Tech Talk for Monday October 18th 2021
World equity indices moved higher again last week. Seasonal influences for developed nations naturally turn positive in the first half of October for a trade that frequently lasts to the first week in January.
Observations
Favourable seasonal influences by U.S. and Canadian equity indices were extended last week. Indices have entered into their strongest twelve week period of the year.
Short term short term indicators for U.S. equity indices and sectors (20 day moving averages, short term momentum indicators) moved higher again 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 remained 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) moved higher last week. It remained Overbought and trending higher See Barometer chart at the end of this report.
Short term momentum indicators for Canadian indices and sectors moved higher again last week.
Intermediate term technical indicator for Canadian equity markets moved higher again last week. It remained 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 again last week. It remained Overbought and is trending higher. See Barometer charts at the end of this report.
Consensus estimates for earnings and revenues in 2021 by S&P 500 companies were raised significantly last week following the release of better than consensus third quarter results by 19 S&P 500 companies. According to www.FactSet.com earnings in the third quarter on a year-over year basis are projected to increase 30.0% (versus a previous estimate at 27.6%) and revenues are projected to increase 15.1% (versus a previous estimate at 14.9%). Earnings in the fourth quarter are projected to increase 22.1% (versus 21.8% last week) and revenues are projected to increase 11.6% (versus 11.5% last week). Earnings for all of 2021 are projected to increase 43.2% (versus 42.8% last week) and revenues are projected to increase 15.0%.
Consensus estimates for earnings and revenue growth in 2022 were adjusted slightly. Consensus earnings in 2022 by S&P 500 companies are projected to increase 9.5% (versus 9.7% last week) and revenues are projected to increase 6.8%. Consensus earnings for the first quarter are projected to increase 5.7% (versus 5.5% last week) and revenues are expected to increase 8.5% (versus 8.4% last week).
Economic News This Week
September Capacity Utilization to be released at 9:15 AM EDT on Monday is expected to increase to 76.5 from 76.4 in August. September Industrial Production is expected to increase 0.2% versus a gain of 0.4% in August.
September U.S. Housing Starts to be released at 8:30 AM EDT on Tuesday are expected to increase to 1.620 million units from 1.615 million units in August.
Canadian September Consumer Price Index to be released at 8:30 AM EDT on Wednesday is expected to increase 0.1% versus a gain of 0.2% in August..
October Philly Fed Index to be released at 8:30 AM EDT on Thursday is expected to slip to 24.5 from 30.7 in September.
September Existing Home Sales to be released at 10:00 AM EDT on Thursday are expected to increase to 6.06 million units from 5.88 million units in August.
September Leading Economic Indicators to be released at 10:00 AM EDT on Thursday is expected to increase 0.4% versus a gain of 0.9% in August.
Canadian August Retail Sales to be released at 8:30 AM EDT on Friday is expected to increase 2.0% versus a decline of 0.6% in July. Excluding auto sales, August Retail Sales are expected to increase 3.0% versus a decline of 1.0% in July.
Selected Earnings News This Week
Frequency of U.S. earnings reports ramps up this week. Eighty S&P 500 companies (including eight Dow Jones Industrial Average companies) are scheduled to release results
Reports by TSX 60 companies start to appear including reports by CNR, CP and RCI.
