Tech Talk for Monday April 22nd 2019

U.S. equity index futures were lower this morning. S&P 500 futures were down 9 points in pre-opening trade.

Crude oil gained $1.70 to $65.70 after the United States halted waivers to countries that are importing oil from Iran. Energy stocks are expected to open higher.

Halliburton added $0.87 to $32.00 after reporting higher than consensus first quarter sales and earnings.

Kimberly Clark (KMB $123.55) gained $4.82 to $128.37 after reporting higher than first quarter sales and earnings.

Boeing dropped $5.00 to $375.07 after safety concerns were raised about its 787 aircraft.

EquityClock's Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/04/18/stock-market-outlook-for-april-22-2019/

Note seasonality charts on the U.S. Industrial sector, U.S. Retail Sales, Canadian Retail Sales and the Philly Fed Index.

The Bottom Line

U.S. equity markets were mixed again last week despite better than consensus first quarter results released to date by S&P 500 and Dow Jones Industrial companies. Strength in the U.S. Dollar Index dampened enthusiasm for U.S. equities. Canadian equities performed slightly better with the TSX Composite Index briefly touching an all-time high on Thursday.

Observations

Technical action by individual S&P 500 stocks moved slightly lower last week. Number of stocks breaking intermediate resistance totalled 37 while number of stocks breaking support totalled 42. Most of the breakdowns were in the Health Care sector. The Up/Down ratio dropped to (314/102=) 3.08 from 3.15.

Medium term technical indicators for U.S. equity markets (e.g. Percent of stocks trading above their 50 day moving average, Bullish Percent Index) moved lower last week, but remain overbought. See charts near the end of this report

Medium term technical indicators in Canada were mixed last week, but remain intermediate overbought. See charts near the end of this report.

Short term technical indicators for U.S. markets and sectors (20 day moving averages, short term momentum) remained elevated last week.

Short term technical indicators for Canadian markets and sectors also moved higher again last week.

Short term political concerns in the U.S. remain elevated. Issues include tariff wars between the U.S. and China and anti-Trump hearings initiated by the Democrat controlled House of Representatives. Release of the Mueller report elevated political rhetoric.

Frequency of quarterly earnings reports accelerates this week. Another 150 S&P 500 companies (including 12 Dow Jones Industrial companies) are scheduled to report. To date, 15% of S&P 500 companies have reported quarterly results.

Prospects for S&P 500 earnings in the first quarter improved last week thanks.to higher than consensus results released to date. However, estimates beyond the first quarter were unchanged/slightly lower. According to FactSet, first quarter earnings are expected to decline 3.9% on a year-over-year basis (versus a decline of 4.3% last week) but revenues are expected to increase 5.0%. Second quarter earnings are expected to slip 0.5% (versus 0.4% last week) and second quarter revenues are expected to increase 4.4%. Third quarter earnings are expected to increase 1.3% (down from 1.4%) and revenues are expected to increase 4.4%. Fourth quarter earnings are expected to increase 8.2% (versus 8.3% last week) and fourth quarter revenues are expected to increase 4.7%. For all of 2019, earnings are expected to increase 3.4% and revenues are expected to increase 4.7%.

Seasonal influences in the first and second quarters of a U.S. Pre-Presidential Election Year are favourable. Gains this year already have exceeded average gains in the first and second quarters.

The U.S. Dollar Index ETN broke to a 28 month high on Thursday on a move above $26.07. Despite the gain, the CRB Index rose slightly and maintained an intermediate uptrend. The exception among commodities was gold and gold stocks. They extended an intermediate downtrend.

Economic News

March Existing Homes to be released at 10:00 AM EDT on Monday are expected to slip to 5.31 million units from 5.51 million units in February.

March New Home Sales to be released at 10:00 AM EDT on Tuesday are expected to slip to 650,000 units from 667,000 units in February.

Bank of Canada Statement on Interest Rates to be released at 10:00 AM EDT on Wednesday is expected to record no change for the interbank rate at 1.75%. Press conference is held at 11:15 AM EDT

Weekly Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to increase to 200,000 from 192,000 last week.

March Durable Goods Orders to be released at 8:30 AM EDT on Thursday are expected to increase 0.7% versus a decline of 1.6% in February. Excluding Transportation Orders, March Durable Goods Orders are expected to increase 0.2% versus a decline of 0.1% in February.

First estimate of U.S. First Quarter GDP to be released at 8:30 AM EDT on Friday is expected to show annualized growth at 1.8% versus growth at 2.2% in the fourth quarter.

April Michigan Sentiment Index to be released at 10:00 AM EDT on Friday is expected to increase to 97.0 from 96.9 in March.

Selected Earnings News This Week

Trader's Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for April 18th 2019

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for April 18th 2019

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for April 18th 2019

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

StockTwits released on Thursday @EquityClock

Technical action by S&P 500 stocks to 10:00: Mixed. Intermediate breakouts: $ETFC $TRV $DE $SNA. Breakdowns: $OXY $VAR $AA

Rogers Communications $RCI $RCI.B.CA, a TSX 60 stock moved below $50.85 U.S. and $67.90 Cdn. completing a double top pattern

Forest product stocks under pressure. Cascade $CAS.CA moved below $7.97 extending an intermediate downtrend. $IP

TSX Composite Index $TSX.CA moved above $16,586.46 to an all-time high extending an intermediate uptrend.

American Express $AXP, a Dow Jones Industrial stock moved above $113.85 to an all-time high extending an intermediate uptrend.

And just like that, injection season begins! $UNG $NG_F #NATGAS

Josef Schachter on BNN's Market Call

Market comment

https://www.bnnbloomberg.ca/market-call/josef-schachter-s-market-outlook~1663632

Past Picks

https://www.bnnbloomberg.ca/market-call/josef-schachter-s-past-picks~1663698

Top Picks

https://www.bnnbloomberg.ca/market-call/josef-schachter-s-top-picks~1663739

S&P 500 Momentum Barometers

Percent of S&P 500 stocks trading above their 50 day moving average dropped last week to 70.80 from 83.97. Percent remains intermediate overbought and has rolled over.

Bullish Percent Index for S&P 500 stocks dropped last week to 75.80 from 79.40. The Index remains intermediate overbought and shows early signs of rolling over.

TSX Momentum Barometers

Percent of TSX stocks trading above their 50 day moving average dropped last week to 65.56 from 68.31. Percent remains intermediate overbought and is trending down.

Bullish Percent Index increased last week to 60.49 from 58.85. The Index advanced to an intermediate overbought level.

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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