Pre-opening Comments for Friday April 5th
U.S. equity index futures were higher this morning. S&P 500 futures were up 16 points at 8:35AM EDT.
S&P 500 futures added 8 points following release of the March Employment Report at 8:30 AM EDT. Consensus for March U.S. Non-farm Payrolls was a drop to 212,000 from 275,000 in February. Actual was an increase to 303,000. Consensus for the March Unemployment Rate was unchanged from February at 3.9%. Actual was a slip to 3.8%. Consensus for March Average Hourly Earnings was an increase of 0.3% versus a gain of 0.1% in February. Actual was an increase of 0.35%. On a year-over- year basis, consensus for March Average Hourly Earnings was an increase of 4.1% versus a gain of 4.3% in February. Actual was an increase of 4.1%.
The Canadian Dollar dropped 0.32 to US73.42 cents following release of Canada’s March Employment Report at 8:30 AM EDT. Consensus for March Employment Change was a gain of 25,900 versus a gain of 40,700 in February. Actual was a drop of 2,200. Consensus for the March Unemployment Rate was an increase to 5.9% from 5.8% in February. Actual was an increase to 6.1%.
Kara Sushi gained $7.40 to $111.25 after reporting higher than consensus second quarter revenues. The company also offered positive third quarter guidance.
![clip_image001[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/04/clip_image0011-3.png "clip_image001[1]")
Shockwave Medical added $4.51 to $324.63 on news that Johnson & Johnson has offered to acquire the company in a deal valued at $13.1 billion.
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/04/clip_image0021-4.png "clip_image002[1]")
Technical Notes
Taiwan iShares $EWT moved above $49.15 to a two year high extending an intermediate uptrend.
South Africa iShares $EZA moved above $39.94 and $40.03 extending an intermediate uptrend. Responded to higher gold prices.
Copper Miners ETF $COPX moved above $44.61 to a 13 year high extending an intermediate uptrend.
Meta Platforms $META an S&P 100 stock moved above $523.57 to an all-time high extending an intermediate uptrend.
Breakdowns below intermediate support by five stocks in the Dow Jones Industrial Average triggered a move by the Average below its 20 and 50 day moving averages: Salesforce.com on a move below $293.77 completing a double top pattern, Johnson & Johnson on a move below $153.67 completing a double top pattern, Visa on a move below intermediate support at $276.16, Starbucks on a move below $88.19 and Amgen on a move below $268.17.
US Medical Devices iShares $IHI moved below $56.49 completing a double top pattern.
Royal Bank $RY.TO a TSX 60 stock moved above Cdn$136.67 to an all-time high extending an intermediate uptrend.
Constellation Software $CSU.TO a TSX 60 stock moved below Cdn$3,561.12 setting an intermediate downtrend.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for April 4th 2024
Green: Increase from previous day
Red: Decrease from previous day
Source for all positive seasonality ratings: www.EquityClock.com
Commodities
Daily Seasonal/Technical Commodities Trends for April 4th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for April 4th 2024
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
These Sectors Are Poised to Lead in Q2: David Keller
These Sectors Are Poised to Lead in Q2 – YouTube
When Stocks Turn To Dust, In Gold We Trust: Jeff Huge
When Stocks Turn To Dust, In Gold We Trust – YouTube
Spot Big Reversals Using the ADX Indicator: Joe Rabil
Spot Big Reversals Using the ADX Indicator – YouTube
Commodities: "Let’s go for a Ride, It’s a Bull Market!" Tom Bowley
Commodities: "Let’s go for a Ride, It’s a Bull Market!" – YouTube
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 7.00 to 68.00. It remains Overbought. Daily trend has turned down.
The long term Barometer dropped 1.60 to 78.60. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer slipped 0.89 to 61.61. It remains Overbought. Daily trend has turned down.
The long term Barometer was unchanged at 70.54. It remains Overbought.
Disclaimer: Seasonality ratings 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
|
|
April 5th, 2024 at 2:30 pm
IMO the market needs the 50 day MA to catch up on SPX We probably need another two weeks or so of sideways churn or a drop in price which at present would be 4%. You can’t argue with the jobs report pointing to a booming US economy and continued earnings growth for companies. This is not a set-up for the bottom to fall out of the market. On top of that historically in every calendar year that the market has been up consecutively for the first three months it has produced substantial positive returns for the next nine months 100% of the time. The interesting question now is how and when does the Fed actually cut rates. It’s looking increasingly distant while Canada looks like a comparative basket case which is somewhat distressing.
