Tech Talk for Monday March 19th 2018

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

Facebook dropped $6.49 to $178.60 on concerns about access to shared user data.

Dana (DAN $26.41) is expected to open higher after the company raised its revenue guidance.

Dr. Pepper Snapple (DPS $117.60) is expected to open higher after RBC Capital upgraded the stock to Outperform from Sector Perform.

Jon Vialoux's EquityClock Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/03/16/stock-market-outlook-for-march-19-2018/

Note seasonality charts on U.S. Housing Starts, Industrial Production and Job Openings

WALL STREET RAW RADIO, SATURDAY, MARCH 17, 2018

WITH HOST, MARK LEIBOVIT.

GUESTS INCLUDE: DON VIALOUX, HENRY WEINGARTEN, HARRY BOXER, SINCLAIR NOE AND JEROME DEWALD

https://tinyurl.com/yd6zkyzb

The Bottom Line

World equity markets and economic sensitive sectors continued their second strongest period of seasonal strength in the year from the beginning of March to the first week in May. (Strongest period is from mid-October to the first week in January). The March to May period is bolstered by encouraging comments offered by CEOs at annual meeting (frequently coinciding with release of first quarter reports) combined by seasonally strong economic news related to the spring buying season (e.g. autos, homes spring clothing). This year the March to May season will be helped by strong gains in corporate sales and earnings triggered by changes in U.S. tax laws.

Now is the time to watch closely for sectors and markets that show positive strength relative to the S&P 500 Index. They are top candidates for purchase for the March-May seasonal trade. Selected commodity sensitive sectors already have surfaced on the radar screen. 'Tis the season" for commodity and commodity equity prices to move higher to at least early May. Note the strong gain in commodity and related equity prices on Friday, particularly in the energy sector.

Economic News This Week

FOMC Meeting results are to be released at 2:00 PM EST. Consensus is that the Fed Fund Rate will increase by 0.25%. Press conference with Federal Reserve Chairman Powell is scheduled at 2:30 PM EST.

February Existing Home Sales to be released at 10:00 AM EST on Wednesday are expected to increase to 5.40 million units from 5.38 million units in January.

Weekly Jobless Claims to be released at 8:30 AM EST on Thursday

February Leading Economic Indicators to be released at 10:00 AM EST on Thursday

February Durable Goods Orders to be released at 8:30 AM EST on Friday are expected to increase 1.6% versus a drop of 3.7% in January. Excluding Transportation Orders, February Durable Goods Orders are expected to increase 0.5% versus a decline of 0.3% in January.

Canadian February Consumer Price Index to be released at 8:30 AM EST on Friday is expected to increase 0.5% versus a gain of 0.7% in January.

Canadian January Retail Sales to be released at 8:30 AM EST on Friday are expected increase 1.3% versus a drop of 0.8% in December

February New Home Sales to be released at 10:00 AM EST on Friday are expected to increase to 620,000 units from 593,000 units in January.

Earnings News This Week

Observations

Technical action by individual S&P 500 stocks remained bullish last week. Number of stocks breaking resistance totalled 40 while number of stocks breaking support totalled 4. The Up/Down ratio increased last week to (238/184=) 1.29 from 1.09

U.S. economic news this week will focus on the Federal Reserve announcement on monetary policy on Wednesday.

Canadian economic news this week will focus on CPI and Retail Sales released on Friday

Medium term technical indicators in the U.S. (Percent of stocks trading above their 50 day moving average, Bullish Percent Index) remained last week at Neutral levels.

Medium term technical indicators in Canada moved higher to neutral from oversold levels.

Short term technical indicators for U.S. and Canadian equity markets, commodities and most sectors (20 day moving averages, short term momentum) generally moved higher last week, notably in the energy sector.

Seasonal influences are working well this spring. 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 virtually unchanged again last week. First quarter 2018 earnings are expected to increase 17.0% on a 7.2% increase in sales. Second quarter 2018 earnings are expected to increase 19.0% on a 7.5% increase in sales. Third quarter earnings are expected to increase 20.8% on a 6.2% increase in sales. Fourth quarter 2018 earnings are expected to increase 16.7% on a 5.4% increase in revenues. For all of 2018, earnings are expected to increase 18.4% on a 6.6% increase in sales.

