Next Tech Talk report Next report will be released on Monday October 30th 2017 WALL STREET RAW RADIO – OCTOBER 21, 2017 WITH HOST, MARK LEIBOVIT WITH DON VIALOUX, HARRY BOXER, HENRY WEINGARTEN, BILL MURPHY AND SINCLAIR NOE http://tinyurl.com/y8myu22e The Bottom Line Equity markets continue to climb a “wall of worry”. Technical parameters are extremely overbought, but have yet to show signs of rolling over. Seasonal influences have turned positive, particularly for economic sensitive sectors (e.g. Materials, Industrials, Financials and Technology). Preferred strategy is to continue to hold seasonally attractive equities and Exchange Traded Funds for now with the understanding the next intermediate trend will be flat to down. Economic News This Week Canadian Federal Government Fall Economic Statement is released on Tuesday September Durable Goods Orders to be released at 8:30 AM EDT on Wednesday are expected to increase 1.0% versus a 2.0% increase in August. Excluding Transportation, September Durable Goods Orders are expected to increase 0.5% versus a gain of 0.5% in August. September New Home Sales to be released at 10:00 AM EDT on Wednesday are expected to slip to 555,000 from 560,000 in August. Bank of Canada Monetary Policy Statement is released at 10:00 AM EDT on Wednesday. No change in overnight lending rate is anticipated. European Central Bank Monetary Policy is to be released at 7:45 AM EDT on Thursday. Statement to be made at 8:30 AM EDT Weekly Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to increase to 235,000 from 222,000 last week. Third Quarter GDP growth estimate to be released at 8:30 AM EDT on Friday is expected to grow at a 2.6% annualized rate versus growth at a 3.1% rate in the second quarter. October Consumer Sentiment Index to be released at 10:00 AM EDT on Friday is expected to remain unchanged from September at 101.1 Earnings News This Week Observations Technical action by individual S&P 500 stocks was bullish again last week. Notable among stocks breaking resistance were Industrials. Notable among stocks breaking support were Energy stocks. Number of stocks breaking resistance totaled 48 while number of stocks breaking support totaled 20. Number of stocks trading in an uptrend increased to 305 from 290, number of stocks trading in a neutral trend dropped to 73 from 78 and number of stocks in a downtrend dropped to 122 from 132. The Up/Down ratio increased last week to (305/122=) 2.50 from 2.20. Medium term technical indicators (Percent of stocks trading above their 50 day moving average, Bullish Percent Index) remain at intermediate overbought levels, but have yet to show signs of rolling over Short term technical indicators (short term momentum, above/below 20 day moving average) for North American equity indices mostly moved higher last week to overbought levels, but have yet to show signs of rolling over. Short term indicators for commodity and commodity sensitive indices/ETFs turned lower. Seasonality on a wide variety of equity indices, commodities and sectors began to turn neutral/positive in early October and continue to improve. During the past 20 years, the S&P 500 Index and TSX Composite Index normally bottomed on October 10th. See updated ratings for markets, commodities and sectors below. Earnings reports from U.S. companies continue to pour in this week. 189 S&P 500 companies are scheduled to release fiscal third quarter results including 12 Dow Industrial companies. The outlook for S&P earnings and revenues remains positive. 6 companies have issued negative fourth quarter guidance and 12 companies have issued positive guidance. 17% reported third quarter results by the end of last week. According to FactSet, third quarter earnings are expected to increase 1.7% (down from 2.2% last week) on a 5.1% increase in revenues (up from 5.0% last week). Fourth quarter earnings are expected to increase 11.4% on a 5.9% increase in revenues. For all of 2017, earnings are expected to increase 9.2% (up from 9.1%) on a 5.9% increase in revenues (up from 5.8%). First quarter 2018 earnings are expected to increase 10.7% on a 6.3% increase in revenues. Second quarter 2018 earnings are expected to increase 10.4% on a 6.1% increase in revenues. Short term uncertainties remain, including assessment of impact of three hurricanes on the U.S. economy, North Korean “sabre rattling”, slow progress by Congress to pass crucial legislation (notably tax reform) and increased scrutiny by special council on Russia’s influence on the Presidential election. Prospects beyond the third quarter report season are exceptional for U.S. based companies with international exposure. Consensus for S&P 500 earnings on a year-over-year are expected to exceed 10% in the fourth quarter of 2017, first quarter of 2018 and second quarter of 2018. Earnings will benefit significantly from weakness in the U.S. Dollar on a year-over-year basis when revenues and earnings from international operations will benefit from higher valued foreign currencies. The U.S. Dollar Index averaged 100 in the fourth quarter of 2016 and 101 in the first quarter of 2017. If the U.S. Dollar Index currently at 93.58 maintains that average in the fourth quarter of 2017, revenues and earnings from international operations will be boosted from currency alone by 7.0% in the fourth quarter of 2017 and by 8.0% in the first quarter of 2018. A word of caution on U.S. equity markets in the short term! When the Relative Strength Index for the Dow Jones Industrial Average moves above 70%, the Average is considered overbought. On Friday, the Relative Strength