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Tech Talk for Monday April 15th 2019

 

WALL STREET RAW RADIO

WITH YOUR HOST, MARK LEIBOVIT – SATURDAY, APRIL 13, 2019

THE FINAL SHOW!

GUESTS INCLUDE: DON VIALOUX, HARRY BOXER, HENRY WEINGARTEN, SINCLAIR NOE AND RALPH CASE

Editor’s Note: Thank you to Mark Leibovit for the opportunity to appear on his weekly radio show during the past five years.

http://tinyurl.com/y3qhw7yr

 

Excerpts from Wall Street Raw by Don Vialoux

North American equity markets mixed last week. Notable weaker was the Dow Jones Industrial Average. Strongest was the technology rich NASDAQ Composite Index.

Traders have started to focus on first quarter earnings reports. Consensus is calling for a 4.2% year-over-year decline by S&P 500 companies. Companies with large exposure to international markets are expected to be impacted most due to the 7% year-over-year increase in the U.S. Dollar Index. Lower valued currencies are converted into lower valued sales and earnings when translated into U.S. Dollars.

Focus next week is on reports released by financial services companies. On Friday JP Morgan moved higher and Wells Fargo moved lower following release of first quarter results. Next week reports are scheduled to be released by Citigroup, Bank of America, Goldman Sachs, Bank of New York Mellon and American Express.

Cannabis stocks and their related ETFs had a rough week. The cannabis ETF in Canada (Symbol: HMMJ) broke below support at $20.80 and completed a short term Head and Shoulders pattern. Short term downside risk is to $19.00. The sector has been impacted by disappointing sales in the first quarter in Canada triggered by regulatory red tape when legal sales at retail outlets were launched.

Energy stocks on both sides of the border moved higher on Friday after Chevron offered to purchase Anadarko. Look for more merger talks in the sector this spring.

Precious metals and precious metal equity prices were slightly lower last week. Seasonal influences are positive at this time of year to the first week in June.

 

The Bottom Line

U.S. and Canadian equity markets mixed last week despite strength on Friday. Intermediate momentum indicators for North American equity markets moved higher despite intermediate overbought levels. Indices continued to focus on prospects for a China/U.S. trade deal.

Observations

Technical action by individual S&P 500 stocks moved higher last week. Number of stocks breaking intermediate resistance totaled 45 while number of stocks breaking support totaled 6. The Up/Down ratio increased to (322/102=) 3.15 from 2.76.

Medium term technical indicators for U.S. equity markets (e.g. Percent of stocks trading above their 50 day moving average, Bullish Percent Index) continued to move higher last week, but remain overbought. See charts near the end of this report

Medium term technical indicators in Canada were mixed last week, but remain intermediate overbought. See charts near the end of this report.

Short term technical indicators for U.S. markets and sectors (20 day moving averages, short term momentum) moved higher again last week.

Short term technical indicators for Canadian markets and sectors also moved higher again last week.

Short term political concerns remain elevated. Issues include tariff wars between the U.S. and China and anti-Trump hearings initiated by the Democrat controlled House of Representatives

Frequency of quarterly earnings reports accelerates this week. Another 49 S&P 500 companies (including six Dow Jones Industrial companies) are scheduled to report.

Prospects for S&P 500 earnings were reduced again last week. According to FactSet, first quarter earnings are expected to decline 4.3% on a year-over-year basis (versus a decline of 4.2% last week) but revenues are expected to increase 4.8%. Second quarter earnings are expected to slip 0.4% (versus unchanged) and second quarter revenues are expected to increase 4.2% (down from 4.6%). Third quarter earnings are expected to increase 1.4% (down from 1.6%) and revenues are expected to increase 4.1% (down from 4.4%). Fourth quarter earnings are expected to increase 8.3% and fourth quarter revenues are expected to increase 4.7% (down from 4.9%). For all of 2019, earnings are expected to increase 3.4% (down from 3.6%) and revenues are expected to increase 4.6% (down from 4.9%).

Seasonal influences in the first and second quarters of a U.S. Pre-Presidential Election Year are favourable. Gains this year already have exceeded average gains in the first and second quarters.

