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Tech Talk for Monday November 16th 2015

 

Economic News This Week

November Empire State Manufacturing Index to be released at 8:30 AM EST on Monday is expected to improve to -6.0 from -11.4 in October.

October Consumer Prices to be released at 8:30 AM EST on Monday is expected to increase 0.2% versus a decline of 0.2% in September. Excluding Food and Energy, October Consumer Prices are expected to increase 0.2% versus a gain of 0.2% in September.

October Industrial Production to be released at 9:15 AM EST on Tuesday is expected to increase 0.1% versus a 0.2% decline in September. October Capacity Utilization is expected to remain unchanged at 77.5%.

October Housing Starts to be released at 8:30 AM EST on Wednesday is expected to slip to 1,173,000 units from 1,206,000 units in September.

FOMC Meeting Minutes for the October 28th meeting are scheduled to be released at 2:00 PM EST on Wednesday.

Weekly Initial Jobless Claims to be released at 8:30 AM EST on Thursday are expected to slip to 272,000 from 276,000 last week.

November Philadelphia Fed Index to be released at 10:00 AM EST on Thursday is expected to improve to -1.0 from -4.5 in October.

October Leading Economic Indicators to be released at 10:00 AM EST on Thursday is expected to increase 0.6% versus a decline of 0.2% in September.

Canadian October Consumer Prices to be released at 8:30 AM EST on Friday are expected to remain unchanged from September (1.1% gain year-over-year).

Canadian September Retail Sales to be released at 8:30 AM EST on Friday are expected to increase 0.3% versus a gain of 0.5% in August.

 

Earnings News This Week

Tuesday: Home Depot, TJX Companies, Wal-Mart

Wednesday: Loblaw Companies, Lowes, Metro, Staples, Target

Thursday: Best Buy, Intuit, JM Smucker.

 

The Bottom Line

Last week was a rude awakening for the bulls that used October 28th as their signal to “buy the market”. Anticipation of the first increase in the Fed Fund rate became a reality. A major terrorist act in Paris over the weekend did not help. Economic sensitive stocks (Technology, Industrials, Materials) are market/outperform. That’s good news during the historic period of seasonal strength from November to April. However, it only means that these sectors are moving lower at a slower rate. The current correction is expected to offer an opportunity to purchase favoured seasonal plays at lower prices. The end of the correction is unlikely to occur until after the Fed announces its first increase. Watch for bottoming of short term momentum indicators before increasing equity exposure.

 

Equities

Significant changes have occurred since our last report on November 6th. Most of the changes were lower scores triggered by a change to negative momentum and moves below their 20 day moving average. Changes in technical scores were not provided because of the time gap from the previous report.

Daily Seasonal/Technical Equity Trends for November 13th 2015


Green: Increase from previous day

Red: Decrease from previous day

S&P 500 Index plunged 76.16 points (3.63%) last week. Intermediate trend remains up. The Index fell below its 20 day moving average. Short term momentum indicators are trending down.

Percent of S&P 500 stocks trading above their 50 day moving average plunged last week to 55.40% from 73.40% and established an intermediate downtrend.

Percent of S&P 500 stocks trading above their 200 day moving average dropped last week to 39.20% from 52.40%. Percent has established an intermediate downtrend.

Bullish Percent Index for S&P 500 stocks fell last week to 66.40% from 71.80%, but remained above its 20 day moving average. The Index has established an intermediate downtrend.

Bullish Percent Index for TSX Composite stocks fell last week to 42.11% from 47.37% and moved below its 20 day moving average. The Index has established an intermediate downtrend.

The TSX Composite Index plunged 477.90 points (3.53%) last week. Intermediate trend remains up (Score: 2). Strength relative to the S&P 500 Index remains negative (Score: -2The Index remains below its 20 day moving average (Score: -1). Short term momentum indicators are trending down (Score: -1), are oversold, but have yet to show signs of bottoming Technical score is -2

Percent of TSX stocks trading above their 50 day moving average dropped last week to 33.60% from 37.37%. Percent remains in an intermediate downtrend and is oversold, but signs of a bottom have yet to appear.

Percent of TSX stocks trading above their 200 day moving average dropped last week to 21.46% from 26.32%. Percent is trending down and is intermediate oversold, but has yet to show signs of bottoming.

The Dow Jones Industrial Average plunged 665.09 points (3.71%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index turned positive. The Average fell below its 20 day moving average. Short term momentum indicators are trending down. Technical score fell to 2.

Bullish Percent Index for Dow Jones Industrial Average stocks was unchanged last week at 86.67% and remained above its 20 day moving average.

Bullish Percent Index for NASDAQ Composite stocks dropped last week to 50.37% from 52.72%, but remained above its 20 day moving average. The Index is rolling over from a slightly overbought level.

The NASDAQ Composite Index plunged 219.24 points (4.26%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. The Index fell below its 20 day moving average. Short term momentum indicators are trending down. Technical score fell to 2.

The Russell 2000 Index dropped 53.20 points (4.43%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index improved to Neutral. The Index fell below its 20 day moving average. Short term momentum indicators are trending down. Technical score is 0.

The Dow Jones Transportation Average plunged 231.16 points (2.80%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index improved to Neutral. The Average fell below its 20 day moving average. Short term momentum indicators are trending down. Technical score is 0.

The Australia All Ordinaries Composite Index lost 157.90 points (3.00%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index improved to Neutral. The Index fell below its 20 day moving average. Short term momentum indicators are trending down. Technical score is 0.

The Nikkei Average gained 231.31 points (1.20%) last week. Intermediate trend remains Neutral. Strength relative to the S&P 500 Index improved to Positive. The Index remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score improved to 4.