Short term political uncertainties remain, including struggling NAFTA negotiations, rising trade war fears following proposed tariffs on aluminum and steel 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 6.8% from foreign currency translation alone following the current 13.5% 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 March 16th 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.

The S&P 500 Index dropped 34.56 points (1.24%) last week. Intermediate trend remains down The Index remains above its 20 day moving average. Short term momentum indicators have turned down.

Percent of S&P 500 stocks trading above their 50 day moving average slipped last week to 51.20 from 56.00. Percent remains intermediate neutral.

Percent of S&P 500 stocks trading above their 200 day moving average slipped last week to 68.20 from 70.20. Percent remains intermediate overbought.

Bullish Percent Index for S&P 500 stocks increased last week to 61.60 from 59.40 and remained above its 20 day moving average. The Index remains intermediate overbought.

Bullish Percent Index for TSX stocks increase last week to 58.80 from 58.40 and moved above its 20 day moving average. The Index remains intermediate neutral.

TSX Composite Index added 133.52 points (0.86%) last week. Intermediate trend changed on Friday to up from down on a move above 15,766.52 (Score: 2).

Strength relative to the S&P 500 Index changed from Negative to Neutral (Score: 0). The Index remains above its 20 day moving average (Score:1). Short term momentum indicators are trending up (Score: 1). Technical score increased last week to 4 from -2.

Percent of TSX stocks trading above their 50 day moving average increased last week to 41.39 from 36.73. Percent changed to intermediate neutral from intermediate oversold and continue to move higher.

Percent of TSX stocks trading above their 200 day moving average increased last week to 47.13 from 45.71. Percent continues to move higher.

Dow Jones Industrial Average dropped 389.23 points (1.54%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index remained Negative. The Average dropped below its 20 day moving average. Short term momentum indicators remained up. Technical score dropped last week to -2 from 0

Bullish Percent Index for Dow Jones Industrial stocks increased last week to 63.33 from 56.67 and moved above its 20 day moving average. The Index returned to intermediate overbought from intermediate neutral.

Bullish Percent Index for NASDAQ Composite stocks increased last week to 62.83 from 61.09 and remained above its 20 day moving average. The Index remains intermediate overbought.

The NASDAQ Composite Index dropped 78.82 points (1.04%) 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 have turned down. Technical score slipped last week to 4 from 6.

Russell 2000 Index dropped 10.99 points (0.69%) 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 have turned down. Technical score slipped last week to 0 from 2.

Dow Jones Transportation Average dropped 56.09 points (0.52%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index changed to Positive from Neutral. The Average remains above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 4 from 2.

Australia All Ordinaries Composite Index dropped 14.20 points (0.23%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index remains Negative. The Index dropped below its 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -4 from -2.

Nikkei Average added 207.31 points (0.97%) last week. Intermediate trend remained neutral. Strength relative to the S&P 500 Index remains Negative. The Average dropped back below its 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score increased last week to -2 from -4.

Europe iShares slipped $0.12 (0.25%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Negative. Units moved back above their 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score remained last week at -2.

Shanghai Composite Index dropped 37.29 points (1.14%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Negative. The Index remains above its 20 day moving average. Short term momentum indicators have turned down. Technical score slipped last week to -4 from -2.

Emerging Markets iShares dropped $0.54 (1.09%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Neutral. Units remain above their 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 4.

Currencies

The U.S. Dollar Index slipped 0.265 (0.30%) last week. Intermediate trend remains neutral. The Index moved below its 20 day moving average. Short term momentum indicators are trending down.

The Euro slipped 0.20 (0.16%) last week. Intermediate trend remains down. The Euro dropped below its 20 day moving average. Short term momentum indicators are trending down.

Canadian Dollar plunged U.S. 1.68 cents (2.15%) last week. Intermediate trend remains down. The Canuck Buck remains below its 20 day moving average. Short term momentum indicators are trending down.

Japanese Yen gained 0.70 (0.75%) last week. Intermediate trend remains up. The Yen remains above its 20 day moving average. Short term momentum indicators are trending up.

British Pound added 0.94 (0.68%) last week. The Pound moved back above its 20 day moving average. Short term momentum indicators are trending up.

