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Tech Talk for Monday November 28th 2016

 

Jon Vialoux on BNN’s Market Call Tonight

Recorded on Friday evening. Following are links :

 

Top picks

http://www.bnn.ca/video/jon-vialoux-s-top-picks~1003747

 

http://www.bnn.ca/video/jon-vialoux-discusses-ishares-s-p-tsx-60-index-fund~1003744

http://www.bnn.ca/video/jon-vialoux-discusses-potash-corp~1003738

http://www.bnn.ca/video/jon-vialoux-discusses-teck-resources~1003734

 

Opening

http://www.bnn.ca/video/market-call-tonight-for-friday-november-25-2016~996679

 

 

Economic News This Week

Second estimate of third quarter real GDP to be released at 8:30 AM EST on Tuesday is expected to be revised upward to 3.0% from the first estimate at 2.9%.

September Case/Shiller 20 City Home Price Index to be released at 9:00 AM EST on Tuesday is expected to increase on an annual basis to 5.2% from 5.1% in August.

November Consumer Sentiment to be released at 10:00 AM EST on Tuesday is expected to increase to 100.0 from 98.6 in October

November ADP private employment to be released at 8:15 AM EST on Wednesday is expected to increase to 160,000 from 147,000 in October

October Personal Income to be released at 8:30 AM EST on Wednesday is expected to increase 0.4% versus a gain of 0.3% in September. October Personal Spending is expected to increase 0.5% versus a gain of 0.5% in September.

Cdn. third quarter real GDP to be released at 8:30 AM EST on Wednesday is expected to grow at a 3.5% annualized rate versus a decline of 1.6% in the second quarter

November Chicago PMI to be released at 9:45 AM EST on Wednesday is expected to increase to 52.0 from 50.6 in October.

Fed Beige Book is 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 increase to 253,000 from 251,000 last week.

October Construction Spending to be released at 10:00 AM EST on Thursday are expected to increase 0.6% versus a decline of 0.4% in September

November ISM to be released at 10:00 AM EST on Thursday is expected to increase to 52.1 from 51.9 in October.

November Non-farm Payrolls to be released at 8:30 AM EST on Friday are expected to increase to 180,000 from 161,000 in October. November Private Non-farm Payrolls are expected to increase to 170,000 from 142,000 in October. November Unemployment Rate is expected to remain unchanged from October at 7.0%. November Hourly Earnings are expected to increase 0.2% versus a gain of 0.4% in October.

Canadian November Employment to be released at 8:30 AM EST on Friday is expected to be unchanged versus a gain of 43,900 in October. November Unemployment Rate is expected to remain unchanged from October at 7.0%

 

Earnings Reports This Week

 

Observations

Technical action by S&P 500 stocks was bullish again last week: 24 stocks broke intermediate resistance and only seven stocks broke support. Number of S&P 500 stocks in an intermediate uptrend increased last week to 244 from 235, number of stocks in an intermediate neutral trend slipped to 73 from 75 and number of stocks in an intermediate downtrend dropped to 191 from 198. The Up/Down ratio increased last week to (244/191=) 1.28.

Short term technical indicators for North American equity markets (momentum, 20 day moving average) are trending up and are overbought, but have yet to show signs of peaking.

Once again, the two consecutive most profitable days in the year for U.S. equity indices proved to be profitable. The TSX Composite Index also recorded a small profit during the period.

North American equity markets continue to follow the Presidential cycle. Historically, equity markets move higher from just after the election until just after Inauguration Day (January 20th)

U.S. economic news released this week is expected to show a slight acceleration in growth: improvements in Q3 GDP, Consumer Confidence, ADP Employment, Chicago PMI, Construction Spending, ISM, Non-farm Payrolls.

Earnings focus this week is on fiscal fourth quarter results by Canada’s banks. Consensus shows an average earnings gain on a year-over-year basis of 5%. Two banks are expected to increase their quarterly dividends: Bank of Montreal and National Bank. A word of caution! Historically, Canadian bank stocks have reached a seasonal peak when fourth quarter results are released. Technical action by the group currently shows positive momentum. Stay tuned for possible seasonal profit taking opportunities when technical parameters start to roll over.

