by Don Vialoux, Timing the Market
Economic News This Week
July Consumer Prices to be released at 8:30 AM EDT on Tuesday are expected to increase 0.1% versus a gain of 0.3% in June. Excluding food and energy, July CPI is expected to increase 0.1% versus a gain of 0.1% in June.
July Housing Starts to be released at 8:30 AM EDT on Tuesday are expected to increase to 964,000 from 893,000 in June.
FOMC Meeting Minutes from the July 30th meeting are expected to be released at 2:00 PM EDT on Wednesday
Initial Weekly Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to fall to 308,000 from 311,000 last week.
July Existing Home Sales to be released at 8:30 AM EDT on Friday are expected to slip to 5.00 million units from 5.04 million units in June.
Canadian June Retail Sales to be released at 8:30 AM EDT on Friday are expected to increase 0.4% versus a gain of 0.7% in May.
Canadian July Consumer Prices are expected to slip 0.1% versus a gain of 0.1% in June.
August Philadelphia Fed to be released at 10:00 AM EDT on Friday is expected to fall to 15.5 from 23.9 in July.
July Leading Economic Indicators to be released at 10:00 AM EDT on Friday are expected to increase 0.7% versus a gain of 0.3% in June.
Earnings News This Week
Tuesday: Home Depot, TJX Companies
Wednesday: JM Smucker, Hewlett Packard, Lowes, Sears Canada, Staples, Target
Thursday: Dollar Tree, Gap Stores
Friday: Royal Bank
Equity Trends
Summary of Weekly Seasonal/Technical Parameters for Equity Indices/ETFs
Key:
Seasonal: Positive, Negative or Neutral on a relative basis applying EquityClock.com charts
Trend: Up, Down or Neutral
Strength relative to the S&P 500 Index: Positive, Negative or Neutral
Momentum based on an average of Stochastics, RSI and MACD: Up, Down or Mixed
Twenty Day Moving Average: Above, Below
Green: Upgrade or higher
Red: Downgrade or lower
The S&P 500 Index gained 23.47 points (1.22%) last week. Intermediate trend remains down. The Index moved above its 20 day moving average. Short term momentum indicators are trending up. Note that the Index recovered to its breakdown level where resistance was encountered.
Percent of S&P 500 stocks trading above their 50 day moving average increased last week to 46.80% from 35.40%. Percent is intermediate oversold and recovering
Percent of S&P 500 stocks trading above their 200 day moving average increased last week to 74.40% from 72.20%. Percent remains intermediate overbought and trending higher.
Bullish Percent Index for S&P 500 stocks increased last week to 71.20% from 70.60% and remained below its 15 day moving average. The Index remains overbought and trending down.
Bullish Percent Index for TSX stocks slipped last week to 80.74% from 81.15% and remained below its 15 day moving average. The Index remains intermediate overbought and trending down.
The TSX Composite Index added 107.90 points (0.71%) last week. Intermediate trend remains up (Score: 1.0). The Index remains below its 20 day moving average (Score: 0.0). Strength relative to the S&P 500 Index changed from positive to neutral (Score: 0.5). Technical score based on these indicators slipped to 1.5 from 2.0 out of 3.0. Short term momentum indicators are mixed
Percent of TSX stocks trading above their 50 day moving average increased last week to 53.09% from 51.85%. Percent remains intermediate overbought.
Percent of TSX stocks trading above their 200 day moving average slipped last week to 74.49% from 75.31%. Percent remains intermediate overbought.
The Dow Jones Industrial Average gained 108.98 points (0.66%) last week. Intermediate trend remains down. The Average remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remains at 0.0 out of 3.0. Short term momentum indicators are trending up.
Bullish Percent Index for Dow Jones Industrial Average stocks increased last week to 83.33% from 80.00%, but remained below its 15 day moving average. The Index remains intermediate overbought and trending down.
Bullish Percent Index for NASDAQ Composite stocks increased last week to 55.28% from 53.90% and remained below is 15 day moving average. The Index remains intermediate overbought and trending down.
The NASDAQ Composite Index gained 94.03 points (2.15%) last week. Intermediate trend remains down. The Index moved above its 20 day moving average. Strength relative to the S&P 500 Index remains positive. Technical score improved to 2.0 from 1.0 out of 3.0. Short term momentum indicators are trending up.
The Russell 2000 Index added 10.30 points (0.91%) last week. Intermediate trend remains down. The Index moved above its 20 day moving average. Strength relative to the S&P 500 Index changed from positive to neutral. Technical score increased to 1.5 from 1.0 out of 3.0. Short term momentum indicators are trending up.
The Dow Jones Transportation Average added 171.65 points (2.12%) last week. Intermediate trend remains neutral. The Average moved above its 20 day moving average. Strength relative to the S&P 500 Index remains neutral. Technical score improved to 2.0 from 1.0 out of 3.0. Short term momentum indicators are trending up.
The Australia All Ordinaries Composite Index added 130.01 points (2.39%) last week. Intermediate trend remains up. The Index moved above its 20 day moving average. Strength relative to the S&P 500 Index remains neutral. Technical score improved to 2.5 from 1.5 out of 3.0. Short term momentum indicators are trending up
The Nikkei Average gained 539.97 points (3.65%) last week. Intermediate trend remains down. The Average remains below its 20 day moving average. Strength relative to the S&P 500 Index changed from negative to neutral. Technical score increased to 0.5 from 0.0 out of 3.0. Short term momentum indicators are trending up.
