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Tech Talk for Monday April 18th 2016

 

Economic News Released This Week

March Housing Starts to be released at 8:30 AM EDT on Tuesday are expected to slip to 1,170,000 units from 1,178,000 units in February.

March Existing Home Sales to be released at 10:00 AM EDT on Wednesday are expected to increase to 5.30 million from 5.08 million in February

Weekly Initial Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to increase to 263,000 from 253,000 last week.

April Philadelphia Fed Index to be released at 8:30 AM EDT on Thursday is expected to slip to 9.9 from 12.4 in March.

March Leading Economic Indicators to be released at 10:00 AM EDT on Thursday are expected to increase 0.4% versus a gain of 0.1% in February.

Canadian March Consumer Prices to be released at 8:30 AM EDT on Friday are expected to increase 0.4% versus a gain of 0.2% in February. On a year-over-year basis, March CPI is expected to increase 1.3% versus a gain of 1.4% in February.

February Retail Sales to be released at 8:30 AM EDT on Friday are expected to decline 0.8% versus a gain of 2.1% in January.

 

Earnings News This Week

 

The Bottom Line

Two strategies: Short term traders can take profits where momentum has rolled over. Investors holding seasonal opportunities lasting until at least May can buy on weakness when short term momentum indicators show signs of bottoming.

Interesting Observations

Economic news this is expected to be mixed: Better Leading Indicators, but weaker Philly Fed and Housing Starts

First quarter earnings pour in this week: 109 S&P 500 stocks and 14 Dow Jones Industrial Average companies are scheduled to report. Responses to reports to date have been modestly positive thanks to slightly higher than consensus results released by Morgan Stanley, Bank of America and Wells Fargo. Expectations remain low. Ninety four S&P 500 companies have issued negative first quarter guidance and 27 companies have issued positive guidance.

According to FactSet, earnings on a year-over-year basis are expected to decline 9.3% in the first quarter and 2.9% in the second quarter, but a gain of 3.6% in the third quarter and a gain of 10.8% in the fourth quarter. Revenues are expected to decline 1.3% in the first quarter and 0.7% in the second quarter, but a gain of 2.0% in the third quarter and a gain of 4.3% in the fourth quarter.

Prospects for first quarter results by major Canadian companies are more encouraging. Consensus for TSX 60 companies shows an average (median) year-over-year gain of 1.2%.

Short and intermediate technical indicators for most equity markets and primary sectors are overbought and showing early signs of peaking.

Seasonal influences by most developed nation equity markets and economically sensitive sectors (Materials, Industrials, Technology) are positive until at least early May. However, sector rotation frequently changes between now and mid-February. Note changes in index and sector seasonality indicated below. On the other hand, European equity markets have started to show interesting outperformance, implying a possible extension of their seasonal strength into summer.

U.S. equity trends during U.S. Presidential election years are down between now and late May.

Technical action by S&P 500 stocks last week was exceptionally bullish: 70 stocks broke intermediate resistance levels and only 7 stocks broke support.

 

StockTwits Released on Friday @equityclock

Investors rotating away from defensive sectors as equities touch highs of the year.

Technical action by S&P 500 stocks to 10:00 AM: Quiet. Intermediate breakouts: $SCHW, $EXPD

Editor’s Note: After 10:00 AM, another five S&P 500 stocks broke resistance: CVC, BLL, PH, JOY, STX

 

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for April 15th 2016

 

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 gained 33.13 points (1.62%) last week. Intermediate trend remains up. The Index remains above its 20 day moving average. Short term momentum indicators are trending up.

Percent of S&P 500 stocks trading above their 50 day moving average increased last week to 89.00% from 84.60%. Percent remains intermediate overbought and peaked three weeks ago.

(Also known as the Momentum Barometer for the S&P 500 stocks)

Percent of S&P 500 stocks trading above their 200 day moving average increased last week to 66.60% from 60.40%. Percent is trending higher and is intermediate overbought.

Bullish Percent Index for S&P 500 stocks increased last week to 77.40% from 76.40% and recovered to above its 20 day moving average. The Index remains intermediate overbought.

Bullish Percent Index for TSX stocks increased last week to 66.95% from 63.60% and recovered back above its 20 day moving average. The Index remains intermediate overbought.

