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Tech Talk for Monday August 7th 2017

 

Don Vialoux on BNN’s Market Call Tonight on Friday

Following are links:

http://www.bnn.ca/video/don-vialoux-s-market-outlook~1182195 Market Outlook

http://www.bnn.ca/video/don-vialoux-s-top-picks~1182268 Top Picks

http://www.bnn.ca/video/don-vialoux-s-past-picks~1182238 Past Picks

Announcing a major update to the seasonal chart database

See: http://www.equityclock.com/2017/08/04/announcing-a-major-update-to-the-seasonal-chart-database/

 

Wall Street Raw Radio

JUMP ABOARD MARK LEIBOVIT AND HIS FINANCIAL TIME MACHINE – AUGUST 5, 2017

GUESTS INCLUDE:   ARCH CRAWFORD, JEFF BISHOP, KYLE DENNIS,  SINCLAIR NOE , HENRY WEINGARTEN,  LOWELL PONTE, HARRY BOXER AND HENRY WEINGARTEN

http://tinyurl.com/y8yh4sy4

 

The Bottom Line

Seasonal influences have a history of turning negative for a wide variety of equity indices and sectors at this time of year. The exception is the precious metal sector which continues to gain strength. Volatility remains unusually low for this time of year. When volatility moves higher during the next couple of months (as has happened in 20 of the past 20 periods from mid-June to mid-October), the expected correction will arrive. Holding a robust positon in cash continues to make sense.

 

Economic News This Week

July Canadian Housing Starts to be released at 8:15 AM EDT on Wednesday are expected to slip to 205,000 units from 213,207 in June.

Weekly Jobless Claims to be released on Thursday are expected to increase to 141,000 from 140,000 last week

July Producer Prices to be released at 8:30 AM EDT on Friday are expected to increase 0.1% versus a gain of 0.1% in June. Excluding food and energy, July Producer Prices are expected to increase 0.2% versus a gain of 0.1% in June.

July Consumer Prices to be released at 8:30 AM EDT on Friday are expected to increase 0.2% versus no change in June. Excluding food and energy, July Consumer Prices are expected to increase 0.2% versus a gain of 0.1% in June.

 

Earnings News This Week

 

Observations

Canadian equity markets are closed today for a civic holiday

Technical action by individual S&P 500 stocks was bearish again last week. Notable among stocks breaking resistance were Utility stocks. Notable among stocks breaking support were Consumer Discretionary and Industrial stocks. Number of stocks breaking resistance totaled 21 while number of stocks breaking support totaled 31. Number of stocks trading in an uptrend dropped to 279 from 277, number of stocks trading in a neutral trend slipped to 62 from 65 and number of stocks in a downtrend increased to 169 from 158. The Up/Down ratio dropped last week to (269/169=) 1.59 from 1.53.

The earnings and sales outlook for S&P 500 stocks remain promising: According to FactSet, 84% of companies have reported second quarter results to date. 72% reported higher than consensus earnings and 70% reported higher than consensus revenues. Accordingly, consensus for blended second quarter earnings on a year-over-basis for all companies increased last week to 10.1% from 9.1%. Consensus for blended second quarter revenues slipped to 5.1% from 5.2%. This week another 36 S&P 500 companies are scheduled to report (including 1 Dow Jones Industrial company). Beyond the second quarter, consensus by FactSet shows a 5.6% increase in third quarter earnings (down from 6.1% last week) and a 4.9% increase in revenues (up from 4.8% last week). Consensus for fourth quarter shows an 11.4% increase in earnings (down from 11.7% last week) and a 5.4% increase in revenues (up from 5.2% last week). For 2017, earnings are expected to increase 9.5% and revenues are expected to increase 5.5%.

Second quarter earnings reports for TSX 60 companies have been and are expected to continue to be impressive. On a year-over-year basis, earnings per share on average (median) were expected to increase 11.3%. Results to date show an increase of 11.5%.

Medium term technical indicators (Percent of stocks trading above their 50 day moving average, Bullish Percent Index) mostly are overbought and trending down.

Short term technical indicators (short term momentum, above/below 20 day moving average) were mixed last week for most equity markets, commodities and sectors.

The S&P 500 Index, Dow Jones Transportation Average, NASDAQ Composite Index, Russell 2000 Index and TSX Composite Index probably reached a seasonal peak on July 19th. Other than the Dow Jones Industrial Average, all recorded at least a small loss since July 19th . A correction lasting until mid-October is anticipated.

Seasonality on a wide variety of equity indices, commodities and sectors turned negative at the end of July.

