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Tech Talk for Monday October 5th 2015

 

Economic News This Week

September ISM Services to be released at 10:00 AM EDT on Monday are expected to slip to 58.0 from 59.0 in August.

August Trade Deficit to be released at 8:30 AM EDT on Tuesday is expected to increase to $44.5 billion from $41.9 billion in July.

Canadian August Merchandise Deficit is expected to increase to $900 million from $590 million in July.

September Housing Starts to be released at 8:15 AM EDT on Thursday are expected to slip to 200,000 from 217,000 in August

Weekly Initial Claims to be released at 8:30 AM EDT on Thursday are expected to slip to 275,000 from 277,000 last week.

FOMC Meeting Minutes for the September 17th meeting are to be released at 2:00 AM EDT on Thursday

Canadian September Employment is expected to increase 10,500 versus a gain of 12,000 in August. Canadian September Unemployment Rate is expected to slip to 6.9% from 7.0% in August

August Wholesale Inventories to be released at 10:00 AM EDT on Friday are expected to be unchanged versus a 0.1% drop in July.

 

Earnings News This Week

Tuesday: Pepsico, Yum Brands

Wednesday: Monsanto

Thursday: Alcoa

 

The Bottom Line

Start to accumulate attractive equities with favourable seasonality during the next two weeks, particularly on weakness. Most equity markets and economic sensitive sectors and commodities reached an intermediate low on or about August 25th. Volatility remains elevated. The September employment report did not help. Equity markets around the world appear to be forming a base building pattern that likely will continue to develop well into October until resumption of the traditional late October to early May period of seasonal strength resumes.

 

Equities

Daily Seasonal/Technical Equity Trends for October 2nd 2015


Green: Increase from previous day

Red: Decrease from previous day

The S&P 500 Index gained 20.02 points (1.04%) last week. Intermediate trend changed last week to neutral from up. The Index moved above its 20 day moving average on Friday. Short term momentum indicators are trending up.

Percent of S&P 500 stocks trading above their 50 day moving average increased last week to 30.80% from 20.40%. Percent bottomed on August 25th at 4.60% and continues to trend higher.

Percent of S&P 500 stocks trading above their 200 day moving average increased last week to 31.60% from 28.20%. Percent bottomed on August 25th and continues to trend higher.

Bullish Percent Index for S&P 500 stocks fell last week to 31.00% from 36.00% and remained below its 20 day moving average. The Index bottomed on August 25th

Bullish Percent Index for TSX Composite stocks increased last week to 32.79% from 32.39% and remained above its 20 day moving average. The Index reached a bottom on August 25th

The TSX Composite Index slipped 38.83 points (0.29%) last week. Intermediate trend remains down (Score: -2). Strength relative to the S&P 500 Index remains neutral (Score: 0). The Index remains below its 20 day moving average (Score: -1). Short term momentum indicators are trending up (Score: 1). Technical score improved last week to -2 from -4.

Percent of TSX stocks trading above their 50 day moving average increased last week to 37.25% from 30.77%. Percent reached an intermediate low on August 25th

Percent of TSX stocks trading above their 200 day moving average increased last week to 22.67% from 22.27%. Percent reached an intermediate low on August 25th

The Dow Jones Industrial Average added 157.70 points (0.97%) last week. Intermediate trend changed to neutral from up last week. Strength relative to the S&P 500 Index remains positive. The Average moved above its 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score improved to 4 from 2.

Bullish Percent Index for Dow Jones Industrial Average stocks slipped last week to 33.33% from 40.00% and slipped below its 20 day moving average. The Index bottomed on August 25th

Bullish Percent Index for NASDAQ Composite stocks slipped last week to 34.13% from 38.65% and remained below its 20 day moving average. The Index reached an intermediate low on August 25th

The NASDAQ Composite Index added 21.27 points (0.45%) last week. Intermediate trend remains down. 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 up. Technical score last week improved to -4 from -6.

The Russell 2000 Index added 8.67 points (0.77%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains negative. The Index remains below its 20 day moving average. Short term momentum indicators turned up on Friday. Technical score improved last week to -4 from -6.

The Dow Jones Transportation Average improved 23.02 points (0.29%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains neutral. The Average remains below its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to -2 from -4.

The Australia All Ordinaries Composite Index improved 12.50 points (0.25%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains neutral. The Index remains below its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to -2 from -3

The Nikkei Average dropped 155.38 points (0.87%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains negative. The Average remains below its 20 day moving average. Short term momentum indicators have turned up. Technical score improved last week to -4 from -5.

Europe iShares added $0.93 (2.34%) last week. Units remain in an intermediate downtrend. Strength relative to the S&P 500 Index remains negative. Units moved above their 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score improved last week to -4 from -6.

The Shanghai Composite Index lost 39.57 points (1.28%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains neutral. The Index remains below its 20 day moving average. Short term momentum indicators are mixed. Technical score dipped last week to -3 from -2

Emerging Markets jumped $1.44 (4.44%) last week. Intermediate trend changed to neutral from positive following a move below $31.94. Units moved above their 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score improved last week to 2 from 0.

 

Currencies

The U.S. Dollar Index dropped 0.37 (0.38%) last week. Intermediate trend remains up. Short term momentum indicators are trending up. The Index remains above its 20 day moving average.

The Euro added 0.06 (0.05) last week. Intermediate trend remains up. The Euro remains below its 20 day moving average. Short term momentum indicators are mixed.