Economic News This Week

March Industrial Production to be released at 9:15 AM EDT on Tuesday is expected to increase 0.3% versus a gain of 0.1% in February. March Capacity Utilization is expected to remain unchanged at 79.1%

OPEC meeting tentatively is scheduled on Wednesday.

February U.S. Trade Deficit to be released at 8:30 AM EDT on Wednesday is expected to increase to $53.7 billion from $51.1 billion in January.

Canadian March Consumer Price Index to be released at 8:30 AM EDT on Wednesday is expected to increase 0.8% versus a gain of 0.7% in February (2.0% year-over-year versus 1.5% in February).

Canadian February Trade Deficit to be released at 8:30 AM EDT on Wednesday is expected to slip to $2.5 billion from $4.25 billion in January.

Beige Book is released at 2:00 AM EDT on Wednesday.

Weekly Initial Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to increase to 205,000 from 196,000 last week.

April Philly Fed Index to be released at 8:30 AM EDT on Thursday is expected to slip to 10.3 from 13.7 in March.

March Retail Sales to be released at 8:30 AM EDT on Thursday is expected to increase 0.9% versus a decline of 0.2% in February. Excluding auto sales, March Retail Sales are expected to increase 0.5% versus a decline of 0.6% in February.

February Canadian Retail Sales to be released at 8:30 AM EDT on Thursday are expected to increase 0.5% versus a decline of 0.3% in January. Excluding auto sales, February Retail Sales are expected to increase 0.3% versus a gain of 0.1% in January.

February Business Inventories to be released at 10:00 AM EDT on Thursday are expected to increase 0.3% versus a gain of 0.8% in January.

Holiday in North American markets (Good Friday) on Friday.

 

Selected Earnings News This Week

 

Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for April 12th 2019

Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for April 12th 2019

Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for April 12th 2019

Green: Increase from previous day

Red: Decrease from previous day

 

Technical Scores

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

 

Changes Last Week

 

StockTwits released on Friday @EquityClock

Technical action by S&P 500 stocks to 10:00: Bullish. 19 stocks broke intermediate resistance (mainly financials and energy) 3 broke support

Editor’s Note: After 10:00 AM EDT, breakouts included EIX, YUM, AJG and MSFT. No breakdowns.

Energy stocks notable on the breakout list following takeover of $APC by $CVX: $APA $DVN $EOG $MRO

Financials notable on list of breakouts following $JPM report: $BAC $BLK $BRK.B $CINF $GS $LNC

Financial SPDRs $XLF moved above $27.10 extending an intermediate uptrend

Wells Fargo $WFC is the exception in the financial sector breaking support at $47.06.

TSX Financial ETF $XFN.CA moved above $38.13 extending an intermediate uptrend

Healthcare Providers ETF $IHF moved below $162.73 extending an intermediate downtrend.

Royal Bank $RY.CA, a TSX 60 stock moved above $104.30 to an all-time high extending an intermediate uptrend.

Auto ETF $CARZ moved above $34.92 completing a reverse Head & Shoulders pattern

Magna International $MG.CA $MGA, a TSX 60 stock moved above $72.11 Cdn. extending an intermediate uptrend.

U.S. Brokers iShares $IAI moved above $62.42 extending an intermediate uptrend

Germany iShares $EWG moved above $28.01 extending an intermediate uptrend.

Italy iShares $EWI moved above $28.38 extending an intermediate uptrend.

Vietnam ETF $VNM moved above $17.16 extending an intermediate uptrend.

S&P 500 Momentum Barometers

S&P 500 Percent over 50 day moving average slipped last week to 83.97 from 84.17. Percent remains intermediate overbought.

Bullish Percent Index for S&P 500 stocks increased last week to 79.40 from 75.20. The Index remains intermediate overbought.

 

TSX Momentum Barometers

TSX Percent trading over their 50 day moving average dropped last week to 68.31 from 74.90. Percent is intermediate overbought and has rolled over.

Bullish Percent Index for TSX stocks increased to 58.85 from 56.79. The Index remains intermediate overbought.

 

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

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