Trader's Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for Oct.15th 2021
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for Oct.15th 2021
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for Oct.15th 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
Greg Schnell discusses "Starting the Fall Run" Following is a link:
Starting the Fall Run | ChartWatchers | StockCharts.com
Greg Schnell also says, "This flag is beautiful", a discussion on copper and copper stocks
This Flag is Beautiful | The Canadian Technician | StockCharts.com
David Keller discusses three charts to watch through year-end to identify health of markets
Three Charts to Watch Through Year-End | The Mindful Investor | StockCharts.com
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 October169th
https://mikesmoneytalks.ca/oct-16th-episode-of-moneytalks/
Thank you to Mark Bunting and www.uncommonsenseinvestor.com for links to the following comments and videos:
Strategist’s Advice to Investors After 35 Years on Wall Street – Uncommon Sense Investor
50 Years of Investment Advice From Retiring Chief Economist – Uncommon Sense Investor
5 Battered Tech Stocks to Buy Now | Kiplinger
5 quality energy stocks with high dividend yields propelled by soaring oil prices - MarketWatch
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
Before the seasonal adjustments, retail sales in the US were down by 3.7% in September, which is actually the second strongest September performance in the past two decades. The average change is a decline of 7.2%. $STUDY $MACRO $XRT $RTH $AMZN #Economy #Consumer #Retail
Oil inventories are on the rise for the first time since February, but with upbeat demand and the return to pre-hurricane levels of production of Oil, we see no reason for concern. equityclock.com/2021/10/14/… $USO $CL_F #Oil $XLE $XOP $OIH $IYE $FRAK $VDE
TSX Composite Index $TSX.CA moved above its inter-day all time high at 20,897.57 to an all-time high extending an intermediate uptrend.
Dow Jones Transportation Average iShares $IYT moved above $257.80 and $257.80 resuming an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to December 3rd. See seasonality charts are available by subscription at www.EquityClock.com
U.S. Broker iShares $IAI moved above $110.72 to an all-time high extending an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to February 15th. See seasonality charts are available by subscription at www.EquityClock.com
Home Depot $HD a Dow Jones Industrial Average stock moved above $343.74 to an all-time high extending an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to February 28th . See seasonality charts by subscription at www.EquityClock.com
Bank of New York Mellon $BK an S&P 100 stock moved above $56.64 extending an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to January 6th. See seasonality charts by subscription at www.EquityClock.com
General Dynamics $GD an S&P 100 stock moved above $205.23 extending an intermediate uptrend.
O’Reilly Automotive $ORLY a NASDAQ 100 stock moved above $629.40 to an all-time high extending an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to December 3rd. See seasonality charts by subscription at www.EquityClock.com
Marriott $MAR a NASDAQ 100 stock moved above $159.98 extending an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to January 6th. See seasonality charts by subscription at www.EquityClock.com
Cognizant Technologies $CTSH a NASDAQ 100 stock moved above $78.36 setting an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to February 28th . See seasonality charts by subscription at www.EquityClock.com
Brookfield Asset Management $BAM.A.CA a TSX 60 stock moved above $72.52 to an all-time high extending an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to February 28th See seasonality charts by subscription at www.EquityClock.com
Lumber stocks and related ETFs continue moving higher. Nice breakout by Interfor $IFC.CA above $33.66 extending an intermediate uptrend.
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Editor's Note: Seasonal influences are favourable to February 28th. See seasonality charts by subscription at www.EquityClock.com
BMO Equal Weight Cdn. Bank ETF $ZEB.CA moved above $132.35 to an all-time high extending an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to December 3rd. See seasonality charts by subscription at www.EquityClock.com
National Bank $NA.CA a TSX 60 stock moved above $100.68 to an all-time high extending an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to December 3rd. See seasonality charts by subscription at www.EquityClock.com
Bank of Montreal $BMO.CA a TSX 60 stock moved above $132.35 to an all-time high extending an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to December 3rd . See seasonality charts by subscription at www.EquityClock.com
Agriculture ETF $COW.CA moved above Cdn$58.85 extending an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to February 15th See seasonality charts by subscription at www.EquityClock.com
Base Metals iShares $XBM.CA moved above $18.05 resuming an intermediate uptrend.
Editor's Note: Seasonal influences are favourable to February 20th. See seasonality charts by subscription at www.EquityClock.com
S&P 500 Momentum Barometers
The intermediate term Barometer added 4.01 on Friday and 13.03 last week to 54.11. It remains Neutral and is trending higher.
The long term Barometer added 0.40 on Friday and 5.41 last week to 73.55. It remains Overbought and is trending higher.
TSX Momentum Barometers
The intermediate term Barometer slipped 2.08 on Friday, but added 15.49 last week to 57.55. It remains Neutral and is trending higher.
The long term Barometer added 0.31 on Friday and 4.83 last week to 66.51. It remains Overbought and is trending higher.
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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