Editor’s Note: Next Tech Talk report is released on Monday October 31st The Bottom Line The period of seasonal strength by North American equity markets has arrived. This year, the S&P 500 Index likely reached a seasonal low on October 13th at 2,114.72, the Dow Jones Industrial Average likely reached a low at 17,959.95 and the TSX Composite Index likely reached a low on October 4th at 14,468.03. Volatility likely will remain high between now and November 8th (U.S. Presidential Election Day). Thereafter, equity markets are expected to catch the seasonal upswing wave that traditionally happens between now and the first week in January. If so, look for the S&P 500 Index and the Dow Jones Industrial Average to reach all-time highs. The TSX Composite Index already is in gear. Last week, it re-affirmed its intermediate uptrend on a breakout above 14,855.69 and is on its way to test its next intermediate resistance level at 15,424.75. Economic News This Week August Case/Shiller 20 City Home Price Index to be released at 9:00 AM EDT on Tuesday is expected to show a year-over-year gain of 5.1%, up from 5.0% in July October Consumer Confidence Index to be released at 10:00 AM EDT on Tuesday is expected to slip to 100.8 from 104.1 in September. September New Home Sales to be released at 10:00 AM EDT on Wednesday are expected to inch up to 610,000 from 609,000 in August. Weekly Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to slip to 259,000 from 260,000 last week. September Durable Goods Orders to be released at 8:30 AM EDT on Thursday are expected to be unchanged versus unchanged in August. Excluding transportation, September Orders are expected to increase 0.3% versus a decline in 0.4% in August. U.S. Advanced Third Quarter Real GDP to be released at 8:30 AM EDT on Friday is expected to grow at an annualized rate of 2.5% versus growth at an annual rate of 1.4% in the second quarter. October Michigan Sentiment Index to be released at 10:00 AM EDT on Friday is expected to increase to 88.2 from 87.9 in September Earnings News This Week Observations Technical action by S&P 500 stocks last week was mixed: 32 stocks broke intermediate resistance and 40 stocks broke intermediate support. Number of S&P 500 stocks in an intermediate uptrend increased last week to 197 from 189, number of stocks in a neutral trend slipped to 68 from 72 and number of stocks in a downtrend dropped to 245 from 249. The Up/Down ratio increased last week to (197/245=) 0.80 from 0.76, U.S. economic news this week is expected to be mildly positive for equity markets. Focus is on the release of the first estimate of third quarter real GDP. Consensus calls for a nice recovery relative to a week second quarter. This week is the busiest week for quarterly reports by major U.S. companies: 178 S&P 500 Index and 12 Dow Jones Industrial Average companies are scheduled to release results this week. Reports by major Canadian companies will start to trickle in. Third quarter results by 23% of S&P 500 companies that have released to date have been encouraging: According to FactSet, 78% of reported S&P 500 companies reported higher than consensus earnings and 65% reported higher than consensus revenues. Ten companies have issued negative fourth quarter guidance and seven companies issued positive guidance. Blended earnings on a year-over-year basis are down 0.3% versus expectations prior to release of -1.8%. Most of the higher than consensus gains came from the financial services sector. Blended revenues were up 2.6%. Third quarter earnings prospects for TSX 60 companies are more encouraging than prospects for S&P 500 companies. Consensus calls for an average (median) gain of 6.1%. Prospects beyond the third quarter remain positive. Earnings by S&P 500 companies on a year-over-year basis are expected to increase 5.5% (versus 5.6% estimated last week) and revenues are expected to increase 5.2% (versus 5.3% estimated last week). Estimates have declined slightly in response to damage caused by Hurricane Matthews. Prospects in 2017 also remain promising. Consensus for earnings by S&P 500 companies calls for a gain of 12.4% (versus 12.8% estimated last week). Recent strength in the U.S. Dollar Index has prompted analysts to lower expectations slightly. Consensus for revenues calls for a gain of 6.0%. Polls on the U.S. Presidential election continue to show Hilary with a significant lead. History shows that U.S. equity markets bottom about mid-October when a new President is elected after a two term President. Thereafter, equity markets move sideways to Election Day followed by a significant upside move. So far this year, the Dow Jones Industrial Average is following this pattern. Short and intermediate term technical indicators recently have recovered from oversold levels. Seasonal influences for most equity markets and economically sensitive stocks have turned positive on scheduled. On average during the past 20 years, the S&P 500 Index reached a seasonal low on October 15th and the TSX Composite Index reached a seasonal low on October 5th Equity indices and related ETFs Daily Seasonal/Technical Equity