The TSX Composite Index gained 240.47 points (1.79%) last week. Intermediate uptrend was re-affirmed on a move above 13,685.45 to a three month high (Score: 2). Strength relative to the S&P 500 Index improved last week to Neutral (Score: 0) from Negative. The Index moved above its 20 day moving average (Score: 1). Short term momentum indicators are trending up (Score: 1). Technical score increased last week to 4 from -1.

Percent of TSX stocks trading above their 50 day moving average increased last week to 79.40% from 74.90%. Percent remains intermediate overbought and peaked 6 weeks ago.

(Also known as the momentum barometer for TSX stocks)

Percent of TSX stocks trading above their 200 day moving average increased last week to 63.09% from 56.07%. Percent remains intermediate overbought.

The Dow Jones Industrial Average gained 320.80 points (1.83%) last week. Intermediate trend remained up. Strength relative to the S&P 500 Index remained Neutral. The Average remained above its 20 day moving average. Short term momentum indicators turned higher. Technical score improved last week to 4 from 2

Bullish Percent Index for Dow Jones Industrial Average stocks remained at 90.00% last week, but moved below its 20 day moving average. The Index remains intermediate overbought and showing early signs of rolling over.

Bullish Percent Index for NASDAQ Composite stocks increased last week to 54.58% from 52.45% and remained above their 20 day moving average. The Index continues to trend higher, but is intermediate overbought.

The NASDAQ Composite Index added 87.53 points (1.80%) last week. Intermediate trend remained Neutral. Strength relative to the S&P 500 Index turned Positive from Neutral. The Index remained above its 20 day moving average. Short term momentum indicators turned higher. Technical score improved last week to 4 from 2.

The Russell 2000 Index gained 37.15 points (3.40%) last week. Intermediate trend remained Neutral. Strength relative to the S&P 500 Index changed last week to Positive from Neutral. The Index remained above its 20 day moving average. Short term momentum indicators turned higher. Technical score improved last week to 4 from 2.

The Dow Jones Transportation Average gained 241.88 points (3.13%) last week. Intermediate trend remained down. Strength relative to the S&P 500 Index improved last week to Neutral from Negative. The Average moved above its 20 day moving average last week. Short term momentum indicators turned higher. Technical score improved last week to 0 from -6.

The Australia All Ordinaries Composite Index added 206.11 points (4.11%) last week. Intermediate trend remains Neutral. Strength relative to the S&P 500 Index changed to Neutral from Negative. The Index moved above its 20 day moving average. Short term momentum indicators turned higher. Technical score improved last week to 2 from -4.

The Nikkei Average jumped 1,026.51 points (6.49%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index changed to Neutral from Negative. The Average moved above its 20 day moving average. Short term momentum indicators have turned up. Technical score improved last week to 0 from -6.

Europe 350 iShares gained 39.71 points (2.66%) last week. Intermediate trend changed to Up from Neutral on a move above $39.69. Strength relative to the S&P 500 Index improved to Neutral from Negative. Units moved above their 20 day moving average. Short term momentum indicators turned higher. Technical score improved last week to 4 from -4.

The Shanghai Composite Index added 93.16 points (3.12%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained Positive. The Index remained above its 20 day moving average. Short term momentum indicators have turned up. Technical score last week improved to 6 from 4.

Emerging Markets iShares gained $1.19 (3.57%) last week. Intermediate trend remains Up. Strength relative to the S&P 500 Index changed to Positive from Negative. Units moved above their 20 day moving average. Short term momentum indicators turned higher. Technical score improved last week to 6 from -2.

 

Currencies

The U.S. Dollar Index added 0.47 (0.50%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average. Short term momentum indicators have turned positive.

The Euro slipped 1.16 (1.02%) last week. Intermediate trend remains up. The Euro moved below its 20 day moving average. Short term momentum indicators are trending down.

The Canadian Dollar gained U.S. 2.00 cents (2.63%) last week. Intermediate trend remained up. The Canuck Buck remained above its 20 day moving average. Short term momentum indicators have turned higher.

The Japanese Yen fell 0.47 (0.51%) last week. Intermediate trend remains up. The Yen remains above its 20 day moving average. Short term momentum indicators are trending down.

 

Commodities

Daily Seasonal/Technical Commodities Trends for April 15th 2016

 

Green: Increase from previous day

Red: Decrease from previous day

 

The CRB Index added 2.60 points (1.52%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Positive from Negative last week. The Index moved above its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to 6 from -1.

