Tech Talk for Monday August 1st 2022

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The Bottom Line

North American equity markets extended their intermediate uptrends last week. Strongest broadly based U.S. equity index was the NASDAQ Composite Index. The TSX Composite joined the trend by moving above its 50 day moving average on Friday.

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Earnings and Revenue Outlook for S&P 500 companies

Consensus earnings and revenue estimates for S&P 500 companies on a year-over-year basis in the second quarter of 2022 increased significantly again last week. Results have been reported by 56% of S&P 500 companies to date. According to www.FactSet.com consensus for second quarter earnings on a year-over-year basis calls for an increase of 6.0% (versus 4.8% last week) and consensus for revenues calls for an increase of 12.3% (versus 10.9% last week).

Consensus earnings estimates for S&P 500 companies beyond the second quarter on a year-over-year basis dropped significantly again last week. According to www.FactSet.com earnings in the third quarter are expected to increase 6.7% (versus 9.2% last week) and revenues are expected to increase 9.4% (versus 9.8% last week). Earnings in the fourth quarter are expected to increase 6.7% (versus 8.7% last week) and revenues are expected to increase 6.9% (versus 7.4% last week). Earnings on a year-over-year basis for all of 2022 are expected to increase 8.9% (versus 9.8% last week) and revenues are expected to increase 10.7% (versus 10.8% last week).

 

Economic News This Week

June Construction Spending released at 10:00 AM EDT on Monday is expected to increase 0.3% versus a drop of 0.1% in May.

July ISM Manufacturing PMI released at 10:00 AM EDT on Wednesday is expected to dip to 52.9 from 53.0 in June.

June Factory Orders released at 10:00 AM EDT on Wednesday are expected to increase 0.4% versus a gain of 1.6% in May.

July ISM Non-manufacturing PMI released at 10:00 AM EDT on Wednesday is expected to drop to 54.0 from 55.3 in June.

June US Trade released at 8:30 AM EDT on Thursday is expected to be a deficit of $82.2 billion versus a deficit of $85.6 billion in May.

July Non-farm Payrolls released at 8:30 AM EDT on Friday is expected to drop to 255,000 from 372,000 in June. July Unemployment Rate is expected to remain unchanged from June at 3.6%. July Average Hourly Earnings are expected to increase 0.3%, unchanged from June.

July Canadian Employment released at 8:30 AM EDT on Friday is expected to increase 23,500 versus a drop of 43,200 in June.

 

Selected Earnings News This Week

Another 152 S&P 500 companies (including two Dow Jones Industrial Average companies) and 10 TSX 60 companies 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 July 29th 2022

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for July 29th 2022

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Green: Increase from previous day

Red: Decrease from previous day


Sectors

Daily Seasonal/Technical Sector Trends for July 29th 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 offered by valued providers

Greg Schnell offers “NASDAQ month-end analysis

Nasdaq Month-End Analysis | The Canadian Technician | StockCharts.com

 

Mark Leibovit discusses “US Recession, Interest Rates, Inflation, Gold and Silver”.

US Recession, Interest Rates, Inflation, Gold, Silver – HoweStreet

 

Michael Campbell’s Money Talks

July 30th Episode (mikesmoneytalks.ca)

 

David Keller discusses “Why breadth is bullish for now”.

Why Breadth is Bullish… For Now | The Mindful Investor | StockCharts.com

 

Mary Ellen McGonagle says “July ends with a bang as rotation into new areas takes shape”.

July Ends With a Bang as Rotation into New Areas Takes Shape | The MEM Edge | StockCharts.com

 

Links offered by Mark Bunting and www.uncommonsenseinvestor.com

"If You Have Money Put It In the Stock Market" – Uncommon Sense Investor

"There’s No Rush to Call a Market Bottom" – Uncommon Sense Investor

10 Best Low Volatility Stocks to Buy – Kiplinger

Three Good Inflation Stocks – Morningstar

Five Gold Stocks Worth Their Weight – Kiplinger

Cyclical Sectors Next Shoe to Drop with TSX Vulnerable – David Rosenberg, Financial Post

Morgan Stanley: This Post-Fed Rally is a Trap – Business Insider

Josef Schachter asks “Will US Recession Drive Gasoline Prices Down”?

Will US Recession Drive Gasoline Prices Down? – HoweStreet

 

Victor Adair’s Trading Desk Notes for July 30th

https://victoradair.ca/trading-desk-notes-for-july-30-2022/

 

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 for Friday

Technology SPDRs $XLK moved above $143.06 extending an intermediate uptrend.

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US Broker iShares $IAI moved above intermediate resistance at $92.90.

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US REIT iShares $IYR moved above $100.06 extending an intermediate uptrend.

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India ETF $PIN moved above intermediate resistance at $24.58

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Amazon $AMZN an S&P 100 stock moved above $128.99 extending an intermediate uptrend.

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Microsoft $MSFT a Dow Jones Industrial Average stock moved $277.69 extending an intermediate uptrend.

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Other S&P 100 breakouts on Friday:

Southern Companies $SO moved above $76.53 extending an intermediate uptrend

Xcel Energy $XEL moved above $72.72 resuming an intermediate uptrend.

American Tower $AMT moved above $269.92 extending an intermediate uptrend.

Duke Energy $DUK moved above $109.79 resuming an intermediate uptrend.

General Motors $GM moved above intermediate resistance at $36.13

General Dynamics $GD moved above $226.69 resuming an intermediate uptrend.

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NASDAQ 100 breakouts on Friday:

KLA Tencor $KLAC moved above $372.34 and $385.64 extending an intermediate uptrend.

eBay $EBAY moved above $49.30 extending an intermediate uptrend.

Autodesk $ADSK moved above intermediate resistance at $214.24

CDW $CDW moved above $178.88 extending an intermediate uptrend.

Workday $WDAY moved above $153.08 completing a double bottom pattern.

Twitter $TWTR moved above intermediate resistance at $41.29.

Analog Devices $ADI moved above $170.76 extending an intermediate uptrend.

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Intel $INTC an S&P 100 stock moved below $40.73 extending an intermediate downtrend.

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Comcast $CMCSA an S&P 100 stock moved below $37.31 extending an intermediate downtrend.

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Manulife Financial $MFC.TO a TSX 60 stock moved above $23.30 completing a double bottom pattern.

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Canadian “gassy” stocks continue to advance with higher natural gas prices. ARC Resources $ARX.TO moved above intermediate resistance at $17.64.

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Algonquin Power $AQN.TO a TSX 60 stock moved above $17.87 setting an intermediate uptrend.

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Teck Resources $TECK.B.TO a TSX 60 stock moved above Cdn$36.44 completing a double bottom pattern.

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S&P 500 Momentum Barometers

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The intermediate term Barometer added 2.60 on Friday and 20.80 last week to 77.00. It changed last week from Neutral to Overbought on a move above 60.00. Trend remains up.

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The long term Barometer added 2.20 on Friday and 14.00 last week to 36.80. It remains Oversold. Trend remains up.

 

TSX Momentum Barometers

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The intermediate term Barometer added 8.82 on Friday and 21.42 last week to 61.34. It changed from Oversold to Overbought on a move above 60.00. Trend remains up.

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The long term Barometer added 1.68 on Friday and 10.09 last week to 37.82. It remains Oversold. Trend remains 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




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