Trends for October 21st 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 added 8.18 points (0.38%) last week. Intermediate trend remains down. The Index remains below 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 (also known as the S&P 500 Momentum Barometer) moved higher last week to 34.60 from 29.00. Percent remains intermediate oversold and has started to recover. Percent of S&P 500 stocks trading above their 200 day moving average increased last week to 64.40 from 64.20. Percent remains intermediate overbought but showing early signs of bottoming. Bullish Percent Index for S&P 500 stocks slipped last week to 61.40% from 62.60% and remained below its 20 day moving average. The Index remains intermediate overbought and trending down. Bullish Percent Index for TSX stocks was unchanged last week at 73.58% and remained below its 20 day moving average. The Index remains intermediate overbought and trending down. The TSX Composite Index gained 354.05 points (2.43%) last week. Intermediate uptrend was confirmed on a move above 14,855.69 (Score: 2). Strength relative to the S&P 500 Index remained positive (Score: 2). The Index remained above its 20 day moving average (Score: 1). Short term momentum indicators turned up (Score: 1). Technical score improved last week to 6 from 4. Percent of TSX stocks trading above their 50 day moving average (Also known as the TSX Momentum Barometer) increased last week to 59.24 from 46.22. Percent has recovered to a slightly overbought level and trending up. Percent of TSX stocks trading above their 200 day moving average increased last week to 78.15 from 73.11. Percent remains intermediate overbought. The Dow Jones Industrial Average added 7.33 points (0.04%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remained positive. The Average remained below its 20 day moving average. Short term momentum indicators are trending up. Technical score improved last week to 0 from -2 Bullish Percent Index for Dow Jones Industrial Average stocks slipped last week to 73.33% from 80.00% and dropped below its 20 day moving average. The Index remains intermediate overbought and trending down. Bullish Percent Index for NASDAQ Composite stocks slipped last week to 59.59 from 60.89 and remained below its 20 day moving average. The NASDAQ Composite Index added 43.24 points (0.83%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains neutral. The Index remained below its 20 day moving average. Short term momentum indicators have turned up. Technical score improved last week to 2 from 0. The Russell 2000 Index added 5.69 points (0.47%) last week. Intermediate trend remains up. 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 last week to 0 from -2. The Dow Jones Transportation Average slipped 12.64 points (0.16%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. The Average dropped below its 20 day moving average. Short term momentum indicators are trending down. Technical score slipped last week to 2 from 4. The Australia All Ordinaries Composite Index slipped 4.60 points (0.08%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains positive. The Index dropped below its 20 day moving average. Short term momentum indicators have turned up. Technical score remained last week at 0. The Nikkei Average gained 328.22 points (1.95%) last week. Intermediate uptrend was confirmed on a move above 17,097.59. Strength relative to the S&P 500 Index remained positive. The Average remained above its 20 day moving average. Short term momentum indicators turned up. Technical score improved last week to 6 from 4. Europe iShares added $0.30 (0.79%) 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 last week improved to -4 from -6. The Shanghai Composite Index added 27.13 points (0.89%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. The Index remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6. Emerging Markets iShares added $0.72 (1.95%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index turned positive. Units remain above their 20 day moving average. Short term momentum indicators have turned up. Technical score improved last week to 6 from 0. Currencies The U.S. Dollar Index added another 0.67 (0.68%) last week. Intermediate trend remains up. The Index remains above its 20 day moving average. Short term momentum indicators are trending up. The Euro fell 0.91 (0.83%) last week. Intermediate trend changed to down on a move below 109.54. The Euro remains below its 20 day moving average. Short term momentum indicators are trending down. The Canadian Dollar dropped US 1.13 cents (1.48%) last week. Intermediate trend remains down. The Canuck Buck remains below its 20 day moving average. Short term momentum indicators are trending down. The Japanese Yen added 0.36 (0.38%) last week. Intermediate trend remains down. The Yen remains below its 20 day moving average. Short term momentum indicators have turned up. The British Pound added 0.48 (0.39%) last week. Intermediate trend remains down. The Pound remains below its 20 day moving average. Short term momentum indicators have turned up. Commodities Daily Seasonal/Technical