Gasoline added $0.02 per gallon (1.37%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index improved last week to Positive from Neutral. Short term momentum indicators have turned mixed. Technical score improved last week to 5 from 3.

Crude Oil gained $1.99 per barrel (5.01%) last week. Intermediate trend was re-affirmed on a move above $42.49. Strength relative to the S&P 500 Index changed to Positive from Neutral. Crude remained above its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to 6 from 4.

Natural Gas dropped $0.09 per MBtu (4.52%) last week. Strength relative to the S&P 500 Index changed to Neutral from Positive. Gas dropped below its 20 day moving average. Short term momentum indicators have just turned down. Technical score dropped last week to 0 from 4.

The S&P Energy Index added 9.22 points (1.98%) last week. Intermediate uptrend was re-affirmed last week on a move above 476.10. Strength relative to the S&P 500 Index improved to Positive from Neutral. The Index remained above its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to 6 from 4.

The Philadelphia Oil Services Index gained 6.12 points (3.96%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Neutral from Negative. The Index moved above its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to 4 from -2.

Gold dropped $9.20 per ounce (0.74%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained Neutral. Gold dropped below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to 0 from 4

Silver gained $0.93 per ounce (6.05%) last week. Uptrend was re-affirmed on a move above $16.17 per ounce. Strength relative to the S&P 500 Index changed to Positive from Negative. Silver moved above its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to 6 from -1. Strength relative to Gold turned Positive.

The AMEX Gold Bug Index added 4.08 points (2.10%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. The Index remained above its 20 day moving average. Short term momentum indicators have just turned down. Technical score slipped to 4 from 6

Platinum added $21.50 per ounce (2.22%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed last week to Neutral from Negative. PLAT remained above its 20 day moving average. Short term momentum indicators are trending up. Score: 4

Palladium gained $29.60 per ounce (5.50%) last week. Relative strength remained Negative. PALL moved above its 20 day MA. Momentum is Positive. Score increased to 2 from 1

Copper added $0.06 per lb. (2.87%) last week. Intermediate trend remains Neutral. Strength relative to the S&P 500 Index remained Negative. Copper remained below its 20 day moving average. Short term momentum indicators have turned up. Technical score improved last week to -2 from -4.

The TSX Metals & Mining Index gained 42.50 points (10.36%) last week. Intermediate trend changed to Neutral from Down. Strength relative to the S&P 500 Index changed to Neutral from Negative. The Index moved above its 20 day moving average. Short term momentum indicators turned higher. Technical score improved last week to 2 from -6.

Lumber dropped $10.00 (3.44%) last week. Intermediate trend remains up. Strength relative remained Negative. Lumber remained below its 20 day MA. Momentum: down. Score:-2

The Grain ETN gained $1.16 (3.80%) last week. Trend changed to Up from Down. Relative strength improved to Positive from Negative. Units moved above their 20 day moving average. Short term momentum indicators have turned Positive. Technical score improved to 6 from -6.

The Agriculture ETF added $0.95 (2.07%) last week. Intermediate trend remains Up. Strength relative to the S&P 500 Index remained Negative. Units moved above their 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to 2 from -2.

 

Interest Rates

The yield on 10 year Treasuries increased 3.2 basis points (1.86%) last week. Intermediate trend remains down. Yield remains below its 20 day moving average. Short term momentum indicators have just turned higher.

Price of the long term Treasury ETG slipped $0.13 (0.10%) last week. Intermediate trend remains up. Price remains above its 20 day moving average.

 

Volatility

The VIX Index dropped 1.74 (11.33%) last week. Intermediate trend remains down.

 

Sectors

Daily Seasonal/Technical Sector Trends for March April 15th 2016

 

Green: Increase from previous day

Red: Decrease from previous day

 

Special Free Services available through www.equityclock.com

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/ Following is an example:

 

Sector Rotation in Mid-April

Many sectors with positive real returns at this time of year begin to underperform the S&P 500 Index. Accordingly, investors applying seasonal strategies are watching for early opportunities either to take seasonal profits on short term technical signs of rolling over or to switch to other sectors that continue to record positive relative as well as real returns. Following is the list:

 

Mark Lebovit’s Weekly Radio Show

WALL STREET RAW RADIO 4/16/16 WITH SINCLAIR NOE, LENNY ROTH, TROY DAYTON

Following is the link: http://tinyurl.com/hzpsaz9

 

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