Tech Talk for Monday December 2nd 2019

U.S. equity index futures were higher this morning. S&P 500 futures were up 2 points in pre-opening trade.

Wells Fargo slipped $0.11 to $54.35 after Raymond James downgraded the stock to Underperform from Market Perform

Apple gained $0.92 to $268.17 after JP Morgan raised its target price to $296 from $290.

Autozone (AZO $1,177.92) is expected to open higher after Wells Fargo and Credit Suisse raised their target price on the stock.

Amgen (AMGN $234.72) is expected to open higher after Oppenheimer raised its target price to $250 from $240.

EquityClock's Daily Market Comment

Following is a link:

http://www.equityclock.com/2019/11/29/stock-market-outlook-for-december-2-2019/

Note seasonality chart on Canada's GDP.

The Bottom Line

World equity markets resumed 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, continuing trade uncertainties between China and the U.S. 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) turned higher last week.

Short term technical indicators for Canadian markets and sectors also turned higher from last week.

Economic News This Week

October Construction Spending to be released at 10:00 AM EST on Monday is expected to increase 0.3% versus a gain of 0.5% in September.

November ISM Manufacturing Index to be released at 10:00 AM EST on Monday is expected to improve to 49.4 from 48.3 in October.

November ADP Employment Report to be released at 8:15 AM EST on Wednesday is expected to increase to 138,000 from 125,000 in October.

November ISM Services Index to be released at 10:00 AM EST on Wednesday is expected to slip to 54.5 from 54.7 in October.

Bank of Canada economic update is released at 10:00 AM EST on Wednesday. Overnight lending rate to major banks is expected to remain unchanged at 1.75%.

OPEC meeting on Thursday is expected to maintain current production quotas by membership states.

October U.S. Trade Deficit to be released at 8:30 AM EST on Thursday is expected to slip to $51.5 billion from $52.5 billion in September.

Weekly Initial Jobless Claims to be reported at 8:30 AM EST on Thursday are expected to increase to 221,000 from 213,000 last week.

October Canadian Trade Deficit to be released at 8:30 AM EST on Thursday is expected to slip to $700 million from $980 million in September.

October Factory Orders to be released at 10:00 AM EST on Thursday are expected to decline 0.5% versus a drop of 0.6% in September.

November Non-farm Payrolls to be released at 8:30 AM EST on Friday is expected to increase to 183,000 from 128,000 in October. November Unemployment Rate is expected to remain unchanged at 3.6% from October. November Hourly Earnings are expected to increase 0.3% versus a gain of 0.2% in October.

November Canadian Employment Report to be released at 8:30 AM EST on Friday is expected to report a 15,900 improvement versus a 1,800 decline in October. November Unemployment Rate is expected to increase to 5.6% from 5.5% in October.

December Michigan Consumer Sentiment Index to be released at 10:00 AM EST on Friday is expected to slip to 96.5 from 96.8 in November.

Earnings News This Week

Trader's Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for November 29th 2019

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for November 29th 2019

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for November 29th 2019

Green: Increase from previous day

Red: Decrease from previous day

StockTwits released on Friday @EquityClock

Changes in Seasonality at this time of year

TSX Energy Sector normally bottoms at the end of November on a real and relative basis. Strongest period is from the third week in January to the end of April. Note that technicals are not there yet this year, but should be watched closely for change and an entry point.

S&P/TSX Capped Energy ($SPTEN) Seasonal Chart

Ditto for U.S. Energy sector and related ETFs!

Energy Sector Seasonal Chart

Ditto for the Energy Equipment and Services Industry!

Energy Equipment Industry Seasonal Chart

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

S&P 500 Momentum Barometers

Percent of S&P 500 stocks trading above their 50 day moving average increased last week to 72.95 from 67.94. Percent remains intermediate overbought, but continues to trend higher.

Bullish Percent Index of S&P 500 stocks increased last week to 74.00 from 71.40. The Index remains intermediate overbought, but continues to trend higher

TSX Momentum Barometers

Percent of TSX stocks trading above their 50 day moving average increased last week to 70.78 from 63.18. Percent remains intermediate overbought, but continues to trend higher.

Bullish Percent Index for TSX stocks increased last week to 69.10 from 68.67. The Index remains intermediate overbought, but continues to trend higher.

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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