Weakest months for equity markets are August and September. Current technical indicators for North American equity indices suggest that history is about to repeat.

The S&P 500 Index and Dow Jones Industrial Average have a history of moving significantly lower from August to October in years ending in 7.

The Dow Jones Industrial Average and S&P 500 Index have a history of moving lower between now and late October is Post-U.S. Presidential Election years.

‘Tis the season for gold, gold equities and related Exchange Traded Funds to move higher!

 

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for August 4th 2017

Green: Increase from previous day

Red: Decrease from previous day

 

Calculating Technical Scores

Technical scores are 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.

 

The S&P 500 Index added 4.73 points (0.19%) last week. Intermediate trend remains up. The Index remains above 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 (Also known as the S&P 500 Momentum Barometer) dropped last week to 63.20 from 66.20. Percent remains intermediate overbought and trending down

Percent of S&P 500 stocks trading above their 200 day moving average dropped last week to 73.00 from 75.80. Percent remains intermediate overbought and trending down.

Bullish Percent Index for S&P 500 stocks dropped last week to 69.40 from 72.60 and remained below its 20 day moving average. The Index remains intermediate overbought and trending down.

Bullish Percent Index for TSX stocks increased last week to 60.89 from 60.24, but remained below its 20 day moving average. The Index remains intermediate overbought and trending down.

The TSX Index gained 129.82 points (0.85%) last week. Intermediate trend remains down (Score: -2). Strength relative to the S&P 500 Index remains negative (Score: -2). The Index moved above its 20 day moving average (Score: 1). Short term momentum indicators have turned up (Score: 1). Technical score increased last week to -2 from -6.

Percent of TSX stocks trading above their 50 day moving average (Also known as the TSX Momentum Barometer) dropped last week to 45.38 from 50.21. Percent remains at a neutral level and trending down.

Percent of TSX stocks trading above their 200 day moving average slipped last week to 50.00 from 52.72. Percent remains intermediate neutral and trending down.

The Dow Jones Industrial Average gained another 262.50 points (1.20%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. The Average remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

Bullish Percent Index for Dow Jones Industrial stocks remained unchanged at 80.00 last week and remained below its 20 day moving average. The Index remains intermediate overbought.

Bullish Percent Index for NASDAQ Composite Index dropped last week to 60.20 from 63.01and dropped below its 20 day moving average. The Index remains intermediate overbought and trending down.

The NASDAQ Composite Index dropped another 23.12 points (0.36%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed last week to neutral from positive. The Index remained above its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to 2 from 4

The Russell 2000 Index dropped another 16.94 points (1.19%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains negative. The Index dropped below its 20 day moving average. Short term momentum indicators are trending down. Technical score slipped last week to -2 from 0.

Dow Jones Transportation Average added 50.56 points (0.55%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains negative. The Average remains below its 20 day moving average. Short term momentum indicators have just turned higher. Technical score improved last week to 0 from -2.

The Australia All Ordinaries Composite Index added 18.10 points (0.31%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains negative. The Index returned to below its 20 day moving average on Friday. Short term momentum indicators have turned down. Technical score dropped last week to -6 from -4.

The Nikkei Average slipped 7.51 points (0.04%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains negative. The Average remained below its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at -2.

Europe iShares added $0.55 (1.21%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed last week to positive from neutral. Units remained above their 20 day moving average. Short term momentum indicators turned higher. Technical score increased last week to 6 from 2.

The Shanghai Composite Index added another 8.84 points (0.27%) last week. Intermediate trend changed last week to up from down on a move above 3,295.19. Strength relative to the S&P 500 Index changed to positive from neutral. The Index remains above its 20 day moving average. Short term momentum indicators have just turned down. Technical score increased last week to 4 from 0.

Emerging Markets iShares added $0.20 (0.46%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained positive. Units remained above their 20 day moving average. Short term momentum indicators have turned down. Technical score slipped last week to 4 from 6

 

Currencies

The U.S. Dollar Index added 0.31 (0.33%) last week with the entire gains occurring on Friday. The Index remains below its 20 day moving average. Short term momentum indicators turned up on Friday.

The Euro added 0.22 (0.19%) last week despite a 0.96 fall on Friday. Intermediate trend remains up. The Euro remains above its 20 day moving average. Short term momentum indicators are overbought and showing early signs of rolling over.

The Canadian Dollar dropped US 1.42 cents (1.77%) last week. Intermediate trend remains up. The Canuck Buck moved below its 20 day moving average on Friday. Short term momentum indicators are trending down.

