Tech Talk for Monday April 9th 2018

U.S. equity index futures were higher this morning. S&P 500 futures were up 11 points in pre-opening trade. Early strength is attributed to downplay on a potential trade war with China by White House officials over the weekend.

Merck gained $1.34 to $54.70 following release of positive results from trials for its Keytruda cancer treatment.

General Motors added $0.83 to $38.51 after Morgan Stanley upgraded the stock to Overweight from Equal Weight

Russia ETF dropped $1.86 to $20.51 after the U.S. announced a new round of sanctions against Russian entities and individuals.

Boeing gained $5.08 to $331.20 after announcing the additional sale of 47 787 Dreamliner aircraft to American Airlines valued at $12 billion.

EquityClock's Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/04/06/stock-market-outlook-for-april-9-2018/

Note seasonality charts on Discretionary sector relative to the Staples sector, 30 year Treasury prices, Non-farm Payrolls, Canadian Employment and the Canadian Dollar.

WALL STREET RAW RADIO

WITH HOST, MARK LEIBOVIT

APRIL 7, 2018

GUESTS: DON VIALOUX, BILL MURPHY (GATA.ORG), HARRY BOXER, AND SINCLAIR NOE

https://tinyurl.com/yblc5qg8

Editor's Note: My interview with Mark was taped approximately Noon EDT on Friday when U.S. and Canadian equity indices for the week were flat to slightly higher. Subsequently, the Dow Jones Industrial Average dropped over 400 points and the S&P 500 Index fell over 40 points before recovering slightly at the close.

The Bottom Line

Technical action by North American equity markets became mixed late last week. Short term technical indicators for a wide variety of indices and sectors were mixed last week. Medium term technical indicators for U.S. equity indices trended lower and have returned to oversold levels. Seasonal influences on North American equity markets are positive in April. The month of April historically has been the second strongest month in the year, second only to December.

This is the time of year when favourable seasonal influences are triggered by encouraging corporate news released with first quarter reports at annual meetings. Chief executive officers love to give good news to shareholders at annual meetings. Responses to first quarter earnings reports released during the past two weeks by the first 11 S&P 500 companies were encouraging. Look for more of the same this week. First quarter earnings by S&P 500 companies are expected to increase 18.4%. Look for news on dividend increases and share buybacks.

The energy sector continues to show encouraging seasonal strength. Seasonal strength for the sector is from mid-March to mid-June. Natural gas inventories remain well below their five year average setting the stage for a significant recovery into spring. A move above the $2.81 U.S. per MBtu level will attract technical buying on both sides of the border. Western Canada Select (Oil sands oil) prices moved sharply higher last week. S&P/TSX Energy Index broke to a 10 week high last week, adding 2.9%. The Philadelphia Oil Services Index gained 0.6% in a weak U.S. equity market. Preferred strategy is to own energy stocks and related ETFs on both sides of the border with an emphasis on "gassy" stocks.

Prospects beyond the end of April become increasingly murky. Negative political influences on North American equity markets during a U.S. mid-term election year are strongest between May and October. This year, investors will focus on the possibility of a change in control in the House of Representatives and Senate. The Republicans currently have a slim majority in both legislative bodies.

Economic News This Week

Bank of Canada Business Outlook Survey is released at 10:30 AM EDT on Monday

March Canadian Housing Starts to be released at 8:15 AM EDT on Tuesday are expected to dip to 218,000 from 229,700 in March.

March Producer Prices to be released at 8:30 AM EDT on Tuesday are expected to increase 0.1% versus a gain of 0.2% in February. Excluding food and energy, March Producer Prices are expected to increase 0.2% versus a gain of 0.2% in February.

March Consumer Prices to be released at 8:30 AM EDT on Wednesday are expected to be unchanged versus a gain of 0.2% in February. Excluding food and energy, March Consumer Prices are expected to increase 0.2% versus a gain of 0.2% in February.

