Tech Talk for Monday November 21st 2022

November 21, 2022 / www.timingthemarket.ca / Article Link

U.S. equity index futures were lower this morning. S&P 500 futures were down 13 points in pre-opening trade.

Walt Disney advanced $8.19 to $99.99 after Bob Iger was renamed Chief Executive Offices effective immediately.

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JM Smucker gained $1.60 to $146.14 after reporting higher than consensus fiscal third quarter revenues and earnings. The company also raised guidance for the current fiscal year.

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Home Capital Group (HCG.TO Cdn$27.05) is expected to open higher after Smith Financial offered to purchase the company at Cdn$44.00.

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Jacobs Engineering added $1.78 to $176.04 after reporting higher than consensus fiscal fourth quarter revenues and earnings.

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EquityClock's Daily Comment

 

Headline reads "The risk to the overwhelming positive bias for stocks suggested of pre-election years remains the onset of an economic recession".

http://www.equityclock.com/2022/11/19/stock-market-outlook-for-november-21-2022/

 

The Bottom Line

Interesting phenomenon!

Historically, the best two consecutive trading days to own the S&P 500 Index has been the day before U.S. Thanksgiving and the day after U.S. Thanksgiving. Probable reason is dominance by retail investment activity at a time when most institutional investors either are on holidays or have given limited trading authority to support staff. Average gain per period since 1950 was 0.6%. The trade was profitable approximately 75% of the time including 80% of the time during the past 20 periods (including a drop last year by 2.05%). Buying by retail investors is triggered partially by anticipation of strong "Black Friday" sales. This year, gains by "Black Friday" sales are expected to be higher than average, but mainly because prices are significantly higher due to inflation.

U.S. equity indices have a history of moving higher until the end of November.

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Charts courtesy of StockTraderAlmanac.com

Consensus for Earnings and Revenues for S&P 500 Companies

Analysts once again lowered earnings estimates for the remainder of 2022. As of Friday, 94% of S&P 500 companies had reported third quarter results. According to www.factset.com third quarter earnings on a year-over-year basis are expected to increase 2.2% and revenues are expected to increase 10.8% (versus an increase of 10.6% last week). Fourth quarter earnings are expected to decrease 2.1% (versus previous decrease of 1.7%) and revenues are expected to increase 4.5%. (versus previous increase of 4.4%) For 2022 earnings are expected to increase 5.2% (versus previous increase of 5.3%) and revenues are expected to increase 10.5% (versus previous increase of 10.4%.

Preliminary earnings estimates for 2023 also moved lower. According to www.factset.com first quarter 2023 earnings are expected to increase 1.6% (versus previous estimate at 1.7%) and revenues are expected to increase 3.9% (versus previous estimate at 3.8%). Second quarter 2023 earnings are expected to increase 0.9% (versus previous estimate at 1.1%) and revenues are expected to increase 1.3% (versus previous estimate at 1.1%). For all of 2023, earnings are expected to increase 5.7% (versus previous estimate at 5.8%)) and revenues are expected to increase 3.4% (versus previous estimate at 3.3%).

 

Economic News This Week

Canadian September Retail Sales released at 8:30 AM EST on Tuesday are expected to increase 0.2% versus a gain of 0.7% in August. Excluding auto sales, Canadian September Retail Sales are expected to increase 0.4% versus a gain of 0.7% in August.

October Durable Goods Orders released at 8:30 AM EST on Wednesday are expected to increase 0.4% versus a gain of 0.4% in September. Excluding transportation orders, October Durable Goods Orders are expected to increase 0.1% versus a decline of 0.5% in September.

October U.S. New Home Sales released at 10:00 AM EST on Wednesday are expected to drop to 570,000 from 603,000 in September.

November Michigan Consumer Sentiment released at 10:00 AM EST on Wednesday is expected to increase to 55.0 from 54.7 in October.

 

Selected Earnings News This Week

Ten S&P 500 companies are scheduled to release third quarter results this week.

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Trading during the U.S. Holiday

U.S. Thanksgiving is held on Thursday. Trading on U.S. exchanges slows on Wednesday afternoon. U.S. exchanges are closed on Thursday and are closed at 1:00 PM EST on Friday. Traditionally, trading activity in Canadian equity market has been well below average during the three day U.S. holiday period. Tech Talk will be available on all three days.

