Tech Talk for Monday December 16th 2019

U.S. equity index futures were higher this morning. S&P500 futures were up 14 points in pre-opening trade.

Cineplex (CPX $24.01) is expected to open higher after Cineworld offered to acquire the company for $34 per share cash. Value of the offer is $2.1 billion.

International Flavours and Fragrances (IFF $133.98) has agreed to merge with Dupont's nutrition unit in a deal valued at $26.2 billion.

Boeing dropped $13.67 to $328.00 after considering a halt or reduction in production of its 737 Max aircraft.

Amgen gained $3.15 to $239.89 and UnitedHealth Group added $3.49 to $288.97 after they were added to Goldman Sach's "Conviction Buy" list.

EquityClock's Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/12/13/stock-market-outlook-for-december-16-2019/

Note seasonality charts on Retail Trade, Retail Industry, Silver futures and Copper futures.

The Bottom Line

World equity markets continued their intermediate uptrend last week. Strength was recorded despite recent concerns including an earnings recession by major U.S. companies until the first quarter next year, growing efforts by the Democrats to impeach Donald Trump and growing Middle East and Hong Kong tensions. Seasonal influences remain positive for most equity markets until the first week in January

Observations

Seasonal influences this year continue to follow their historic pattern. Seasonal influences on U.S. and Canadian equity markets turned positive in the second half of October. Seasonal influences for equity markets in other developed nations turned positive in early October.

Medium term technical indicators for U.S. equity markets (e.g. Percent of stocks trading above their 50 day moving average, Bullish Percent Index) were virtually unchanged last week, but remain intermediate overbought.

Medium term technical indicators for Canadian equity markets also were virtually unchanged last week, but remain intermediate overbought.

Most short term technical indicators for U.S. markets and sectors (20 day moving averages, short term momentum indicators) moved to overbought levels, but have yet to show signs of a peak.

Short term technical indicators for Canadian markets and sectors also moved to overbought levels, but have yet to show signs of a peak.

Earnings report season has entered into a quiet period prior to the Christmas holiday and the release of fourth quarter results. Only 10 S&P 500 companies are scheduled to release quarterly results this week.

Consensus for revenues and earnings by S&P 500 companies changed slightly last week. According to FactSet, fourth quarter earnings are expected to decrease 1.3% (versus previous estimate of a drop of 1.5%) and fourth quarter revenues are expected to increase 2.5% (versus a previous estimate of 2.6%). For all of 2019, earnings are expected to increase 0.3% (versus 0.2%) and revenues are expected to increase 3.8%. First quarter 2020 earnings are expected to increase 5.4% (versus 5.2%) and revenues are expected to increase 4.4 %. Second quarter 2020 earnings are expected to increase 6.9% (versus 6.7%) and revenues are expected to increase 4.9%. Earnings for all of 2020 are expected to increase 9.7% (versus 9.8%) and revenues are expected to increase 5.5%.

A series of annual events occur during the next three weeks that traditionally are positive for equity markets

The end of tax loss selling pressures

Release of bullish investment dealer predictions for next year.

Start of investing of yearend bonuses by individual investors

A decline in institutional investor influences as major investors go on holidays

A drop in volume that prompts more volatility on the upside

Anticipation of the Christmas (Santa Claus) rally.

Economic News This Week

November New Housing Starts to be released at 8:30 AM EST on Tuesday are expected to increase to 1.344 million units from 1.314 million units in October.

November Capacity Utilization to be released at 9:15 AM EST on Tuesday is expected to increase to 77.2% from 76.7% in October. November Industrial Production is expected to increase 0.8% versus a decline of 0.8% in October.

November Canadian Consumer Price Index to be released at 8:30 AM EST on Wednesday is expected to increase 0.3% versus a gain of 0.3% in October. Excluding food and energy,

November Canadian Consumer Price Index is expected to increase versus a gain of 0.4% in October.

December Philly Fed Index to be released at 8:30 AM EST on Thursday is expected to slip to 8.5 from 10.4 in November.

Weekly Initial Jobless Claims to be released at 8:30 AM EST are expected to drop to 213,000 from 252,000 last week.

November Existing Home Sales to be released at 10:00 AM EST on Thursday are expected to slip to 5.45 million units from 5.46 million units in October.

Third quarter GDP to be released at 8:30 AM EST on Friday is expected to grow at a 2.1% annual rate versus a 2.0 % rate in the second quarter.

Canadian October Retail Sales to be released at 8:30 AM EST on Friday are expected to decline 0.1% versus a decline of 0.1% in September. Excluding auto sales, Canadian October Retail Sales are expected to increase 0.1% versus a gain of 0.2% in September.

December Michigan Consumer Sentiment Survey to be released at 10:00 AM EST on Friday is expected to be unchanged 99.2 reported in November.

November Personal Income to be released at10:00 AM EST on Friday is expected to increase 0.3% versus no change in October. November Personal Spending is expected to increase 0.4% versus a gain of 0.3% in October.

Selected Earnings News This Week

Trader's Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for December 13th 2019

Unit Seasonal Trend Relative 20 Day Momentum Tech Prev

Strength MA Score Score

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for December 13th 2019

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for December 13th 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 Friday @EquityClock

Adobe $ADBE, a NASDAQ 100 stock moved above $313.11 to an all-time high extending an intermediate uptrend.

Lithium ETN $LIT moved above $26.82 extending an intermediate uptrend.

Mastercard $MA, an S&P 100 stock moved above $293.33 to an all-time high extending an intermediate uptrend.

Blackberry $BB.CA, a TSX 60 stock moved above $7.53 completing a base building pattern

Micron $MU, a NASDAQ 100 stock moved above $51.39 extending an intermediate uptrend.

China Large Cap iShares $FXI moved above $43.27 extending an intermediate uptrend

United Technologies $UTX, a Dow Jones Industrial stock moved above $149.81 to an all-time high extending an intermediate uptrend

Mexico iShares $EWW moved above $45.66 extending an intermediate uptrend.

Global Agriculture ETF $COW.CA moved above $43.21 to an all-time high extending an intermediate uptrend.

A breakdown by the U.S. Dollar Index below 96.89 yesterday continued to boost commodity prices today

Greg Schnell's Market Buzz

Released on Friday. Following is a link:

https://www.youtube.com/watch?v=5vnp-fzQzzc&list=PLyNJu-3PikrQo_o4Mxk73xpjF4eaVEd9x&index=2&t=0s

S&P 500 Momentum Barometers

Percent of S&P 500 stocks trading above their 50 day moving average increased last week to73.29 from 72.85. Percent remains intermediate overbought, but has yet to show signs of peaking.

Bullish Percent Index for S&P 500 stocks increased last week to 75.00 from 72.80. The Index remains intermediate overbought, but has yet to show signs of peaking.

TSX Momentum Barometers

Percent of TSX stocks trading above their 50 day moving average slipped last week to 65.58 from 68.84. Percent remains intermediate overbought, but has yet to show signs of peaking.

Bullish Percent Index for TSX stocks slipped last week to 70.26 from 70.82. The Index remains intermediate overbought, but has yet to show signs of peaking.

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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