FOMC Meeting minutes for the March 21st meeting are released at 2:00 PM EDT on Wednesday

Weekly Jobless Claims to be released at 8:30 AM EDT are expected to drop to 230,000 from 242,000 last week.

April Consumer Sentiment Index to be released at 10:00 AM EDT on Friday are expected to slip to 100.8 from 101.4 in March.

Earnings News This Week

Observations

Technical action by individual S&P 500 stocks turned mixed last week. Number of stocks breaking resistance totalled 19 while number of stocks breaking support totalled 34. The Up/Down ratio was unchanged last week at (189/255=) 0.74.

Economic news this week will focus on U.S. inflation (March PPI and CPI)

Earnings news this week will focus on reports by major U.S. banks to be released on Friday

Medium term technical indicators in the U.S. (Percent of stocks trading above their 50 day moving average, Bullish Percent Index) dropped last week and became more intermediate Oversold, but have yet to show signs of bottoming.

Medium term technical indicators in Canada were virtually unchanged last week

Short term technical indicators for U.S. and Canadian equity markets, commodities and most sectors (20 day moving averages, short term momentum) were mixed last week

Normal seasonal influences were mixed last week. North American equity indices moved slightly lower last week, but remained above lows set last Monday and above their 200 day moving averages. Seasonal influences on a wide variety of U.S. and Canadian equity indices and economic sensitive sectors tend to show strength starting near the beginning of March and continuing to early May. See charts below:

The outlook for S&P 500 earnings and sales remains positive: According to FactSet, estimates for 2018 were slightly lower last week. First quarter 2018 earnings are expected to increase 17.2% (down from 17.3% last week) on a 7.3% increase in sales. Responses to the four reports released last week were encouraging. Seven more companies are scheduled to report this week, mainly Financials. Second quarter 2018 earnings are expected to increase 19.1% on a 7.7% increase in sales. Third quarter earnings are expected to increase 20.9% on a 6.4% increase in sales. Fourth quarter 2018 earnings are expected to increase 17.0% on a 5.6% increase in revenues. For all of 2018, earnings are expected to increase 18.4% (down from 18.5%) on a 6.7% increase in sales.

Short term political uncertainties remain, including North Korea threats, NAFTA negotiations, rising trade war fears (particularly against China) and increased scrutiny by special council on Russia's influence on the Presidential election.

Earnings and revenue prospects for 2018 are exceptional for U.S. based companies with international exposure. Consensus for S&P 500 earnings on a year-over-year are expected to increase 18.4% in 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 are translated into U.S. Dollars. For example, a U.S. based company with 50% of its earnings and revenues coming from international operations will see earnings and revenues increase by 7.0% from foreign currency translation alone following the current 14.0% fall in the U.S. Dollar Index from its high at 103.82 in January 2017. The U.S. Dollar Index averaged 100 in the fourth quarter of 2016 and 101 in the first quarter of 2017.

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for April 6th 2018

Green: Increase from previous day

Red: Decrease from previous day

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 dropped 37.06 points (1.40%) last week with more than the entire drop occurring on Friday. Intermediate trend remains down. The Index remained below its 20 day moving average and bounced from near its 200 day moving average on Friday. Short term momentum indicators are trending up.

Percent of S&P 500 stocks trading above their 50 day moving average dropped last week to 26.60 from 31.60 with more than the entire drop occurring on Friday. Percent has returned to intermediate overbought after briefly moving to a neutral level.

Percent of S&P 500 stocks trading above their 200 day moving average dropped last week to 52.60 from 58.40. Percent remains intermediate neutral and trending down.

Bullish Percent Index for S&P 500 stocks slipped last week to 41.00 from 41.20 and remained below its 20 day moving average. The Index remains intermediate neutral and trending down.

Bullish Percent Index for TSX stocks was unchanged last week at 55.60 and remained below its 20 day moving average. The Index remains intermediate neutral and trending down.