Political decisions by the Trudeau government to approve/delay/disapprove major oil pipeline proposals are scheduled to be released this week. Traders are expecting disapproval for the Northern Gate pipeline and conditional approval of the Line 3 upgrade.

On the international front, the OPEC meeting on Wednesday will be watched closely to see if members will confirm plans to lower oil production

Third quarter report season for S&P 500 companies is beginning to wind down: 98% have reported to date, blended earnings to date on a year-over-year basis were up 3.2%, 72% beat consensus earnings and 54% beat consensus revenues. Another seven companies are scheduled to report this week.

Fourth quarter prospects for S&P 500 companies are mildly positive. Seventy one companies have issued negative guidance and 34 companies have issued positive guidance. According to FactSet, fourth quarter earnings are expected to increase 3.3% (down from 3.4% last week) and fourth quarter revenues are expected to increase 5.0% (up from 4.9% last week).

Prospects for S&P 500 companies in 2017 remain mildly positive. According to FactSet, consensus calls for an 11.4% increase in earnings and a 5.9% gain in revenues, unchanged from last week.

Tax loss selling pressures are at a maximum during the next three weeks, particularly in precious metal stocks and related ETFs.

 

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for November 25th 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 another 31.45 points (1.44%) last week to an all-time high. Intermediate trend changed to up from neutral on a move above 2,193.81. The Index remains above its 20 day moving average. Short term momentum indicators are trending up and are overbought, but have yet to show signs of peaking.

Percent of S&P 500 stocks trading above their 50 day moving average (Also known as the S&P 500 Momentum Barometer) increased last week to 69.60 from 59.20. Percent is intermediate overbought and trending up, but has yet to show signs of peaking.

Percent of S&P 500 stocks trading above their 200 day moving average increased last week to 70.20 from 65.20. Percent is intermediate overbought and trending up, but has yet to show signs of peaking.

Bullish Percent Index for S&P 500 stocks increased last week to 63.40 from 61.40 and remained above its 20 day moving average. The Index remains intermediate overbought and trending higher, but has yet to show signs of peaking.

Bullish Percent Index for TSX stocks increased last week to 68.29 from 67.89 and remained below its 20 day moving average. The Index remains intermediate overbought and trending down (mainly due to weakness in the precious metal stocks).

The TSX Composite Index gained 211.41 points (1.42%) last week to a 15 month high. Intermediate trend remains up (Score: 2). Strength relative to the S&P 500 Index remains negative (Score: -2). The Index remains above its 20 day moving average (Score: 1). Short term momentum indicators are trending up (Score: 1) and overbought, but have yet to show signs of peaking. Technical score remained last week at 2

Percent of TSX stocks trading above their 50 day moving average (Also known as the TSX Momentum Barometer) increased last week to 51.25 from 47.50. Percent is intermediate neutral and in an uptrend.

Percent of TSX stocks trading above their 200 day moving average increased last week to 62.50 from 61.67. Percent remains overbought, but recently bottomed and has developed a short term uptrend.

The Dow Jones Industrial Average gained 284.21 points (1.51%) last week to an all-time high. 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 and are overbought, but have yet to show signs of peaking. Technical score remained last week at 6.

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

Bullish Percent for NASDAQ Composite Index increased last week to 64.14 from 62.18 and remained above its 20 day moving average. The Index remains intermediate overbought and trending up.

The NASDAQ Composite Index added another 75.41 points (1.42%) last week to an all-time high. Intermediate trend remains up. Strength relative to the S&P 500 Index improved to positive from neutral. The Index remains above its 20 day moving average. Short term momentum indicators are trending up and are overbought, but have yet to show signs of rolling over. Technical score improved last week to 6 from 4

The Russell 2000 Index jumped another 31.56 points (2.40%) last week to an all-time high. 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 are trending up and are overbought, but have yet to show signs of peaking. Technical score remained last week at 6.