April 5th, 2024 at 4:52 pm
Further to Larry/ON comments : ” Canada is a comparative basket case”. I am taking a hard look at the $CAD and see that it can’t even rally during a commodity boom. I don’t think that bods well for the intermediate future of the $CAD. I have slowly been trading into the $USD over the last couple of years. (I don’t have longterm confidence in it either – political divisivness). Sorry, I am not talented enough to attach a chart, and it would probably look like crap LOL. I am just hoping that RonBC and some other minds may want to provide their comments on $CAD.
Also any comments on Canadian bonds – XBB and XLB? My thoughts are that Canada is going to have to start lowering rates before the US, because of our abysmal economic numbers and our mortgage resets that are hitting people hard. Is there a trade into bonds that could be profitable? That lowering of rates, will hit the $CAD too. Any and all thoughts, comments, graphs -welcomed.
April 5th, 2024 at 8:17 pm
Sharron/B.C.
Here is a chart of $CDW plus a smaller chart above of $CDW:$USD to show the relative performance of them. The $CDW topped out in 2011 and has been in an overall downtrend ever since. I don’t think that will ever change much as the lower the $CDW the cheaper the goods from the U.S are for Canadians. The 2016 low and 2020 low are support levels. I’ve always preferred U.S holdings myself as I’ve never really trusted the Canadian market. I don’t think it is monitored as closely. Here is also a seasonality chart which can also be helpful.
https://stockcharts.com/h-sc/ui?s=%24CDW&p=W&yr=20&mn=0&dy=0&id=p22781273843&a=1081737333
https://stockcharts.com/h-sc/ui?s=%24CDW&p=W&yr=20&mn=0&dy=0&id=p22781273843&a=1081737333
April 5th, 2024 at 11:19 pm
#3 Ron you meant to say the opposite. The higher the US$ the more we pay.
On the other hand we get more for our exported resources such as oil&metals as they are priced in US$.
April 6th, 2024 at 1:20 am
Dutchcanuck
#4. Yes, that’s what I was thinking,thanks. I was going to say the cheaper the CD$ the more goods we sell to the U.S. Must countries watch their currencies closely and try to keep them low enough that they can be very competitive without changing their workforce.
April 6th, 2024 at 3:04 pm
SharonBC
Welcome to this board and thanks for your comments.
Here is a weekly chart of XLB.TO. To me it looks like it is in a long-term downtrend. It is also in a down trend relative to the shorter-term bond XBB.TO that you mentioned. What you say about the BOC lowering rates ahead of the US makes sense but it does not seem that the market is thinking that way. The yield on XLB.to is 3.99% which is higher than the XBB.TO at 3.17%. These rates are well below what you can get on a money market fund so that is not enough of a reason to buy them. But if rates are lowered, then the bonds will rise. I don’t find the potential reward worth the risk currently.
As you can see, XLB.TO is also in a downtrend relative to the Canadian stock market ETF: XIU.TO. The latter is what is benefitting from the current up tick in commodities. I wouldn’t call it a boom just yet. I have heard a number of commodity and currency traders comment that the loonie is no longer considered a petro currency. Have you thought of buying the XIU.TO or a commodity ETF like DBC, or the big oil ETF: XLE, both of which trade in the US. There are easier ways to make money than trading currencies unless you trade futures and are willing to give up on sleep. LOL
https://schrts.co/gPNWTWWB
https://schrts.co/hSNrYPja
April 6th, 2024 at 8:55 pm
Thank you to both RonBC and Paula for the charts and your comments – much appreciated. Yes, I have purchased the ETF COM – with is a basket of commodities, that has been a good buy for me.
April 6th, 2024 at 10:40 pm
Paula & Sharon
I have found nothing beats speculating in real estate. You can make tens of thousands of dollars in a short time if you pick your spots and don’t mind doing a little work on them. I like putting cash in non taxable TFSAs as well. Perhaps you two or others can accomplish the same results as with real estate profits in the stock market. Any ideas???
April 7th, 2024 at 2:23 am
I see all the Canadian Real Estate ETF 10 year charts are almost identical. None are looking too bullish either.
April 7th, 2024 at 1:26 pm
Here is one of the top 10 real estate ETFs. They all look much the same. I overlaid the CD$ just out of interest.
https://stockcharts.com/h-sc/ui?s=MREL.TO&p=D&yr=10&mn=0&dy=0&id=p80507220051&a=1650426738
April 7th, 2024 at 4:50 pm
SharonBC
I have never heard of COM but when I looked it, I noticed that it is very similar to DBC but has very low volume by comparison. Congratulations on owning that one!