TSX Composite Index dropped 159.88 points (1.04%) last week. Intermediate trend remains neutral (Score: 0). Strength relative to the S&P 500 Index remains Neutral (Score: 0). The Index remains below its 20 day moving average (Score: -1). Short term momentum indicators are trending up (Score: 1). Technical score slipped last week to 0 from 2

Percent of TSX stocks trading above their 50 day moving average increased last week to 42.56 from 41.39. Percent remains intermediate neutral and trending higher.

Percent of TSX stocks trading above their 200 day moving average slipped last week to 41.74 from 44.67. Percent remains intermediate neutral.

Dow Jones Industrial Average dropped 210.42 points (0.87%) last week with the entire drop occurring on Friday. Intermediate trend changed to down from neutral on a move below 23,400. Strength relative to the S&P 500 Index remains Positive. The Average dropped below its 20 day moving average on Friday, but bounced earlier in the week from near its 200 day moving average. Short term momentum indicators are trending up. Technical score dropped last week to 0 from 2.

Bullish Percent Index for Dow Jones Industrial stocks increased last week to 46.67 from 36.67 and remained below its 20 day moving average. The Index recovered to an intermediate neutral level from an intermediate oversold level.

Bullish Percent Index for NASDAQ Composite stocks slipped last week to 52.53 from 54.32 and remained below its 20 day moving average. The Index remains intermediate neutral and trending down.

NASDAQ Composite Index dropped 148.33 points (2.10%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Negative. The Index remains below its 20 day moving average. Short term momentum indicators have turned up. Technical score increased last week to 0 from -2.

Russell 2000 Index dropped 16.13 points (1.05%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Positive. The Index remains below its 20 day moving average and bounced nicely from near its 200 day moving average earlier in the week. Short term momentum indicators are trending up. Technical score increased last week to 0 from -2.

Dow Jones Transportation Average dropped 250.129 points (2.41%) with the entire amount dropping on Friday. Intermediate trend remains Neutral. Strength relative to the S&P 500 Index changed on Friday to Neutral from Positive. The Average remained below its 20 day moving average and tested its 200 day moving average once again. Short term momentum indicators are trending up. Technical score dropped last week to 0 from 2.

Australia All Ordinaries Composite Index added 18.00 points (0.31%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remained Neutral. The Index remains below its 20 day moving average. Short term momentum indicators turned higher. Technical score increased last week to -2 from -4.

Nikkei Average added 408.44 points (0.19%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index changed last week to Positive from Neutral. The Average moved above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 2 from -2.

Europe iShares added $0.05 (0.11%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Positive. Units moved above their 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 0 from -2.

Shanghai Composite Index dropped 29.42 points (0.93%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Neutral. The Index remains below its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at -4.

Emerging Markets iShares dropped $1.21 (2.51%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Neutral from Positive. Units remain below their 20 day moving average. Short term momentum indicators are trending up. Technical score dropped last week to 2 from 4.

Currencies

U.S. Dollar slipped 0.03 (0.03%) last week. Intermediate trend remains neutral. The Index remains above its 20 day moving average. Short term momentum indicators are trending up.

The Euro eased 0.18 (0.15%) last week. Intermediate trend remains neutral. The Euro remains below its 20 day moving average. Short term momentum indicators are trending down.

Canadian Dollar gained U.S. 0.71 to 0.91%) last week. Intermediate trend remains down. The Canuck Buck remains above its 20 day moving average. Short term momentum indicators are trending up.

Japanese Yen dropped 0.41 (0.44%) last week. Intermediate trend remains up. The Yen remains below its 20 day moving average. Short term momentum indicators are trending down.

British Pound added 0.61 (0.43%) last week. Intermediate trend remains up. The Pound remains above its 20 day moving average. Short term momentum indicators are trending down.

Commodities and Related ETFs

Daily Seasonal/Technical Commodities Trends for April 6th 2018

Green: Increase from previous day

Red: Decrease from previous day

* Excludes adjustment from rollover of futures contracts

The CRB Index dropped 3.11 points (1.59%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. The Index dropped back below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to 2 from 6.

