Tech Talk for Monday December 23rd 2019

U.S. equity index futures were higher this morning. S&P 500 futures were up 6 points in pre-opening trade.

Index futures were virtually unchanged following release of November Durable Goods Orders at 8:30 AM EST. Consensus was an increase of 1.5% versus a gain of 0.5% in October. Actual was. Excluding Transportation Orders, consensus for November Durable Goods Orders was an increase of 0.2% versus a gain of 0.5% in October. Actual was..

The Canadian Dollar was virtually unchanged following release of Canada's October GDP report at 8:30 AM EST. Consensus was an increase of 0.1% versus a gain of 0.1% in September. Actual was a decline of 0.1%.

Cincinnati Bell added $2.28 to $10.00 after the company agreed to be acquired by Brookfield Infrastructure in a deal valued at $2.6 billion.

Apple added $0.87 to $280.31 after Wedbush raised its target price from $325 to $350..

Skechers was unchanged at $44.21 after Moness raised its target price to $350 from $325.

EquityClock's Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/12/20/stock-market-outlook-for-december-23-2019/

Note seasonality charts on the U.S. Dollar Index and Canadian Retail Trade.

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.

U.S and Canadian equity markets close at 1:00 PM on Tuesday. Both are closed on Wednesday Canadian equity markets are closed on Thursday.

Medium term technical indicators for U.S. equity markets (e.g. Percent of stocks trading above their 50 day moving average, Bullish Percent Index) continued moving higher last week and are overbought, but have yet to show signs of peaking.

Medium term technical indicators for Canadian equity markets also moved higher last week and are overbought, but have yet to show signs of peaking.

Most short term technical indicators for U.S. markets and sectors (20 day moving averages, short term momentum indicators) also moved higher last week and are overbought, but have yet to show signs of peaking.

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

Consensus for earnings by S&P 500 companies moved slightly lower last week. According to FactSet, fourth quarter earnings are expected to decrease 1.4% (versus previous estimate of a drop of 1.3%) and fourth quarter revenues are expected to increase 2.6%. For all of 2019, earnings are expected to increase 0.3% and revenues are expected to increase 3.8%. First quarter 2020 earnings are expected to increase 5.0% (versus 5.4% last week) and revenues are expected to increase 4.4 %. Second quarter 2020 earnings are expected to increase 6.6% (versus 6.9%) and revenues are expected to increase 4.9%. Earnings for all of 2020 are expected to increase 9.6% (versus 9.7%) and revenues are expected to increase 5.5%.

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

The end of tax loss selling pressures on Friday in Canada and the U.S.

Release of more bullish investment dealer predictions for next year.

Start of investing of yearend bonuses by individual investors

A decline of 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 Durable Goods Orders to be reported at 8:30 AM EST on Monday are expected to increase 1.4% versus a gain of 0.5% in October. Excluding Transportation Orders, November Durable Goods Orders are expected to increase 0.2% versus a gain of 0.5% in October.

November New Home Sales to be released at 8:30 AM EST on Monday are expected to increase 0.3% versus a drop of 0.7% in October.

October Canadian GDP to be released at 8:30 AM EST on Monday is expected to increase 0.1% versus a gain of 0.1% in September.

Weekly Initial Jobless Claims to be released at 8:30 AM EST on Thursday are expected to drop to 220,000 from 234,000 last week.

Earnings News This Week

No S&P 500 or TSX Composite companies are scheduled to report this week.

Trader's Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for December 20th 2019

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for December 20th 2019

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for December 20th 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

Hap Sneddon on BNNBloomberg's Market Call

Hap is the guest analyst at Noon today.

Greg Schnell's Market Buzz

Released on Friday. Following is a link:

https://www.youtube.com/watch?v=IWg5W5wt9WM&feature=youtu.be

Greg talks about sell signals in the Transportation industry.

StockTwits released on Friday @EquityClock

Manulife Financial $MFC.CA moved above $26.26 to a 10 year high extending an intermediate uptrend.

Abbvie $ABBV, an S&P 100 stock moved above $90.41 extending an intermediate uptrend.

Visa $V, a Dow Jones Industrial stock moved above $186.74 to an all-time high extending an intermediate uptrend.

TSX Composite Index moved above 17,120.90 to an all-time high extending an intermediate uptrend. $TSX.CA

Silver ETN $SLV moved above intermediate resistance at $16.08

‘Tis the season for silver to move higher to at least the end of February and frequently to the end of April! $SLV

TransCanada Energy $TRP.CA, a TSX 60 stock moved above $69.49 to an all-time high extending an intermediate uptrend.

Kinder Morgan $KMI, an S&P 100 stock moved above $20.97 extending an intermediate uptrend.

Xilinx $XLNX, a NASDAQ 100 stock moved above $98.48 completing a base building pattern.

Maxim Intergrated Products $MXIM, a NASDAQ 100 stock moved above $61.59 extending an intermediate uptrend.

CGI Group $GIB.A.CA, a TSX 60 stock moved above $111.23 to an all-time high extending an intermediate uptrend.

Open Text $OTEX, a TSX 60 stock moved above $44.11 to an all-time high extending an intermediate uptrend.

S&P 500 Momentum Barometers

Percent of S&P 500 stocks trading above their 50 day moving average increased last week from 73.29 to 80.76. Percent remains intermediate overbought, but has yet to show signs of a peak.

Bullish Percent Index for S&P 500 stocks increased last week from 75.00 to 77.20. The Index remains intermediate overbought, but has yet to show signs of a peak.

TSX Momentum Barometers

Percent of TSX stocks trading above their 50 day moving average increased last week from 65.68 to 67.59. Percent remains intermediate overbought, but has yet to show signs of a peak.

Bullish Percent Index for TSX stocks increased last week from 70.26 to 71.43. The Index remains intermediate overbought, but has yet to show signs of a peak.

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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