Commodities and Related ETFs

Daily Seasonal/Technical Commodities Trends for March 16th 2018

Green: Increase from previous day

Red: Decrease from previous day

* Excludes adjustment from rollover of futures contracts

CRB Index slipped 0.66 (0.34%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Neutral. The Index dropped below its 20 day moving average. Short term momentum indicators are trending down. Technical score slipped last week to 0 from 2.

Gasoline added $0.05 per gallon (2.63%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index is Neutral. Gas moved back above its 20 day moving average. Short term momentum indicators are trending up. Technical score increased last week to 4 from 1.

Crude Oil added $0.37 per barrel (0.60%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index returned to Neutral on Friday. Crude moved above its 20 day moving average on Friday. Short term momentum indicators turned higher on Friday. Technical score increased last week to 4 from 0.

Natural Gas dropped $0.04 per MBtu (1.47%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index changed last week to Neutral from Positive. "Natty" dropped below its 20 day moving average. Short term momentum indicators turned down. Technical score dropped last week to -4 from 2.

S&P Energy Index dropped 4.25 points (0.85%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Negative. The Index moved back above its 20 day moving average on Friday. Short term momentum indicators are trending up. Technical score remained last week at -2.

Oil Services Index dropped 1.57 points (1.13%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains Negative. The Index moved back above its 20 day moving average on Friday. Short term momentum indicators have turned back up. Technical score remained last week at 2.

Gold dropped $11.70 per ounce (0.88%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Negative. Gold remains below its 20 day moving average. Short term momentum indicators have turned down. Technical score slipped last week to -6 from -4

Silver dropped $0.24 (1.45%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Negative from Neutral. Silver remains below its 20 day moving average. Short term momentum indicators turned down. Technical score dropped last week to -2 from 2.

AMEX Gold Bug Index dropped 1.76 points (1.02%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remains Negative. The Index remains below its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at -4.

Platinum dropped $14.00 per ounce (1.45%) last week. Trend remains down. Relative strength remains Negative. PLAT remains below its 20 day MA. Momentum: Down.

Palladium added $1.70 (0.17%) last week. Trend remains neutral. Relative strength remains Negative. PALL remains below its 20 day MA. Momentum turned up.

Copper slipped $0.03 per lb (0.96%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index remained Negative. Copper remained below its 20 day moving average. Short term momentum indicators have turned up. Technical score increased last week to -2 from -4.

BMO Base Metals ETF added $0.14 (1.14%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Neutral from Negative. Units moved above their 20 day moving average. Short term momentum indicators turned up. Technical score increased last week to 4 from -1.

Lumber added $5.70 (1.18%) last week. Trend remains up. Relative strength remains Negative. Lumber remains below its 20 day MA. Momentum turned up.

Grain ETN dropped $0.46 (1.70%) last week. Trend remains up. Relative strength changed to Neutral from Positive. Grain dropped below its 20 day MA. Momentum turned down.

Agriculture ETF dropped $1.64 (2.55%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to Negative from Neutral. Units dropped below their 20 day moving average. Short term momentum indicators turned down. Technical score dropped last week to -2 from 4.

Interest Rates

Yield on 10 year Treasuries dropped 4.6 basis points (1.59%) last week. Intermediate trend remains up. Yield dropped below its 20 day moving average. Short term momentum indicators are trending down.

Price of the long term Treasury ETF gained $1.90 (1.61%) last week. Short term trend has turned up. Units moved above their 20 day moving average. Short term momentum indicators have turned up.

Volatility

VIX Index gained 1.11 (7.58%) last week.

Sectors

Daily Seasonal/Technical Sector Trends for March 16th 2018

Green: Increase from previous day

Red: Decrease from previous day

StockTwits Released on Friday @EquityClock

Norbord $OSB.CA moved above $47.91 extending an intermediate uptrend.

Technical action by S&P 500 stocks to 10:00: Quiet. No breakouts. Breakdown: $TIF

Editor's Note: After 10:00 AM EST, one breakout: DRE. No breakdowns.

Josef Schachter on BNN's Market Call on Friday

https://www.bnn.ca/video/josef-schachter-s-top-picks~1349735 Top Picks

https://www.bnn.ca/video/josef-schachter-s-top-picks~1349735 Past Picks

https://www.bnn.ca/video/josef-schachter-s-market-outlook~1349648 Market Outlook

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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