Tech Talk for Monday October 11th 2021
U.S. equity index futures were lower this morning. S&P 500 futures were down 16 points in quiet pre-opening trade. Today is a partial holiday in the U.S.: The bond market is closed and equity markets are open.
WTI crude oil surged $2.61 to $81.96 per barrel.
Starbucks slipped $1.33 to $112.55 after Deutsche Bank lowered its rating from Buy to Hold.
Zoom dropped $1.26 to $253.79 after Stifel Nicolaus reduced its target price from $350 to $300.
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2021/10/clip_image0021-5.png "clip_image002[1]")
Comcast eased $0.93 to $53.77 after Raymond James downgraded the stock from Outperform to Market Perform
Southwest Airlines fell $1.42 to $52.50 after the company cancelled over 1,000 flights yesterday.
![clip_image004[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2021/10/clip_image0041-1.png "clip_image004[1]")
The Bottom Line
World equity indices were mostly higher last week. Seasonal influences for developed nations usually turn positive at this time of year for a trade that frequently lasts to the first week in January.
Observations
Start of favourable seasonal influences by U.S. and Canadian equity indices for their traditional yearend rally appeared on schedule last week.
Short term short term indicators for U.S. equity indices and sectors (20 day moving averages, short term momentum indicators) moved higher 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 higher last week. It changed from Oversold to Neutral and is trending higher. See Barometer chart 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) was virtually unchanged last week. It remained Overbought and trending lower See Barometer chart at the end of this report.
Short term momentum indicators for Canadian indices and sectors moved higher last week.
Intermediate term technical indicator for Canadian equity markets moved higher last week. It changed from Oversold to Neutral and is trending higher. 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 higher last week. It changed from Neutral to Overbought. See Barometer charts at the end of this report.
Consensus estimates for earnings and revenues in 2021 by S&P 500 companies were virtually unchanged again last week. According to www.FactSet.com earnings in the third quarter are projected to increase 27.6% and revenues are projected to increase 14.9%.. Earnings in the fourth quarter are projected to increase 21.8% (versus 21.5% last week) and revenues are projected to increase 11.5% (versus 11.4% last week). Earnings for all of 2021 are projected to increase 42.8% (versus 42.6% last week) and revenues are projected to increase 15.0%.
Consensus estimates for earnings and revenue growth in 2022 increased slightly. Consensus earnings in 2022 by S&P 500 companies are projected to increase 9.7% (versus 9.6% last week) and revenues are projected to increase 6.8% (versus 6.7% last week). Consensus earnings for the first quarter are projected to increase 5.5% (versus 5.3% last week) and revenues are expected to increase 8.4% (versus 8.3% last week).
Economic News This Week
Today is a statutory holiday in Canada and a partial holiday in the U.S.
September Consumer Price Index to be released at 8:30 AM EDT on Wednesday is expected to increase 0.3% versus a gain of 0.3% in August. Excluding food and energy, September Consumer Price Index is expected to increase 0.2% versus a gain of 0.1% in August.
FOMC Meeting Minutes are released at 2:00 PM EDT on Wednesday.
September Producer Price Index to be released at 8:30 AM EDT on Thursday is expected to increase 0.6% versus a gain of 0.7% in August. Excluding food and energy, September Producer Price Index is expected to increase 0.4% versus a gain of 0.6% in August.
September Retail Sales to be released at 8:30 AM EDT on Friday are expected to slip 0.2% versus a gain of 0.7% in August. Excluding auto sales, September Retail Sales are expected to increase 0.5% versus a gain of 1.8% in August.
October Empire State Manufacturing Survey to be released at 8:30 AM EDT on Friday is expected to slip to 27.00 from 34.30 in September.
August Business Inventories to be released at 10:00 AM EDT are expected to increase 0.6% versus a gain of 0.5% in July.
October Michigan Consumer Sentiment to be released at 10:00 AM EDT is expected to increase to 73.8 from 72.8 in September
Selected Earnings Reports This Week
Nineteen S&P 500 companies (including five Dow Jones Industrial Average companies) are scheduled to release quarterly earnings reports this week. Focus this week is on U.S. Banks
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for Oct.8 2021
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for Oct.8 2021
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for Oct.8 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)
Links from Valued Providers
Thank you to David Chapman and www.EnrichedInvesting.com for a link to the following weekly Technical Scoop report:
Michael Campbell's Money Talks for October 9th
We're On! Entire Show - Oct 9th (mikesmoneytalks.ca)
Thank you to Mark Bunting and www.uncommonsenseinvestor.com for links to the following comments and videos:
Five Reasons the Oil Rally Will Last – Uncommon Sense Investor
Why the Unwinding of the Credit Bubble "Will Not Be Pretty." – Uncommon Sense Investor
https://uncommonsenseinvestor.com/positioning-your-portfolio-for-rising-rates-in-an-expensive-mark
These Stocks Can Grow Faster Than the Economy & Inflation – Uncommon Sense Investor
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
So far, the market is acting according to plans, but we can always pivot, as we are today with Natural Gas. equityclock.com/2021/10/07/… $UNG $UNL $NG_F $UGAZ $FCG #NatGas
Access to seasonality charts is available for subscriber to www.EquityClock.com
Editor's Note: Natural gas prices in the U.S. have a history of moving higher to early December. See: https://charts.equityclock.com/natural-gas-futures-ng-seasonal-chart
Platinum ETN $PPLT moved above $94.38, $96.06 and $96.46 completing a Reverse Head & Shoulders pattern.
Precision Drilling $PD.CA Canada’s largest oil services company moved above Cdn$54.72 extending an intermediate uptrend.
Cenovus Energy $CVE.CA a TSX 60 stock moved above Cdn$14.18 to a four year high extending an intermediate uptrend.
Lumber futures $LUMBER moved above $695.00 and $700.00 completing a classic reverse Head & Shoulders pattern.
S&P 500 Momentum Barometers
The intermediate term Barometer slipped 1.40 on Friday, but gained 8.41 last week to 41.08. It changed from Oversold to Neutral on a recovery above 40.00 and is trending up.
The long term Barometer dropped 3.01 on Friday and slipped 0.20 last week. It remains Overbought
TSX Momentum Barometers
The intermediate term Barometer advanced 2.06 on Friday and gained 8.88 last week to 42.06. It changed from Oversold to Neutral on a recovery above 40.00 and is trending up.
The long term Barometer added 0.29 on Friday and 1.87 last week. It changed from Neutral to Overbought on a recovery about 60.00.
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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