The Dow Jones Transportation Average added another 187.74 points (2.12%) 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 and are overbought, but have yet to show signs of a peak.

The Australia All Ordinaries Composite Index gained 143.00 points (2.63%) last week. Intermediate trend changed to neutral from down on Friday on a move above 5,578.90. Strength relative to the S&P 500 Index remained neutral. The Index remains above its 20 day moving average. Short term momentum indicators are trending up and are overbought, but have yet to show signs of peaking. Technical score increased last week to 2 from -2.

The Nikkei Average gained another 413.81 points (2.30%) 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 and are overbought, but have yet to show signs of peaking. Technical score remained last week at 6.

Europe iShares added $0.43 (1.17%) 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 last week to -4 from –6

The Shanghai Composite Index added another 69.08 points (2.16%) 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 turned back up and are overbought, but have yet to show signs of peaking.

Emerging Markets iShares added $0.67 (1.94%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remained negative. Units remained below their 20 day moving average. Short term momentum indicators have turned up. Technical score improved last week to -4 from -6.

 

Currencies

The U.S. Dollar Index gained another 0.48 (0.47%) last week to a 13 year high. Intermediate trend remains up. The Index remained above its 20 day moving average. Short term momentum indicators are trending up and are overbought, but have yet to show signs of peaking.

The Euro added 0.10 (0.09%) last week. Intermediate trend remains down. The Euro remains below its 20 day moving average. Short term momentum indicators are trending down, are oversold and showing early signs of bottoming.

The Canadian Dollar slipped US 0.07 cents (0.09%) last week. Intermediate trend remains down. The Canuck Buck remains below its 20 day moving average. Short term momentum indicators have turned up.

The Japanese Yen dropped another 1.71 (1.89%) last week. Intermediate trend remains down. The Yen remains below its 20 day moving average. Short term momentum indicators are trending down and are overbought, but have yet to show signs of bottoming.

The British Pound added 1.08 (0.87%) last week. Intermediate trend remains neutral. The Pound remains above its 20 day moving average. Short term momentum indicators are trending down.

 

Commodities

Daily Seasonal/Technical Commodities Trends for November 25th 2016

Green: Increase from previous day

Red: Decrease from previous day

 

The CRB Index gained 2.59 points (1.41%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains negative. The Index moved above its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to 2 from 0.

Gasoline gained 3.3 cents per gallon (2.46%) last week. Intermediate trend remained neutral. Strength relative to the S&P 500 Index remained negative. Gas returned to below its 20 day moving average on Friday. Short term momentum indicators are trending up. Score: –2

Crude Oil slipped $0.30 per barrel (0.65%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index improved to neutral from negative. Crude remains above its 20 day moving average. Short term momentum indicators are trending up, but showing early signs of rolling over. Technical score increased last week to 4 from 2.

Natural Gas jumped $0.36 per MBtu (12.68%) last week thanks to the La Nina effect on weather. Intermediate trend improved to neutral from down on a move above 3.163. “Natty” pushed above its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to 4 from 0.

The S&P Energy Index gained 11.67 points (2.24%) last week. Intermediate trend changed to up from neutral on a move above 530.12. Strength relative to the S&P 500 Index changed to positive from neutral. The Index remained above its 20 day moving average. Short term momentum indicators are trending up and are overbought, but have yet to show signs of peaking. Technical score improved last week to 6 from 4.

The Philadelphia Oil Services Index gained 3.49 points (2.13%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index remained positive. The Index remained above its 20 day moving average. Short term momentum indicators are trending up and are overbought, but have yet to show signs of peaking.