Gasoline dropped $0.07 per gallon (3.47%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. Gas dropped below its 20 day moving average on Friday. Short term momentum indicators are trending down. Technical score dropped last week to 2 from 6.

Crude Oil dropped $2.88 per barrel (4.43%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. Crude dropped below its 20 day moving average on Friday. Short term momentum indicators are trending down. Technical score dropped last week to 2 from 4.

Natural Gas eased $0.03 per MBtu (1.10%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Positive. "Natty" closed on Friday at its 20 day moving average. Short term momentum indicators are trending up. Technical score slipped last week to 1 from 2.

S&P Energy Index slipped $0.49 points (0.10%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Positive. The Index remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 2.

Philadelphia Oil Services Index added $0.74 (0.55%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. The Index dropped back below its 20 day moving average on Friday. Short term momentum indicators have turned up. Technical score increased last week to 4 from 2.

Gold gained $8.80 per ounce (0.66%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Positive. Gold moved back above its 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score increased last week to 2 from 0.

Silver added $0.09 per ounce (0.66%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Positive. Silver remains below its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 0.

AMEX Gold Bug Index gained $0.09 (0.55%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Positive. The Index remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

Platinum dropped $15.10 per ounce (1.62%) last week. Trend remains down. Relative strength changed to Negative from Neutral. Trades below its 20 day MA. Momentum: down.

Palladium dropped $48.65 per ounce (5.15%) last week. Trend remains down. Relative strength changed from Neutral to Negative. Trades below its 20 day MA. Momentum: down.

Copper gained 3.3 cents per lb (1.09%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index changed to Positive from Neutral. Copper remains below its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 2 from -2.

BMO Base Metals ETF slipped $0.02 (0.18%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Negative. Units remain below their 20 day moving average. Short term momentum indicators have turned up. Technical score increased last week to -4 from -6.

Lumber gained $20.50 (3.98%) last week to an all-time high. Trend remains up. Relative strength remains Positive. Trades above its 20 day MA. Momentum: up.

Grain ETN added $0.37 (1.38%) last week. Trend remains up. Relative strength turned Positive from Neutral. Moved above its 20 day moving average. Momentum remains up.

Agriculture ETF dropped $1.22 (1.98%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained Positive. Units remained below their 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 4.

Interest Rates

Yield on 10 year Treasuries increase 3.4 basis points (1.24%) last week. Intermediate trend remains down. Yield remains below its 20 day moving average. Short term momentum indicators are trending up.

Price of the long term Treasuries ETF slipped $0.80 (0.66%) last week. Intermediate trend remains up. Units remain above their 20 day moving average.

Volatility

The VIX Index increased 1.50 (7.51%) last week. The Index remains above its 20 day moving average.

Sectors

Daily Seasonal/Technical Sector Trends for April 6th 2018

Green: Increase from previous day

Red: Decrease from previous day

StockTwits Released on Friday

Technical action by S&P 500 stocks to 10:00: Quiet. Intermediate breakouts: $DG $SO. No breakdowns.

Editor's Note: After 10:00 AM EDT, no additional intermediate breakouts. Breakdowns: JBHT, CXO, DOV, AME and APH.

REIT iShares $IYR moved above $75.96 extending an intermediate uptrend.

Despite risk-off shift, treasury bond prices continue to hold below neckline of H&S topping pattern. equityclock.com/2018/04/06/… $IEF $TLT

Key bogey to watch is previous short-term trendline resistance, which was broken in recent days. $SPX $SPY $ES_F

Average hourly earnings actually fell by 0.1% (NSA) last month, diverging from average gain of same margin. #NFP #Economy $MACRO

US Payrolls higher by 0.5% (NSA) in March, marginally below 0.6% average increase for month. Pace remains 0.3% above avg YTD. #NFP $MACRO

Canada Employment up 43,800, or 0.2% (NSA), in March, inline with average change. Still running below average on year. #CDNecon #CAD $MACRO

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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