Index closed at 88.10%, a level not seen during the past 20 years. Historically, a rollover of the Index from near this level has been followed at best by a flat trend and, more frequently, by a downtrend lasting 3-6 months. The TSX Composite Index is in a similar position. Its Relative Strength Index touched 80% early last week, the highest level in over a decade. This Index also is vulnerable to a flat to downward correction during the next 3-6 months when RSI rolls over. The time to buy both markets is when their Relative Strength Index is near or below the 30% level and are starting to turn up. Equity Indices and Related ETFs Daily Seasonal/Technical Equity Trends for October 20th 2017 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. S&P 500 Index gained 22.04 points (0.86%) last week to another all-time high. The Index remains above its 20 day moving average. Short term momentum indicators continue to trend up Percent of S&P 500 stock trading above their 50 day moving average (also known as the S&P 500 Momentum Barometer) increased last week to 78.00 from 75.80. Percent remains intermediate overbought, 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 76.00 from 74.60. Percent remains intermediate overbought, but has yet to show signs of peaking. Bullish Percent Index for S&P 500 stocks increased last week to 73.00 from 71.60 and remained above its 20 day moving average. The Index remains intermediate overbought. Bullish Percent Index for TSX stocks increased last week to 69.60 from 67.20 and remained above its 20 day moving average. The Index remains intermediate overbought, but has yet to show signs of peaking. TSX Composite Index gained 50.05 points (0.32%) last week. Intermediate trend remains up (Score: 2). Strength relative to the S&P 500 Index changed last week to Neutral from Positive (Score: 0). The Index remains above its 20 day moving average (Score: 1). Short term momentum indicators have turned down (Score: -1). Technical score dropped last week to 2 from 6. Percent of TSX stocks trading above their 50 day moving average (also known as the TSX Momentum Barometer) dropped last week to 71.19 from 81.07. Percent remains intermediate overbought and has rolled over. Percent of TSX stocks trading above their 200 day moving average slipped last week to 62.55 from 64.20. Percent remains intermediate overbought and showing early signs of rolling over. Dow Jones Industrial Average gained 456.91 points (2.00%) last week to another 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. Technical score remained last week at 6. Bullish Percent Index for Dow Jones Industrial stocks increased last week to 86.67 from 76.67 and moved back above its 20 day moving average. Percent remains intermediate overbought. Bullish Percent Index for NASDAQ Composite stocks slipped last week to 64.97 from 65.26 but remained above its 20 day moving average. NASDAQ Composite Index gained another 23.25 points (0.35%) last week to another all-time high. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Neutral from Positive. The Index remains above its 20 day moving average. Short term momentum indicators have turned down. Technical score dropped last week to 2 from 6. Russell 2000 Index gained 6.59 points (0.44%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed last week to Neutral from Positive. The Index remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to 2 from 4. Dow Jones Transportation Average gained 35.88 points (0.36%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed last week to Negative from Positive. The Average remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to 0 from 4. Australia All Ordinaries Composite Index gained 83.90 points (1.43%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed last week to Positive from Neutral. The Index remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 6 from 4. The Nikkei Average gained another 302.46 points (1.43%) 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 continue to trend up. Technical score remained last week at 6. Europe iShares slipped $0.32 (0.68%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed last week to Negative from Neutral. Units remain above their 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to 0 from 4. Shanghai Composite Index dropped 11.87 points (0.35%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Negative. The Index remains above its 20 day moving average. Short term momentum indicators have turned down. Technical score dropped last week to 0 from 2. Emerging Markets iShares dropped $0.40 (0.86%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed last week to Neutral from Positive. Units remain above their 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to 2 from 6. Currencies The U.S. Dollar Index added 0.99 (1.07%) last week. Intermediate trend remains Neutral. The Dollar moved above its 20 day moving average. Short term momentum indicators have just turned up. Note that a move above 94.10 will complete a Head & Shoulders reversal pattern. The Euro dropped 0.45 (0.38%) last week. Intermediate trend remains Neutral. The Euro moved back above its 20 day moving average. Short term momentum indicators are trending up. Canadian Dollar dropped US0.94 cents (1.17%) last week. Intermediate trend remains up. Short term momentum indicators turned down on Friday. The Japanese Yen dropped 1.26 (1.41%) last week. Intermediate trend remains up. The Yen remains below its 20 day moving average. Short term momentum indicators are trending down. British Pound dropped 1.11 (0.83%) last