The Canadian Dollar gained US 0.93 cents (1.24%) last week. Intermediate trend remains down. The Canuck Buck moved above its 20 day moving average. Short term momentum indicators are trending up.

The Japanese Yen added 0.48 (0.58%) last week. Intermediate trend remains up. The Yen remained below its 20 day moving average. Short term momentum indicators are mixed.

 

Commodities

Daily Seasonal/Technical Commodities Trends for October 2nd 2015


Green: Increase from previous day

Red: Decrease from previous day

The CRB Index slipped 1.60 points (0.82%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains neutral. The Index remains below its 20 day moving average. Short term momentum indicators are mixed. Technical score remained at -3.

Gasoline fell $0.03 per gallon (2.17%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains neutral. Gas remains below its 20 day moving average. Short term momentum indicators are mixed. Technical score remained at -3.

Crude Oil slipped $0.04 per barrel (0.09%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index changed last week to neutral from positive. Crude returned to above its 20 day moving average on Friday. Short term momentum indicators are mixed. Technical score slipped last week to -1 from 1.

Natural Gas dropped $0.16 per MBtu (6.08%) last week. Intermediate downtrend resumed on a break below $2.47. Strength relative to the S&P 500 Index changed last week to negative from neutral. “Natty” remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -6 from -2.

The S&P Energy Index added 12.84 points (2.81%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains neutral. The Index moved above its 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score increased last week to -2 from -4.

The Philadelphia Oil Services Index added 1.07 points (0.65%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains negative. The Index remains below its 20 day moving average. Short term momentum indicators turned up on Friday. Technical score improved to -4 from -6.

Gold dropped $8.00 per ounce (0.70%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to neutral from positive. Gold moved above its 20 day moving average on Friday. Short term momentum indicators are mixed. Technical score slipped to 3 from 6.

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Silver added $0.12 per ounce (0.79%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index returned to positive on Friday. Silver returned to above its 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score remained at 2. Strength relative to gold turned positive.

The AMEX Gold Bug Index gained 3.32 points (2.98%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remained neutral last week. The Index returned to above its 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score improved last week to 0 from -1. Strength relative to Gold remains neutral.

Platinum plunged $39.60 per ounce (4.16%) last week. Trend remains down. Strength relative to S&P 500 remains negative. PLAT remains below its 20 day MA. Momentum remains down.

Palladium gained $32.15 per ounce (4.82%) last week. Trend remains up. Strength relative to the S&P 500 and Gold remains positive. PALL remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained at 6.

Copper added $0.07 per lb. (3.07%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index changed to neutral from negative. Copper remains below its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to -2 from -6.

The TSX Metals & Minerals Index slipped 2.41 points (0.64%) last week. Intermediate trend remains down. 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 up. Technical score improved to -4 from -6.

Lumber added 5.30 (2.45%) last week. Intermediate trend remains down. Strength relative to S&P 500 remains negative. Lumber remains below its 20 day MA. Momentum is trending up.

The Grain ETN slipped $0.13 (0.39%) last week. Trend changed to up from down. Relative strength remains positive. Units remain above their 20 day moving average. Short term momentum indicators are trending up. Technical score improved to 6 from 2.

The Agriculture ETF added $0.53 (1.15%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains negative. Units remain below their 20 day moving average. Short term momentum indicators have turned up. Technical score improved to -4 from -6.

 

Interest Rates

Yield on 10 year Treasuries dropped 17.9 basis points (8.26%) 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 ETF gained $3.02 (2.48%) last week. Trend remains up. Units remain above their 20 day moving average.

 

Other Issues

The VIX Index dropped 2.22 (9.69%) last week. The Index peaked on August 25th, but remains elevated.

Third quarter earnings reports begin to appear this week. According to FactSet, consensus calls for a drop of 5.1% in earnings and 3.4% in revenues on a year-over-year basis for S&P 500 companies. Analyst cut back consensus. The previous weekly earnings estimate was a decline of 4.4%. Consensus for Dow Jones Industrial Average companies is an average (median) drop of 5.8%. Consensus for TSX 60 companies is an average (median) gain of 2.4%. Prospects for S&P 500 companies improve slightly in the four quarter. Consensus calls for a year-over-year a gain by S&P 500 earnings of 0.3% and a drop by S&P 500 revenues of 1.5%.

Short term momentum indicators for most equity markets and sectors are trending up.

Intermediate technical indicators indicate that most equity markets and sectors bottomed on August 25th and are forming a base pattern prior to an upward move.

More S&P 500 stocks broke support than resistance last week: 70 broke support and 13 broke resistance. Timing for most of the stocks breaking resistance was Thursday and Friday.

Economic news this week is quiet and benign. Focus is on FOMC Meeting Minutes to be released on Thursday.

Equity markets are in the latter half of its weakest three week period in the year between the last week in September and end of the second week in October.

International influences currently are quiet.

The September U.S. employment report released on Friday was a negative surprise, implying the likelihood that the Fed will defer its first increase in the Fed Fund rate until at least December.

Sectors

Daily Seasonal/Technical Sector Trends for October 2nd 2015

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:

 

Special Annual CSTA 2015 Event

Technicians Day!

Register now..

In 2014 The CSTA held an annual meeting on the web that was the most successful meeting ever held by the CSTA.

This year, we are doing it again!! 

Join us on October 17, 2015.

Location Agendas: Toronto, Calgary, Winnipeg

With National Speakers Tom Demark and Ron Meisels, this will be a fabulous conference!

Don Vialoux is one of the speakers in Winnipeg.

 

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.