 

Trader's Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for November 18th 2022

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for November 18th 2022

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for November 18th 2021

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Green: Increase from previous day

Red: Decrease from previous day

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

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Technical Notes for Friday

Crude Oil ETN $USO moved below intermediate support at $67.85.

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Johnson & Johnson $JNJ) a Dow Jones Industrial Average stock moved above $175.39 extending an intermediate uptrend.

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Ross Stores $ROSS a NASDAQ 100 stock moved above $109.62 extending an intermediate uptrend.

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Tesla $TSLA a NASDAQ 100 stock moved below $179.83 completing a long term Head & Shoulders pattern.

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Reuters $TRI.TO a TSX 60 stock moved above $150.94 extending an intermediate uptrend.

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Next Canadian Association for Technical Analysis Presentation

It is scheduled at 8:00 PM EST on Thursday November 24th. Speaker is Brooke Thackray. Not a member of CATA? See Home – Canadian Association for Technical Analysis (clubexpress.com)

 

Links offered by valued providers

Greg Schnell discusses "Commodities: Economic indicators you can't ignore".

Commodities: Economic Indicators You Can’t Ignore | The Canadian Technician | StockCharts.com

 

Dave Keller says "Limited upside until this chart changes".

Limited Upside Until This Chart Changes | The Mindful Investor | StockCharts.com

 

Mary Ellen McGonagle says "Thanksgiving week is historically positive. Will this year deliver a blockbuster or a turkey"?

Thanksgiving Week is Historically Positive. Will This Year Deliver a Blockbuster or a Turkey? | The MEM Edge | StockCharts.com

 

Erin and Carl Swenlin note "Mortgage Rates Drop Sharply. Time to review XLRE".

Mortgage Rates Drop Sharply – Time to Review XLRE | DecisionPoint | StockCharts.com

 

The Pitch: Top selections by three technical analysts. Includes comments on NASDAQ, Gold , Silver Miners, Metals &Mining, Russell 2000 and Biotech.

The Pitch | Julius de Kempenaer, John Kosar, CMT, Jeffrey Huge, CMT w/ David Keller, CMT (11.18.22) - YouTube

 

Bruce Fraser asks "Will this rally continue"? Includes a comment on seasonality during a U.S. mid-term election year.

Will This Rally Continue? | Bruce Fraser | Power Charting (11.18.22) - YouTube

 

Christine Pool's Top Picks on BNN for November 18th

https://www.youtube.com/watch?v=qy2g_gn3CbU

 

Links from Mark Bunting and www.uncommonsenseinvestor.com

Five Copper Stocks for the Green Power Shift – Uncommon Sense Investor

KEYNOTE: Andrew Miller | Red Cloud’s Mining Showcase 2022 - YouTube

Glass Half Full As Consumers Keep Spending & GDP Remains Strong – Uncommon Sense Investor

Five Best Dow Dividend Stocks to Buy Now – Uncommon Sense Investor

The 15 Best Stocks to Buy for the Rest of 2022 | Kiplinger

 

Mark Leibovit comment for November 17th

From The Floor of the Las Vegas Cannabis Convention - HoweStreet

 

Victor Adair's Desk Notes for November 19th 2022

https://victoradair.ca/trading-desk-notes-for-november-19-2022/

 

Michael Campbell's Money Talks for November 19th

Michael Campbell's MoneyTalks - Complete Show (mikesmoneytalks.ca)

 

Technical Scoop for November 21st from David Chapman and www.enrichedinvesting.com

https://enrichedinvesting.com/wp-content/uploads/2022/11/FTX-domination-bubble-bottoming-crypto-pain-volatility-comparison-golden-relic-market-falter-oil-dip.pdf

 

S&P 500 Momentum Barometers

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The intermediate term Barometer added 3.80 on Friday and 1.00 last week to 83.00. It remains Overbought. Trend remains up.

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The long term Barometer added 4.60 on Friday and 0.60 last week to 56.20. It remains Neutral. Trend remains up.

 

TSX Momentum Barometers

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The intermediate term Barometer was unchanged on Friday, but down 5.93 last week to 71.19. It remains Overbought. Trend has started to move down.

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The long term Barometer added 2.54 on Friday, but dropped 7.63 last week to 43.64. It remains Neutral. Trend has started to move down.

Disclaimer: Seasonality ratings 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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