week. Intermediate trend remains up. The Pound remains below its 20 day moving average. Short term momentum indicators are mixed. Commodities and Related ETFs Daily Seasonal/Technical Commodities Trends for October 20th 2017 Green: Increase from previous day Red: Decrease from previous day * Excludes adjustment from rollover of futures contracts The CRB Index slipped 0.71 (0.38%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Neutral. The Index remains above its 20 day moving average. Short term momentum indicators are trending down. Technical score dipped last week to 2 from 4. Gasoline added 2.1 cents per gallon (1.29%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Neutral. Gas remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 0. Crude Oil added $0.39 per barrel (0.76%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Neutral. Crude remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 4 from 2. Natural Gas dropped $0.09 per MBtu (3.00%) last week. Intermediate trend remains up. Strength relative to the S&P 500 remains Negative. “Natty” moved below its 20 day moving average. Short term momentum indicators are trending up. Technical score dropped last week to 0 from 2. S&P Energy Index dropped 2.25 points (0.45%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Negative from Neutral. The Index dropped below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -2 from 2. Philadelphia Oil Services Index dropped 6.38 points (4.62%) last week. Intermediate trend remains Neutral. Strength relative to the S&P 500 Index changed to Negative from Neutral. The Index remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -4 from -2. Gold dropped $24.10 per ounce (1.85%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Negative. Gold moved back below its 20 day moving average. Short term momentum indicators have turned down. Technical score dropped last week to -2 from 2. Silver dropped $0.33 per ounce (1.90%) last week. Intermediate trend remains Neutral. Strength relative to the S&P 500 Index remains Neutral. Silver remains above its 20 day moving average. Short term momentum indicators have turned down. Technical score dropped last week to 0 from 2. AMEX Gold Bug Index dropped 5.24 points (2.58%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Negative. The Index moved below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -4 from 2. Platinum dropped $21.10 per ounce (2.23%) last week. Intermediate trend remains Neutral. Relative Strength: Neutral. Dropped below its 20 day MA. Momentum turned Negative. Palladium dropped $15.65 per ounce (1.59%) last week. Intermediate trend remains up. Strength relative to the S&P 500 remains Positive. PALL remains above its 20 day MA. Short term momentum indicators have turned down. Technical score dropped to 4 from 6. Copper added $0.04 per lb. (1.28%) 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 turned down. Technical score dropped last week to 4 from 6. BMO Base Metals ETF slipped $0.12 (1.00%) 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 have turned down. Technical score remained last week at 4. Lumber added $3.20 (0.75%) last week. Trend remains Up. Relative strength remains Positive. Lumber remains above its 20 day MA. Momentum remains up. Score remained at 6. Grain ETN dropped $0.71 92.74%) last week. Trend remains Neutral. Relative strength remains Neutral. Units dropped below their 20 day MA. Momentum turned Negative. Score: -2 Agriculture ETF added $0.12 (0.20%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Neutral. Units remain above their 20 day moving average. Short term momentum indicators are trending down. Technical score slipped last week to 2 from 4. Sectors Daily Seasonal/Technical Sector Trends for October 20th 2017 Green: Increase from previous day Red: Decrease from previous day Interest Rates Yield on 10 Year Treasuries increased 10.1 basis points (4.43%) last week. Intermediate trend remains Neutral. Yield remains above its 20 day moving average. Short term momentum indicators are trending up. Conversely, long term Treasury ETF lost $1.87 (1.49%) last week. Intermediate trend remains up. Units dropped below their 20 day moving average on Friday. Volatility The VIX Index added 0.46 (4.84%) last week. Intermediate trend remains down. The Index remains above its 20 day moving average. StockTwits Released on Friday @EquityClock Biotech ETF $BBH moved below $132.33 completing a double top pattern. Technical action by S&P 500 stocks to 10:00: Bullish. Breakouts: $FOX $DFS $SYF $HIG $KIM $CFG $XL $HCA. Breakdowns: $PG $BHGE $SLB. Editor’s Note: After 10:00 AM EDT, breakouts included NTAP, BHF, TMO, MAS, CRM, GT, RHI, SRCL and MLM. Breakdown: MAA. Intact Financial $IFC.CA moved above $104.33 to all-time high extending an intermediate uptrend. Industrial Alliance $IAG.CA moved above $57.99 extending an intermediate uptrend. First Trust U.S. Industry ETF $FHG.CA, Vialoux top pick on BNN moved above $26.03 extending uptrend. Gold stocks and related ETFs under technical pressure with U.S. Dollar strength: $AEM.CA $ABX $GDXJ Gildan $GIL.CA moved above $39.92 extending an intermediate uptrend. US Existing Home Sales down 13.1% (NSA) in September, better than 14.9% average decline for month. #Housing $MACRO Canada #CPI closing the gap versus seasonal average trend, up 1.9% YTD. #CDNecon #CAD $MACRO Canada Retail Sales higher by 1.9% (NSA) in August, diverging from 0.9% avg. decline for month. #CDNEcon #CAD $MACRO Disclaimer: Seasonality and technical ratings offered in this report 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