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Tech Talk for Monday September 13th 2021

 

The Bottom Line

Developed world equity indices were mostly lower last week. Notable exceptions were Far East indices. Greatest influences are ramping up of a fourth wave by COVID 19 (negative) and continued expansion of distribution of a COVID 19 vaccine (positive).

 

Observations

North American equity indices were lower last week. The Dow Jones Industrial Average completed a double top pattern near the close on Friday. Downside technical target based on the pattern is to 33,800, a drop of another 2.4% from the close on Friday. North American equity indices have a history of recording a mild correction from their highs in September to their lows in early October followed by resumption of an intermediate uptrend to the end of the year.

Short term short term indicators for U.S. equity indices and sectors (20 day moving averages, short term momentum indicators) moved notably lower last week.

Intermediate term technical indicator for U.S. equity markets (Percent of S&P 500 stocks trading above their 50 day moving average) moved significantly lower last week. It changed from Overbought to Neutral on a move below 60.00 and is trending down. See Barometer charts at the end of this report.

Long term technical indicator for U.S. equity markets (Percent of S&P 500 stocks trading above their 200 day moving average) also moved slower again last week. It changed from Extremely Overbought to Overbought on a move below 80.00 and is trending down. See Barometer chart at the end of this report.

Short term momentum indicators for Canadian indices and sectors moved lower last week from overbought levels.

Intermediate term technical indicator for Canadian equity markets moved lower last week. It changed from Overbought to Neutral on a move below 60.00 and is trending down. See Barometer chart at the end of this report.

Long term technical indicator for Canadian equity markets (Percent of TSX stocks trading above their 200 day moving average) moved lower last week. It remained Overbought and trending down. See Barometer charts at the end of this report.

Consensus estimates for earnings in 2021 by S&P 500 companies eased slightly last week. Earnings in the third quarter are projected to increase 27.9% (versus previous estimate at 28.1%) and revenues are projected to increase 14.8%. Earnings in the fourth quarter are projected to increase 21.5% (versus previous estimate at 21.6%) and revenues are projected to increase 11.2% (versus previous estimate at 11.3). Earnings for all of 2021 are projected to increase 42.6% and revenues are projected to increase 14.9% (versus previous estimate at 14.8%). Earnings in 2022 are projected to increase 9.4% (versus previous estimate at 9.3%) and revenues are projected to increase 6.6% (versus 6.5% last week).

 

Economic News This Week

August Consumer Price Index to be released at 8:30 AM EDT on Tuesday is expected to increase 0.4% versus a gain of 0.5% in July. Excluding food and energy, August Consumer Price Index is expected to increase 0.3% versus a gain of 0.3% in July.

September Empire State Manufacturing Survey to be released at 8:30 AM EDT on Wednesday is expected to slip to 18.00 from 18.30 in August.

August Canadian Consumer Price Index to be released at 8:30 AM EDT on Wednesday is expected to increase 0.1% versus a gain of 0.6% in July.

August Capacity Utilization to be released at 9:15 AM EDT on Wednesday is expected to increase to 76.4 from 76.1 in July. August Industrial Production is expected to increase 0.5% versus a gain of 0.9% in July.

Canadian August Housing Starts to be released at 8:15 AM EDT on Thursday are expected to slip to 269,000 units from 272,200 units in July.

August Retail Sales to be released at 8:30 AM EDT on Thursday are expected to fall 1.0% versus a drop of 1.1% in July. Excluding auto sales, August Retail Sales are expected to slip 0.1% versus a decline of 0.4% in July.

September Philly Fed Index to be released at 8:30 AM ED T on Thursday is expected to slip to 19.0 from 19.4 in August.

July Business Inventories to be released at 10:00 AM EDT on Thursday are expected to increase 0.5% versus a gain of 0.8% in June.

September Michigan Consumer Sentiment to be released at 10:00 AM EDT on Friday is expected to increase to 72.0 from 70.3 in August.

 

Selected Earnings News This Week

Quiet week on both sides of the border for quarterly corporate reports!


Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for September 10th 2021

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for September 10th 2021

Green: Increase from previous day

Red: Decrease from previous day


Sectors

Daily Seasonal/Technical Sector Trends for September 10th 2021

Green: Increase from previous day

Red: Decrease from previous day

All seasonality ratings are based on performance relative to the S&P 500 Index

 

Links to comments from valued providers

Martin Pring discusses nine country ETFs that are starting to emerge

Nine Country ETFs That are Starting to Emerge | ChartWatchers | StockCharts.com

 

Video with David Keller discusses four signs when a bull market is over

https://stockcharts.com/articles/mindfulinvestor/2021/09/four-signs-the-bull-market-is-926.html

 

Tom Browley shows why September 17th to September 30th historically has been the most dangerous two week period in the year for owning U.S. equities.

What You Need to Know About September Weakness | ChartWatchers | StockCharts.com

 

Michael Campbell’s Money Talks: John Johnston is the guest

Entire Show – September 11th (mikesmoneytalks.ca)

 

Thank you to David Chapman and www.EnrichedInvesting.com for a link to their weekly Technical Scoop report

https://enrichedinvesting.com/wp-content/uploads/2021/09/Clouds-gather-divergences-abound-bear-conditions-supply-disrupted-gold-bottom-unconfirmed-energy.pdf

 

Thank you to Mark Bunting and www.uncommonsenseinvestor.com for a link to the following reports and videos

The Power of Compound Investing – Uncommon Sense Investor

 

Video with Jesse Felder

https://uncommonsenseinvestor.com/seven-ways-to-profit-in-a-greedy-market/

 

Registration to The World of ETF Investing Canada Virtual Expo

World of ETF Investing Canada Virtual Expo | September 21 – 22, 2021 (moneyshow.com)

 

I’d like to invite you to join me, Mark Bunting of Uncommon Sense Investor, and John O’Connell, Chairman & CEO of Davis Rea Investment Counsel, for this FREE, exclusive online event on September 22, 2021 at 2:10 ET

 

7 Stocks to Buy on a Dip | Morningstar

 

7 Best Commodity Stocks to Play the Coming Boom | Kiplinger

 

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

Technical Notes released on Friday at

StockTwits.com@EquityClock

The mean reversion that is notorious for the end of the third quarter appears to have begun. Find out where in today’s report. equityclock.com/2021/09/09/… $XLV $XLRE $IYR $XLE $XLF

 

Dow Jones Industrial Average $DJIA moved below 34,690 completing a double top pattern

Editor’s Note: Also, Dow Jones Industrial Average SPDRs $DIA moved below $346.70 completing a double top pattern.

Base metals ETN $DBB (one third weight each in copper, zinc and aluminum) moved above $21.48 to an all-time high extending an intermediate uptrend.

Platinum ETN $PPLT moved below $90.35 extending an intermediate downtrend.

Italy iShares $EWI moved below intermediate support at $32.46

Near the close, Twitter $TWTR moved below $61.50 extending an intermediate downtrend.

Incyte $INCY a NASDAQ 100 stock moved below $71.91 extending an intermediate downtrend.

Take Two $TTWO a NASDAQ 100 stock moved below $155.40 extending an intermediate downtrend.

Agnico-Eagle $AEM.CA a TSX 60 stock moved below Cdn$70.48 extending an intermediate downtrend.

 

S&P 500 Momentum Barometers

The intermediate term Barometer dropped 7.53 on Friday and 16.03 last week to 50.30. It changed from Overbought to Neutral on a drop below 60.00 and is trending down.

The long term Barometer dropped 2.36 on Friday and 7.41 last week to 73.35. It changed from Extremely Overbought to Overbought on a move below 80.00 and is trending down.

 

TSX Momentum Barometers

The intermediate Barometer slipped 1.53 n Friday and 10.61 last week to 54.41. It changed from Overbought to Neutral on a move below 60.00 and is trending down.

The long term Barometer added 1.27 on Friday but dropped 4.29 last week to 71.57. It remains Overbought and trending down.

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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