Tech Talk for Tuesday December 11th 2018

U.S. equity index futures were higher this morning. S&P 500 futures were up 29 points in pre-opening trade.

Index futures moved slightly higher following release of the November Producer Price Index at 8:30 AM EST. Consensus was an increase of 0.1% versus a decline of 0.6% in October. Actual was an increase of 0.1%. Excluding food and energy, consensus for the November Producer Price Index was an increase of 0.2%. Actual was an increase of 0.3%.

General Motors (GM $34.42) and Ford (F $8.82) are expected to open higher after China moved to cut auto tariffs on auto imports from 40% to 15%.

Pfizer (PFE $44.40) is expected to open lower after JP Morgan downgraded the stock to Neutral from Overweight. Target is $46.

Enbridge (ENB $42.09) is expected to open higher after the company increased its dividend by 10%.

EquityClock's Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/12/10/stock-market-outlook-for-december-11-2018/

Note seasonality chart on U.S. Job Openings

EquityClock Note

Stocks breaking down. In Seasonal Advantage Portfolio we are not handcuffed by dates and instead employ a three-pronged approach (fundamental, technical, and seasonal), which is why we took defensive action early last week. Learn more about our approach: http://www.equityclock.com/About/Seasonal-Advantage-Portfolio/ ...pic.twitter.com/phKSbrhCgq

Observations

British Pound responds to Brexit uncertainty

Thoughts offered yesterday afternoon during a busy Monday trading session

Wow, what a difference a week makes! The Dow dropped 8.1%, the S&P 500 dropped 7.7% and the TSX Composite lost 5.0% from their highs set just last Monday to their lows today (including a 508 point drop by the Dow Jones Industrial Average this morning). Break downs by all three indices this morning below October 29th lows was scary at best. Indices are not following their seasonal patterns this year so far. The drops have had little to do with corporate news. Corporate reports on both sides of the border has been positive (e.g. strong earnings gains and dividend increases announced by the Canadian banks, share buybacks announced by major corporations including Facebook today and Intel, Disney late last week). According to FactSet, S&P 500 company earnings are expected to grow at a healthy 8.6% rate in 2019 on a 5.6% increase in sales.  Equity market sentiment is driven by short term political events (Trump's tweets?). Tax loss selling also is a factor until the end of this week. Nice recovery this afternoon by U.S. equity indices from near their previous October lows! On a seasonal basis, the next three week period is the strongest time frame in the year for North American equity. Reasons for strength already have started to appear: Investment dealers have started to release their annual forecasts for next year. Bank of America/Merrill released its equity outlook for 2019 on BNNBloomberg this afternoon. Preferred strategy is to keep in contact (i.e hold hands) with short term jittery traders. Short term technical indicators already show that North American equity markets are deeply oversold. Short term traders will want more evidence that equity markets have bottomed before adding to commitments. Longer term investors can use weakness to add to seasonally attractive sectors.

StockTwits ReleasedYesterday @EquityClock

Technical action by S&P 500 stocks to 10:15:Bearish. No breakouts. Breakdowns: $LKQ $IPG $NWS $HBAN $JPM $KEY $NTRS $WFC $MYL $WRK $UPS $HUM

S&P Bank SPDRs $KBE moved below $40.31 extending an intermediate downtrend

Regional Bank SPDRs $KRE moved below $50.69 extending an intermediate downtrend.

JP Morgan $JPM, a Dow Jones Industrial stock moved below $102.73 extending an intermediate downtrend

Auto ETF $CARZ moved below $32.23 extending an intermediate downtrend

Agriculture ETF $MOO moved below $59.70 extending an intermediate downtrend.

US Job Openings up 4.2% (NSA) in October, weaker than the 7.5% increase that is average for the month. $MACRO #Economy #Employment

Midcap SPDRs $MDY moved below $321.76 extending an intermediate downtrend

Canadian Tire $CTC.A.CA, a TSX 60 stock moved below $144.36 extending an intermediate downtrend

Intact Financial $IFC.CA moved below $99.66 completing a Head & Shoulders pattern

Badger Daylighting $BAD.CA moved above $32.41 extending an intermediate uptrend

Move by the S&P 500 Index below 2603.54 triggered broad selling. Since 10:15, another 21 S&P 500 stocks broke intermediate support $SPX

Dow Jones Industrial Average $INDU and related ETF $DIA also broke below its October low at 24,122.29.

Gold Equity ETF $GDX moved above $20.51 extending an intermediate uptrend.

Industrial SPDRs $XLI moved below $66.99 extending an intermediate downtrend

Healthcare Providers ETF $IHF moved below $183.86 completing a double top pattern

Fertilizer ETF $SOIL moved below $9.35 extending an intermediate downtrend

Dow Jones Transportation Average $TRAN and related ETF $IYT moved below intermediate support at $9,757.50

TSX Composite Index $TSX.CA moved below intermediate support at 14,639.70

Magna International $MG.CA $MGA, a TSX 60 stock moved below $59.14 Cdn extending an intermediate downtrend

Inter Pipeline $IPL.CA, a TSX 60 stock moved below $20.55 extending an intermediate downtrend

CI Financial $CIX.CA moved below $18.38 extending an intermediate downtrend.

Barrick Gold $ABX $ABX.CA, a TSX 60 stock moved above $14.07 U.S.extending an intermediate uptrend

Technical Scoop
Thanks to David Chapman and www.EnrichedInvesting.com

Following is a link:

http://www.enrichedinvesting.com/PDF/Volatility-Huawei-based-Threats-Yellow-Vest-Riots-No-Deep-End-Yet-Bond-and-Gold-Safe-Haven-Oil-Bounce.pdf

Keith Richards' Blog

Keith says, "Bear-o-meter drops a point". Following is a link:

https://www.valuetrend.ca/bear-o-meter-drops-a-point/

Trader's Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for December 10th 2018

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for December 10th 2018

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for December 10th 2018

Green: Increase from previous day

Red: Decrease from previous day

S&P 500 Momentum Barometer

The Barometer added 1.60 to 28.80 yesterday. It remains intermediate oversold.

TSX Momentum Barometer

The Barometer slipped 0.41 to 33.88 yesterday. It remains intermediate oversold.

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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