Europe iShares dropped $1.40 (3.34%) last week. Intermediate trend remains Neutral. Strength relative to the S&P 500 Index remains negative. Units fell below their 20 day moving average. Short term momentum indicators are trending down. Technical score dropped to -4.

The Shanghai Composite Index slipped 9.19 points (0.26%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to positive. The Index remains above its 20 day moving average. Short term momentum indicators have turned mixed. Technical score is 5.

Emerging Markets iShares plunged $1.76 (4.99%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains negative. Units remain below their 20 day moving average. Short term momentum indicators are trending down. Technical score is -2.

 

Currencies

The U.S. Dollar Index slipped 0.16 (0.16%) last week. Intermediate trend remains up. The Index remains above its 20 day moving average. Short term momentum indicators are trending up, but are overbought.

The Euro gained 0.28 (0.26%) last week. Intermediate trend remains down. The Euro remains below its 20 day moving average. Short term momentum indicators are trending down, but are oversold and showing early signs of bottoming.

The Canadian Dollar slipped US 0.09 cents (0.15%) last week. Intermediate trend remains neutral. The Canuck Buck fell below its 20 day moving average. Short term momentum indicators are trending down, but are oversold.

The Japanese Yen added 0.36 (0.44%) last week. Intermediate trend turned down. The Yen remains below its 20 day moving. Short term momentum indicators are oversold and showing early signs of recovery.

 

Commodities

Daily Seasonal/Technical Commodities Trends for November 13th 2015

 

Green: Increase from previous day

Red: Decrease from previous day

The CRB Index plunged 6.26 points (3.28%) last week. Intermediate trend changed to down. Strength relative to the S&P 500 Index remains negative. The Index remained below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped to -6

Gasoline fell $0.14 per gallon (10.14%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index deteriorated to negative. Gas fell below its 20 day moving average. Short term momentum indicators are trending down. Technical score returned to -6

Crude Oil plunged $3.79 per barrel (8.51%) last week. Intermediate trend changed to down. Strength relative to the S&P 500 Index remains negative. Crude remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped to -6.

Natural Gas added $$0.02 per MBtu (0.85%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index turned positive on Friday. “Natty” moved above its 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score improved to 2.

The S&P Energy Index plunged 30.69 points (5.97%) last week. Intermediate trend changed to Neutral on Friday on a move below 481.27. Strength relative to the S&P 500 Index is Neutral. The Index fell below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped to -2.

The Philadelphia Oil Services Index dropped 7.92 points (4.33%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index is Neutral. The Index remained below its 20 day moving average. Short term momentum indicators are trending down. Technical score slipped to 0.

Gold eased $5.50 per ounce (0.51%) last week. Intermediate trend changed to Neutral. Strength relative to the S&P 500 Index remains negative. Gold remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score is -4.

Silver plunged $0.51 per ounce (3.46%) last week. Intermediate trend changed to Neutral. Strength relative to the S&P 500 Index and Gold remains Negative. Silver remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score is -4.

The AMEX Gold Bug Index slipped 0.25 (0.23%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains negative. The Index remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score is -2.

Platinum plunged $81.10 per ounce (8.60%) last week. Intermediate trend remains down. Relative strength remains negative. PLAT remains below its 20 day MA. Momentum: down.

Palladium plunged $82.05 per ounce (13.19%) last week. Trend changed to Neutral. Strength relative to the S&P 500 Index and Gold remains negative. PALL remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score: -4

Copper dropped $0.08 per lb (3.57%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Negative. Copper remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score: -6

The TSX Metals & Mining Index dropped 61.62 points (14.67%) last week. Intermediate trend remains Neutral. Strength relative to the S&P 500 Index remains Negative. The Index remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score is -4.

Lumber dropped 4.30 (1.74%) last week. Trend remains Neutral. Strength remains Neutral. Lumber fell below its 20 day moving average. Short term momentum indicators are mixed.

The Grain ETN dropped $1.27 (3.93%) last week. Trend changed to down. Relative strength is negative. Units moved below their 20 day moving average. Short term momentum indicators are trending down. Technical score is -6.

The Agriculture ETF slipped $1.10 (2.26%) last week. Intermediate trend changed to Neutral. Strength relative to the S&P 500 Index improved to Neutral on Friday. Units remain below their 20 day moving average. Short term momentum indicators are trending down. Technical score:-2.

 

Interest Rates

The yield on 10 year Treasuries slipped 5.3 basis points (2.37%) last week. Intermediate trend remains up. Yield remains above its 20 day moving average. Short term momentum indicators are overbought and showing early signs of rolling over.

Conversely, price of the long term Treasury ETF added $0.68 (0.57%) last week. Intermediate trend is down. Units remain below their 20 day moving average.

 

Other Issues

The VIX jumped 5.75 (40.13%) last week. The Index moved above its 20, 50 and 200 day moving averages.

Earnings focus this week is on the retail sector.

Economic news this week is expected to be mildly encouraging (Empire Index, CPI, Industrial Production, Philadelphia Fed Index, Leading Indicators).

Short and intermediate technical indicators generally are trending down and are oversold. However, technical indicators showing a bottom have yet to appear.

International events will have an influence. Equity markets around the world are expected to open lower this morning following the terrorist event in Paris over the weekend. The G20 meeting in Turkey also is a focus.

Daily Seasonal/Technical Sector Trends for November 13th 2015


Green: Increase from previous day

Red: Decrease from previous day

 

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Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices. To login, simply go to http://www.equityclock.com/charts/

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Disclaimer: Seasonality and technical ratings offered in this report by www.timingthemarket.ca and 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.