Commodities Trends for October 21st 2016 Green: Increase from previous day Red: Decrease from previous day The CRB Index slipped 0.07 (0.04%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. The Index remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score last week remained at 4. Gasoline added $0.18 per gallon (1.20%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. Gas remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at 4. Crude oil added $0.10 per barrel (0.20%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. Crude remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score dipped last week to 4 from 6. Natural Gas dropped $0.30 per MBtu (9.12%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to neutral from positive. “Natty” moved below its 20 day moving average on Friday. Short term momentum indicators are trending down. Technical score dropped to 0 from 6. The S&P Energy Index added 2.57 points (0.50%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. The Index remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score last week remained at 4. The Philadelphia Oil Services Index dropped 1.34 points (0.81%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index remains positive. The Index remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score last week remained at 2. Gold gained $12.20 per ounce (0.97%) 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 up. Technical score improved last week to -4 from -6. Silver added $0.05 (0.29%) 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 have turned up. Technical score improved last week to -4 from -6. The AMEX Gold Bug Index gained 16.45 points (8.25%) last week. Intermediate trend remains 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 are trending up. Technical score improved last week to 0 from -4. Platinum dropped $7.20 per ounce (0.77%) last week. Intermediate trend remains down. Relative strength remains negative. PLAT remains below its 20 day MA. Momentum turned up. Palladium dropped $27.55 per ounce (4.25%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains negative. PALL remains below its 20 day moving average. Short term momentum indicators are trending down. Score remains -6 Copper dropped 2.2 cent per lb (1.04%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index remains negative. Copper remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at -4. The Base Metals ETN dropped $0.14 (1.03%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to negative from neutral. Units remain below their 20 day moving average. Short term momentum indicators are trending down. Technical score dipped last week to -2 from 0. Lumber dropped $15.40 (4.76%) last week. Trend remains up. Relative strength changed to negative. Lumber remained below its 20 day MA. Momentum remains down The Grain ETN added $0.l22 (0.76%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. Units remain above their 20 day moving average. Short term momentum indicators are trending up. Technical score remained at 6. The Agriculture ETF added $0.65 (1.32%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index turned positive from neutral. Units moved above their 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 6 from 0. Interest Rates Yield on 10 year Treasuries dropped 5.4 basis points (3.01%) last week. Intermediate trend remains up. Yield remains above its 20 day moving average. Short term momentum indicators are trending down. Conversely, price of the long term Treasury ETF added $1.72 (1.30%) last week. Intermediate trend remains down. Units remain below their 20 day moving average. Volatility The VIX Index dropped 2.78 (17.25%) last week. Intermediate trend remains up. The Index dropped below its 20 day moving average on Friday. Sectors Daily Seasonal/Technical Sector Trends for October 21st 2016 Green: Increase from previous day Red: Decrease from previous day StockTwits Released on Friday @EquityClock U.S. Dollar Index breaking out within period of seasonal strength Technical action by S&P 500 stocks to 10:00: Bearish. Breakouts: $RAI, $MSFT, $VRSN, $PYPL. Breakdowns: $AN, $ORLY, $RL, $CPB, $AMG, $CME, $MCO, NAVI, $LLL Editor’s Note: After 10:00 AM EDT, breakouts included DIS, SLG, X, CBS, SNI, ROK and FB. Breakdowns included AIZ and CB. TransAlta $TA.CA a TSX 60 stock moved above $6.21 establishing an intermediate uptrend. U.S. Steel ETF responding to higher steel prices. $SLX moved above $32.82 extending intermediate uptrend. ‘Tis the season for steel stocks to move higher to early January! $SLX $X VALE $VALE moved above $6.17 and $6,26 resuming intermediate uptrend. Cenovus $CVE.CA, a TSX 60 stock moved above $28.89 resuming an intermediate uptrend. Tourmaline $TOU.CA, a “gassy” stock moved above $37.90, extending intermediate uptrend. Editor’s Note: The CEO appeared on BNN on Friday. 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 are examples: WALL STREET RAW RADIO – WITH MARK LEIBOVIT – OCTOBER 22, 2016 – WITH GUESTS SINCLAIR NOE AND HENRY WEINGARTEN http://tinyurl.com/z2ec4qf 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