Observations British Pound responds to Brexit uncertainty Thoughts offered yesterday afternoon during a busy Monday trading session Wow, what a difference a week makes! The Dow dropped 8.1%, the S&P 500 dropped 7.7% and the TSX Composite lost 5.0% from their highs set just last Monday to their lows today (including a 508 point drop by the Dow Jones Industrial Average this morning). Break downs by all three indices this morning below October 29th lows was scary at best. Indices are not following their seasonal patterns this year so far. The drops have had little to do with corporate news. Corporate reports on both sides of the border has been positive (e.g. strong earnings gains and dividend increases announced by the Canadian banks, share buybacks announced by major corporations including Facebook today and Intel, Disney late last week). According to FactSet, S&P 500 company earnings are expected to grow at a healthy 8.6% rate in 2019 on a 5.6% increase in sales. Equity market sentiment is driven by short term political events (Trump’s tweets?). Tax loss selling also is a factor until the end of this week. Nice recovery this afternoon by U.S. equity indices from near their previous October lows! On a seasonal basis, the next three week period is the strongest time frame in the year for North American equity. Reasons for strength already have started to appear: Investment dealers have started to release their annual forecasts for next year. Bank of America/Merrill released its equity outlook for 2019 on BNNBloomberg this afternoon. Preferred strategy is to keep in contact (i.e hold hands) with short term jittery traders. Short term technical indicators already show that North American equity markets are deeply oversold. Short term traders will want more evidence that equity markets have bottomed before adding to commitments. Longer term investors can use weakness to add to seasonally attractive sectors. StockTwits ReleasedYesterday @EquityClock Technical action by S&P 500 stocks to 10:15:Bearish. No breakouts. Breakdowns: $LKQ $IPG $NWS $HBAN $JPM $KEY $NTRS $WFC $MYL $WRK $UPS $HUM S&P Bank SPDRs $KBE moved below $40.31 extending an intermediate downtrend Regional Bank SPDRs $KRE moved below $50.69 extending an intermediate downtrend. JP Morgan , a Dow Jones Industrial stock moved below $102.73 extending an intermediate downtrend Auto ETF $CARZ moved below $32.23 extending an intermediate downtrend Agriculture ETF $MOO moved below $59.70 extending an intermediate downtrend. US Job Openings up 4.2% (NSA) in October, weaker than the 7.5% increase that is average for the month. $MACRO #Economy #Employment Midcap SPDRs $MDY moved below $321.76 extending an intermediate downtrend Canadian Tire $CTC.A.CA, a TSX 60 stock moved below $144.36 extending an intermediate downtrend Intact Financial $IFC.CA moved below $99.66 completing a Head & Shoulders pattern Badger Daylighting $BAD.CA moved above $32.41 extending an intermediate uptrend Move by the S&P 500 Index below 2603.54 triggered broad selling. Since 10:15, another 21 S&P 500 stocks broke intermediate support $SPX Dow Jones Industrial Average and related ETF also broke below its October low at 24,122.29. Gold Equity ETF $GDX moved above $20.51 extending an intermediate uptrend. Industrial SPDRs $XLI moved below $66.99 extending an intermediate downtrend Healthcare Providers ETF $IHF moved below $183.86 completing a double top pattern Fertilizer ETF $SOIL moved below $9.35 extending an intermediate downtrend Dow Jones Transportation Average $TRAN and related ETF $IYT moved below intermediate support at $9,757.50 TSX Composite Index $TSX.CA moved below intermediate support at 14,639.70 Magna International $MG.CA $MGA, a TSX 60 stock moved below $59.14 Cdn extending an intermediate downtrend Inter Pipeline $IPL.CA, a TSX 60 stock moved below $20.55 extending an intermediate downtrend CI Financial $CIX.CA moved below $18.38 extending an intermediate downtrend. Barrick Gold $ABX $ABX.CA, a TSX 60 stock moved above $14.07 U.S.extending an intermediate uptrend Technical Scoop Thanks to David Chapman and www.EnrichedInvesting.com Following is a link: http://www.enrichedinvesting.com/PDF/Volatility-Huawei-based-Threats-Yellow-Vest-Riots-No-Deep-End-Yet-Bond-and-Gold-Safe-Haven-Oil-Bounce.pdf Keith Richards’ Blog Keith says, “Bear-o-meter drops a point”. Following is a link: https://www.valuetrend.ca/bear-o-meter-drops-a-point/ Trader’s Corner Equity Indices and related ETFs Daily Seasonal/Technical Equity Trends for December 10th 2018 Green: Increase from previous day Red: Decrease from previous day Commodities Daily Seasonal/Technical Commodities Trends for December 10th 2018 Green: Increase from previous day Red: Decrease from previous day Sectors Daily Seasonal/Technical Sector Trends for December 10th 2018 Green: Increase from previous day Red: Decrease from previous day S&P 500 Momentum Barometer The Barometer added 1.60 to 28.80 yesterday. It remains intermediate oversold. TSX Momentum Barometer The Barometer slipped 0.41 to 33.88 yesterday. It remains intermediate oversold. Disclaimer: Seasonality and technical ratings offered in this report and at 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