Gold plunged $30.30 per ounce (2.51%) last week. Intermediate trend remains down. 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 remained last week at –6

Silver dropped $0.15 per ounce (0.90%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains negative. Silver remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at –6

The AMEX Gold Bug Index plunged 6.34 points (3.48%) 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 down. Technical score remained last week at –6

Platinum dropped $13.70 per ounce (1.49%) last week. Trend remains down. Relative strength remains negative. Trades below its 20 day MA. Momentum: down. Score remained –6

Palladium added $15.10 per ounce (2.07%) last week. Intermediate trend changed to up from neutral on a move above $747.50. Relative strength remains positive. PALL remained above its 20 day moving average. Momentum indicators are trending up. Technical score improved to 6.

Copper gained $0.20 per lb. (8.10%) 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 have returned to up. Technical score improved last week to 6 from 4.

The Base Metal ETN jumped $1.19 (7.98%) 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 returned to trending up. Technical score improved last week to 6 from 4.

Lumber gained 13.70 (4.27%) last week. Trend remains neutral. Relative strength remained positive. Trades above its 20 day MA. Momentum is trending up. Score remained at 4.

The Grain ETN added $0.64 (2.24%) last week. Trend remains up. 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: trending up. Technical score improved to 4 from 0.

The Agriculture ETF gained $0.80 (1.59%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained negative. Units remained above their 20 day moving average. Short term momentum indicators are trending up. Technical score last week remained at 2.

 

Interest Rates

Yield on 10 year Treasuries gained 3.7 basis points (1.58%) last week. Intermediate trend remains up. Yield remains above its 20 day moving average. Short term momentum indicators are trending up and are overbought, but have yet to show signs of peaking.

Conversely, price of the long term Treasury ETF dropped another $0.03 (0.02%) last week. Intermediate trend remains down. Units remain below their 20 day moving average.

 

Volatility

The VIX Index dropped another 0.51 (3.97%) last week. The Index remained below its 20 day moving average.

 

Sectors

Daily Seasonal/Technical Sector Trends for November 25th 2016

Green: Increase from previous day

Red: Decrease from previous day

 

StockTwits Released on Friday @EquityClock

Dollar breakout continues to fuel outperformance in the small cap Russell 2000 Index.

Technical action by S&P 500 stocks to 10:15: Quiet. Breakouts: $CINF $TSS. No breakdowns.

 

WALL STREET RAW RADIO WITH MARK LEIBOVIT

– NOVEMBER 26, 2016

WITH GUESTS SINCLAIR NOE, HENRY WEINGARTEN AND KEN CALHOUN

http://tinyurl.com/gsfwre3

 

Paying it Forward

An opportunity to “Pay it forward” for valued free investment services offered by Tech Talk by donating to a worthy charity. Tech Talk’s favourite charity is Wellspring, a unique charity that provides free services for cancer patients and their caregivers.   Jan and Don Vialoux are actively involved in the organization. Don is a cancer survivor. Wellspring’s biggest charity event each year is its “Light Up Wellspring” event where individuals and companies make donations, through sponsored bulbs, to light up the facility for the Christmas season. Background on the event, Wellspring’s services and how to donate are offered below.

During the months of November and December Wellspring will be having our annual Light Up Wellspring fundraising campaign to celebrate the holiday season. You will be able to sponsor a bulb, strand of lights, wreath or tree and support the Wellspring centre of your choice. Your donation will be recognized throughout the centre on paper bulbs or on the sponsored wreath or tree.

On December 1, 2016, Wellspring welcomes the community, families and friends to light up their local Wellspring Centre with a holiday open house including festive refreshments, a bake sale and silent auction.

 

Give $5 and light up a bulb
(minimum of $10 donation online)

Give $25 and light up a strand of bulbs

Give $250 and light up a wreath or Hanukkah menorah

Give $1000 and light up a holiday tree

Event Details:
Thursday, December 1, 2016
6:00pm – 8:30pm, Official Lighting Ceremony at 6:30pm.
Wellspring Birmingham Gilgan House, 2545 Sixth Line, Oakville, ON L6H 7V9

To learn about sponsorship opportunities, please click here.