Tech Talk for Monday May 30th 2022
Technical evidence that North American equity indices have passed an intermediate low appeared last week. Look for a bottoming process between now and the next FOMC meeting on June 14th-15th.
Observations
Consensus earnings estimates for S&P 500 companies on a year-over-year basis in the first quarter of 2022 virtually were unchanged last week. Ninety seven percent of companies have reported quarterly results to date. According to www.FactSet.com first quarter earnings on a year-over-year basis increased 9.2% (versus 9.1% last week) and revenues increased 13.6%.
Consensus earnings and revenue estimates for S&P 500 companies beyond the first quarter on a year-over-year basis also virtually were unchanged last week. According to www.FactSet.com second quarter earnings are expected to increase 4.1% and revenues are expected to increase 9.7%. Earnings in the third quarter are expected to increase 10.2% (versus 10.1% last week) and revenues are expected to increase 9.1% (versus 9.2% last week). Earnings in the fourth quarter are expected to increase 9.9% (versus 9.8% last week) and revenues are expected to increase 7.0%. Earnings on a year-over-year basis for all of 2022 are expected to increase 10.1% (versus 10.0% last week) and revenues are expected to increase 10.2%.
Economic News This Week
U.S. equity markets are closed today for the Memorial Day holiday.
Canadian March GDP to be released at 8:30 AM EDT on Tuesday is expected to increase 0.8% versus a gain of 1.1% in February.
May Chicago PMI to be released at 9:45 AM EDT on Tuesday is expected to increase to 57.1 from 56.4 in April.
April Construction Spending to be released at10:00 AM EDT on Wednesday is expected to increase 0.5% versus a gain of 0.1% in March.
May Manufacturing ISM PMI to be released at 10:00 AM EDT on Wednesday is expected to slip to 54.5 from 55.4 in April.
Bank of Canada announces its interest rate decision at 10:00 AM EDT Wednesday. The rate charged to major banks is expected to increase from 1.00% to 1.50%.
Beige Book is released at 2:00 PM EDT on Wednesday.
April Factory Orders to be released at 10:00 AM EDT on Thursday are expected to increase 0.8% versus a gain of 1.8% in March.
May Employment Report is to be released at 8:30 AM EDT on Friday. May Non-farm Payrolls are expected to drop to 310,000 from 428,000 in April. May Unemployment Rate is expected to remain at 3.6% set in April. May Average Hourly Earnings are expected to increase 0.4% versus a gain of 0.3% in April. On a year-over-year basis May Hourly Earnings are expected to increase 5.2% versus a gain of 5.5% in April.
May Non-Manufacturing ISM PMI to be released at 10:00 AM EDT on Friday is expected to slip to 56.0 from 57.1 in April.
Earnings News This Week
Only seven S&P 500 companies and one Dow Jones Industrial Average company (Salesforce.com) are scheduled to release quarterly results this week
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for May 27th 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for May 27th 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for May 27th 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 (except TSX)
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
Links provided by valued providers
Jane Gallina is "Searching For Bullish Trades in a Bear Market"
https://www.youtube.com/watch?v=FTuVxe6UI7g
Greg Schnell says "It's all about a base".
It’s All About A Base | The Canadian Technician | StockCharts.com
David Keller says "S&P and NASDAQ rip to new swing highs"
S&P and Nasdaq Rip to New Swing Highs | David Keller, CMT | The Final Bar (05.27.22) - YouTube
Mary Ellen Mcgonagle asks "Market low is in. Will it last?"
Market Bottom Is In! Will It Last? | Mary Ellen McGonagle | The MEM Edge (05.27.22) - YouTube
Michael Campbell's Money Talks for May 28th
https://mikesmoneytalks.ca/may-28th-episode/?mc_cid=d40b1e3a9e&mc_eid=592546b4b5
Mark Bunting and www.uncommonsenseinvestor.com links
Bull Market Rhymes: Hi-lights from Howard Marks’ Latest Memo – Uncommon Sense Investor
7 Great GARP Stocks to Buy Now | Kiplinger
Wall Street Is Buying Treasuries Again in Bet Worst Is Over (yahoo.com)
An 8-Step Plan to Tackle a Bear Market | Morningstar
McCullough: Bear Markets Bounce On Low Volume (hedgeye.com)
Victor Adair's Trading Notes for May 28th
https://www.howestreet.com/2022/05/trading-desk-notes-for-may-28-2022/
Technical Scoop for May 30th
Technical Notes from Friday
Gasoline ETN $UGA moved above $72.50 to an all-time high extending an intermediate uptrend.
Chile iShares $ECH moved above $30.00 extending an intermediate uptrend.
Semiconductor ETF $SMH moved above $75.73 and semiconductor iShares SOXX moved above $421.87 completing a short term double bottom patterns
Auto ETF $CARZ moved above $50.57 completing a short term double bottom pattern.
U.S. Telecommunications iShares IYZ moved above $27.40 completing a short term reverse Head & Shoulders pattern.
NASDAQ 100 and S&P 100 stocks that completed short term double bottom patterns included ADBE, LRCX, MRVL, NVDA, NXPI, SPLK, CHKP, ISRG, MCHP, FAST and SBUX
Biotech ETFs $FBT $IBB $BBH moved above short term double bottom patterns setting uptrends.
Eli Lilly LLY an S&P 100 stock moved above $312.95 extending an intermediate uptrend.
Pembina Pipeline $PPL.TO, a TSX 60 stock moved above $51.02 to an all-time high extending an intermediate uptrend.
Nutrien NTR.TO a TSX 60 stock moved below Cdn$120.25 completing a Head & Shoulders pattern
S&P 500 Momentum Barometers
The intermediate term Barometer advanced 14.43 on Friday and jumped 32.26 last week to 46.49. It changed from Oversold to Neutral on a recovery above 40.00. Trend is up.
The long term Barometer added 4.41 on Friday and 12.03 last week to 38.68. It remains Oversold. Trend is up.
TS X Momentum Barometers
The intermediate term Barometer added 3.96 on Friday and 9.35 last week to 32.60 It remains Oversold. Trend is up
The long term trend added 2.20 on Friday and 6.76 last week to 40.97. It changed from Oversold to Neutral on a recovery above 40.00. Trend is up.
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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