trigger-gas-high-toppy-yields.pdf

 

Technical Notes from Friday

Gasoline ETN $UGA moved above $72.50 to an all-time high extending an intermediate uptrend.

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Chile iShares $ECH moved above $30.00 extending an intermediate uptrend.

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Semiconductor ETF $SMH moved above $75.73 and semiconductor iShares SOXX moved above $421.87 completing a short term double bottom patterns

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Auto ETF $CARZ moved above $50.57 completing a short term double bottom pattern.

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U.S. Telecommunications iShares IYZ moved above $27.40 completing a short term reverse Head & Shoulders pattern.

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NASDAQ 100 and S&P 100 stocks that completed short term double bottom patterns included ADBE, LRCX, MRVL, NVDA, NXPI, SPLK, CHKP, ISRG, MCHP, FAST and SBUX

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Biotech ETFs $FBT $IBB $BBH moved above short term double bottom patterns setting uptrends.

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Eli Lilly LLY an S&P 100 stock moved above $312.95 extending an intermediate uptrend.

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Pembina Pipeline $PPL.TO, a TSX 60 stock moved above $51.02 to an all-time high extending an intermediate uptrend.

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Nutrien NTR.TO a TSX 60 stock moved below Cdn$120.25 completing a Head & Shoulders pattern

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S&P 500 Momentum Barometers

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The intermediate term Barometer advanced 14.43 on Friday and jumped 32.26 last week to 46.49. It changed from Oversold to Neutral on a recovery above 40.00. Trend is up.

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The long term Barometer added 4.41 on Friday and 12.03 last week to 38.68. It remains Oversold. Trend is up.

 

TS X Momentum Barometers

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The intermediate term Barometer added 3.96 on Friday and 9.35 last week to 32.60 It remains Oversold. Trend is up

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The long term trend added 2.20 on Friday and 6.76 last week to 40.97. It changed from Oversold to Neutral on a recovery above 40.00. Trend is 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.




3 Responses to “Tech Talk for Monday May 30th 2022”

  1. Larry/ON Says:

    WTI has now cleared 115 resistance with next resistance being the 129.44 high which was made in early March. You have to stay with the trade but there is always the possibility that a ceasefire in Ukraine or more remotely even a coup in Russia takes place that would throw a massive wrench into the energy bull market. The possibility of Russia suddenly trying to cut a deal to consolidate their gains would possibly come when we see their offensive peter out and Ukraine start to push them back.

  2. Larry/ON Says:

    EU immediate ban on Russian oil by tanker will amount to about 1.8 million bpd going by 2021 daily figures but the amount probably already decreased a lot. WTI should trade between 120 and 130 quite quickly. The next couple of weeks should be quite good for energy stocks.

  3. Ana Says:

    #1. Larry/ON

    $WTIC is rolling over. Examine the stochastics.

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