Tech Talk for Friday July 26th 2019

U.S. equity index futures moved higher this morning. S&P 500 futures were up 5 points in pre-opening trade.

Index futures were virtually unchanged following release of U.S. second quarter real GDP at 8:30 AM EDT. Consensus is growth at a 2.0% rate versus growth at a 3.1% rate in the first quarter. Actual was growth at a 2.1% rate,

Amazon dropped $21.32 to $1953.50 after reporting lower than consensus second quarter earnings.

Alphabet advanced $98.13 to $1234.07 after reporting higher than consensus second quarter earnings. The company also announced a $25 billion share repurchase program.

Starbucks gained $5.79 to 96.70 after reporting higher than consensus second quarter revenues and earnings. The company also raised guidance.

Intel added $2.34 to $54.50 after reporting higher than consensus second quarter earnings.

EquityClock's Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/07/25/stock-market-outlook-for-july-26-2019/

Note seasonality chart on Durable Goods Orders.

S&P 500 quarterly reports to date

After 185 reports released to date, earnings on a year-over-year basis have dropped 3.49%, a loss that is significantly greater than expected. Following is a link to a Market Watch article giving more information

https://www.marketwatch.com/story/sp-500-earnings-outlook-gets-more-negative-after-over-one-third-of-the-companies-report-2019-07-25?mod=mw_latestnews

Don Vialoux on Wolf on Bay Street

Listen to the radio broadcast on Radio 640 between 7:00 and 8:00 AM EDT tomorrow (Saturday)

Notes developed for the interview

Most equity markets for developed nations enter into a corrective period from mid-July to mid-October. The weakest one month period in the year historically is from mid-September to mid-October

The corrective period from mid-July to mid-October corresponds to a period of increased volatility (i.e.VIX)

Increased volatility is related to lower volume in equity markets during the summer holidays plus a penchant by analysts to lower revenue and earnings estimates prior to release of third quarter results.

On average, the correction sees North American equity indices moving 1%-3% lower during the mid-July to mid-October period.

What about this year?

U.S. and Canadian equity indices reached a short term peak on or about July 15th

VIX Index recently bottomed near 12%.

Responses to quarterly results by U.S. and Canadian companies are expected to be muted. Earnings by S&P 500 companies have entered into an earnings recession: Earnings on a year-over-year basis declined slightly in the first quarter, are estimated down 2.0% in the first quarter and are estimated down 1.5% in the third quarter.

Earnings by U.S. companies with international operations are particularly vulnerable due to currency translation on a year-over-year basis with the U.S. Dollar Index moving from 91.0 to 97.0.

Volatility in equity markets is expected to be greater than average this year mainly due to evolving U.S. political events: China/U.S. trade negotiations, impeachment discussions, anti-trust investigations of major technology companies and Middle East sabre rattling. In Canada, a federal election of a minority government could prompt greater volatility.

Strategy: Short term investors can take short term profits on strength on most trading positions. The exception is the precious metal sector, a sector with a history of moving higher from mid-July to mid-October. Longer term investors can relax and enjoy the holiday period despite greater volatility.

StockTwits released yesterday @EquityClock

Allergan $ALGN, a NASDAQ 100 stock moved below $263.70 on news of a withdrawal of one of its breast augmentation devices. setting an intermediate downtrend.

Global X Uranium ETF $URA moved below $11.15 extending an intermediate downtrend.

Suncor $SU.CA, a TSX 60 stock moved below $40.03 extending an intermediate downtrend.

Enbridge $ENB.CA, a TSX 60 stock moved below $45.35 extending an intermediate downtrend.

Brookfield Asset Management $BAM.A.CA $BAM, a TSX 60 stock moved above $64.84 Cdn. to an all-time high extending an intermediate uptrend.

Trader's Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for July 25th 2019

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for July 25th 2019

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for July 25th 2019

Green: Increase from previous day

Red: Decrease from previous day

S&P 500 Momentum Barometer

The Barometer dropped 5.20 to 75.20 yesterday. It remains intermediate overbought and rolling over.

TSX Momentum Barometer

The Barometer dropped 5.44 to 61.37 yesterday. It remains intermediate overbought and showing signs of rolling over.

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

Sponsored By...