The Japanese Yen slipped 0.04 (0.04%) last week. Intermediate trend remained down. The Yen remained above its 20 day moving average. Short term momentum indicators are trending up, but are overbought and showing early signs of rolling over.

The British Pound slipped 0.12 (0.67%) last week. Intermediate trend remains up. The Pound remains above its 20 day moving average. Short term momentum indicators turned down on Friday.

 

Commodities and Related ETFs

Daily Seasonal/Technical Commodities Trends for August 4th 2017

Green: Increase from previous day

Red: Decrease from previous day

* Excludes adjustment from rollover of futures contracts

 

The CRB Index slipped 1.44 points (0.79%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. The Index remains above its 20 day moving average. Short term momentum indicators have turned down. Technical action slipped last week to 4 from 6.

Gasoline was unchanged last week. Intermediate trend changed to neutral from down on a move above 1.6693. Gas remains above its 20 day moving average. Short term momentum indicators have turned down. Technical score remained last week at 2.

Crude Oil slipped $0.13 per barrel (0.26%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. Crude remains above its 20 day moving average. Short term momentum indicators have turned down. Technical score slipped last week to 4 from 6.

Natural gas dropped $0.13 per MBtu (5.78%) last week. Intermediate trend changed to down from neutral on a move below $2.832. “Natty” remained below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -6 from -4.

S&P Energy Index dropped 5.00 points (1.02%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index remains neutral. The Index remains above its 20 day moving average. Short term momentum indicators have turned down. Technical score dropped last to 0 from 2.

The Philadelphia Oil Services Index dropped 1.24 points (0.92%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index remains neutral. The Index moved below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -2 from 0.

Gold dropped $3.80 per ounce (0.30%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index remains positive. Gold remains above its 20 day moving average. Short term momentum indicators have rolled over. Technical score slipped last week to 2 from 4

Silver dropped $0.44 per ounce (2.64%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index changed to neutral from positive on Friday. Silver dropped below its 20 day moving average on Friday. Short term momentum indicators have turned down. Technical score dropped last week to -4 from 2.

The AMEX Gold Bug Index dropped 4.54 points (2.31%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains positive. The Index remains above its 20 day moving average. Short term momentum indicators have rolled over. Technical score dropped last week to 0 from 2.

Platinum gained $32.40 per ounce (3.46%) last week. Trend turned up on a move above $969.50. Relative strength turned positive. Trades above its 20 day MA. Momentum trending up.

Palladium dropped $5.35 per ounce (0.61%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. PALL remains above its 20 day moving average. Short term momentum indicators have rolled over. Technical score dropped to 4 from 6.

Copper added 1.0 cents per lb. (0.35%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. Copper remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

BMO Base Metal ETF added $0.03 (0.28%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. Units remain above their 20 day moving average. Short term momentum indicators have rolled over. Technical score slipped last week to 4 from 6.

Lumber dropped $3.90 (1.03%) last week. Trend remains up. Relative strength dropped to neutral. Fell below its 20 day MA on Friday. Momentum turned down. Score dropped to 0

The Grain ETN dropped $1.31 (4.58%) 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. Score dropped to -2

The Agriculture ETF added $0.61 (1.07%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. Units remain above their 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

 

Interest Rates

Yield on 10 year Treasuries dipped 2.2 basis points (0.96%) last week. Intermediate trend remains down. Yield remains below its 20 day moving average. Short term momentum indicators are trending down.

Conversely, price of the long term Treasury Bond increased $1.04 (0.84%) last week. Intermediate trend remains up. Units moved above their 20 day moving average.

 

Volatility

The VIX Index slipped 0.26 (2.50%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average.

 

Sectors

Daily Seasonal/Technical Sector Trends for August 4th 2017

Green: Increase from previous day

Red: Decrease from previous day

 

StockTwits Released on Friday @EquityClock

S&P 500 Index: Possible topping pattern on the hourly charts presents downside risks toward 2,445. See http://www.equityclock.com/2017/08/03/stock-market-outlook-for-august-4-2017/

Fertilizer stocks moving above short term trading ranges: $AGU.CA $POT.CA $CF

Editor’s Note: Tis the season for strength in the sector!

Technical action by S&P 500 stocks to 10:00: Quiet. Breakouts: $WU $CF. Breakdown: $VIAB

Editor’s Note: After 10:00 AM EDT, breakouts included AEE and MCHP. Breakdown included WDC

Platinum ETN $PPLT moved above $92.55 completing a base building pattern

 

Disclaimer: Seasonality and technical ratings offered in this report 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