Ron/BC
I know your favourite speculation is real estate and you have done well with it. Congratulations! The way you do it is fine for you and I understand how you manage to avoid the taxes but moving that frequently is not for everyone. I believe that everyone should own their own home but that is not the same as speculating in real estate. I have voiced my objections to this before but the main one is that it is not liquid. You can’t get out of it with the push of a button but, of course, you can with real estate funds. Years ago, I looked at the real estate ETFs in Canada and did not find them attractive but of course, they have had their ups and downs. I know that some REITS have done well but I am not willing to buy individual REITS. I have never heard of MREL.TO and the volume on it is really low. So not for me.
There are so many choices available these days with diverse ETFs that will lessen the risk (and reward), so I am trying to focus on a few choices, waiting for what seem like good opportunities and staying with a trend for as long as possible.
Since you ask for ideas, here is an ETF that is benefiting from the up tick in base metals. I have been following XBM.TO for some time and currently still own some but have also been selling on the way up. Now is probably not the time to buy but I may buy more if there is a correction and the trend is still up. It is not very high volume but good enough for me.
It is good to see some more activity in the comments section on this board lately.
https://schrts.co/tFvYeZHc
April 7th, 2024 at 4:51 pm
SharonBC
I have never heard of COM but when I looked it, I noticed that it is very similar to DBC but has very low volume by comparison. Congratulations on owning that one!
Ron/BC
I know your favourite speculation is real estate and you have done well with it. Congratulations! The way you do it is fine for you and I understand how you manage to avoid the taxes but moving that frequently is not for everyone. I believe that everyone should own their own home but that is not the same as speculating in real estate. I have voiced my objections to this before but the main one is that it is not liquid. You can’t get out of it with the push of a button but, of course, you can with real estate funds. Years ago, I looked at the real estate ETFs in Canada and did not find them attractive but of course, they have had their ups and downs. I know that some REITS have done well but I am not willing to buy individual REITS. I have never heard of MREL.TO and the volume on it is really low. So not for me.
There are so many choices available these days with diverse ETFs that will lessen the risk (and reward), so I am trying to focus on a few choices, waiting for what seem like good opportunities and staying with a trend for as long as possible.
Since you ask for ideas, here is an ETF that is benefiting from the up tick in base metals. I have been following XBM.TO for some time and currently still own some but have also been selling on the way up. Now is probably not the time to buy but I may buy more if there is a correction and the trend is still up. It is not very high volume but good enough for me.
It is good to see some more activity in the comments section on this board lately.
https://schrts.co/tFvYeZHc
April 7th, 2024 at 6:02 pm
Hi Paula, I chose COM ETF, because it does not issue a K1. Much better for income tax issues.
I agree with Ron and congratulate him – you have combined a personal skillset with a strong local real estate market.
The best investment I have made in the last 12 months – I purchased some high quality preferred shares last summer when they were beaten down – TD, Mfc, Enb. All were fixed resets, and have reset at Government of Canada 5 Year +. The income for the next 5 years is now 8-9%, plus I am sitting on a very nice capital gain cushion(8-35%). I am always looking for the lower risk opportunities.
April 8th, 2024 at 1:56 am
xxxxxxxx
April 8th, 2024 at 2:06 am
As far as the metals ETF:XBM.to goes here is a chart of it with a ratio chart of XBM.to:DBB above. At 21 resistance now and overbought it may back off unless it has the power to breakout. Not a good risk to reward trade now. But the ratio chart is doing well. Look up the top 10 real estate ETFs on Google and they are all about the same chart.
https://stockcharts.com/h-sc/ui?s=XBM.TO&p=D&yr=2&mn=0&dy=0&id=p09982946664&a=713584786
April 8th, 2024 at 2:07 am
Paula
Well if you haven’t heard the B.C. Premier & his government (NDP of course) just brought in legislation against not just home speculators but anyone buying a home and selling it over the next 2 years. In fact they back dated the law to catch those speculators who bought last year. If they sell it for more than they bought it for there will be a 20% tax on the profit. Typical Socialists. There are exceptions of course but everyone will be monitored who buys and sells a property now in B.C. Reminds me of the Animals song “We gotta get outta this place.” But I do watch the market always and get all the new listings daily. But I haven’t found anything too exciting for some time now. In fact prices on condos have fallen here over the last year. And with interest rates rising so much it’s not a great time to buy a home. But that’s fine as I like my place now anyways and don’t mind waiting to sell. I own it outright so only have the strata fees to pay monthly. And now that any type of discrimination is banned I could rent my place out for top dollar to anyone with screaming kids and move on.