Europe 350 iShares added $0.46 (1.01%) last week. Intermediate trend remains down. Units remain below their 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remains at 0.0 out of 3.0. Short term momentum indicators are trending up.
The Shanghai Composite Index gained 32.31 points (1.47%) last week. Intermediate trend remains up. The Index remains above its 20 day moving average. Strength relative to the S&P 500 Index remains positive. Technical score remains at 3.0 out of 3.0. Short term momentum indicators are trending up, but are overbought and showing signs of peaking.
iShares Emerging Markets added $0.82 (1.88%) last week. Intermediate trend remains up. Units moved above their 20 day moving average. Strength relative to the S&P 500 Index remains neutral. Technical score increased to 2.5 from 1.5 out of 3.0. Short term momentum indicators are trending up.
Currencies
The U.S. Dollar was unchanged last week. Intermediate trend remains up. The Index remains above its 20 day moving average. Short term momentum indicators are overbought and rolling over.
The Euro slipped 0.12 (0.09%) last week. Intermediate trend is down. The Euro remains below its 20, 50 and 200 day moving average. Short term momentum indicators have bottomed and rolling up.
The Canadian Dollar gained US 0.65 cents (0.71%) last week. Intermediate trend remains neutral. The Canuck Buck remains below its 20 day moving average. Short term momentum indicators are trending up.
The Japanese Yen slipped 0.29 (0.30%) last week. Intermediate trend remains neutral. The Yen remains below its 20 day moving average. Short term momentum indicators are mixed.
Commodities
The CRB Index fell another 2.50 points (0.85%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index changed to negative from neutral.
Gasoline dropped another $0.05 per gallon (1.82%) last week. Intermediate trend remains down. Gasoline remains below its 20 day moving average. Strength relative to the S&P 500 Index changed to negative from neutral.
Crude Oil dropped $0.41 per barrel (0.42%) last week. Intermediate trend remains down. Crude remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Strength relative to the S&P 500 Index remains negative. Short term momentum indicators are oversold and showing early signs of bottoming.
Natural Gas fell $0.16 per MBtu (4.05%) last week. Intermediate trend remains neutral. Gas fell below its 20 day moving average. Strength relative to the S&P 500 Index changed to neutral from positive. Technical score fell to 1.0 from 2.5 out of 3.0. Short term momentum indicators are mixed.
The S&P Energy Index dropped 3.35 points (0.48%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remains at 0.0 out of 3.0. Short term momentum indicators are trending down and oversold.
The Philadelphia Oil Services Index added 1.82 points (0.06%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remains at 0.0 out of 3.0. Short term momentum indicators are trending down and are oversold.
Gold fell $5.50 per ounce (0.42%) last week. Intermediate trend remains up. Gold remains above its 20 day moving average. Strength relative to the S&P 500 Index changed from positive to neutral. Technical score eased to 2.5 from 3.0 out of 3.0. Short term momentum indicators are trending up.
Silver fell another $0.39 per ounce (1.96%) last week. Intermediate trend remains up. Silver remains below its 20 day moving average. Strength relative to the S&P 500 Index changed from neutral to negative. Technical score slipped to 1.0 from 1.5 out of 3.0.. Short term momentum indicators are trending down and are oversold.
The AMEX Gold Bug Index added 3.18 points (1.31%) last week. Intermediate uptrend was confirmed on a move above 251.76. The Index remains above its 20 day moving average. Strength relative to the S&P 500 Index changed to positive from neutral. Short term momentum indicators are trending up.
Platinum fell $19.30 per ounce (1.31%) last week. Intermediate trend remains up. PLAT remains below its 20 day moving average. Strength relative to the S&P 500 Index changed to neutral.
Palladium gained $33.75 per ounce (3.92%) last week. Intermediate uptrend was confirmed on Friday with a break to an all-time high. Strength relative to Gold and S&P 500 is positive.
Copper dropped another $0.06 per lb. (1.88%) last week. Intermediate trend remains down. Copper remains below its 20 day moving average. Strength relative to the S&P 500 Index changed to negative from neutral. Technical score fell to 0.0 from 0.5. Short term momentum indicators are trending down and are oversold.
The TSX Metals & Mining Index dropped 18.63 points (2/06%) last week. Intermediate trend changed from up to neutral on a move below 887.31. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index changed to negative from neutral. Technical score dropped to 0.5 from 1.5 out of 3.0. Short term momentum indicators are trending down.
Lumber added $1.60 (0.46%) last week. Trend remains up. Lumber remains above its 20 day moving average. Strength relative to the S&P 500 Index remains positive.
The Grain ETN added $0.10 per unit (0.26%) last week. Trend remains down. Units moved above their 20 day moving average. Strength relative to the S&P 500 Index remains neutral.
The Agriculture ETF added $0.66 (1.24%) last week. Intermediate trend remains down. Units moved above their 20 day moving average. Strength relative to S&P 500 Index changed from positive to neutral. Technical score improved to 1.5 from 1.0 out of 3.0. Short term momentum indicators are trending up.
Interest Rates
The yield on 10 year Treasuries dropped 7 basis points (2.90%) last week. Trend remains negative. Yield remains below its 20 day moving average. Short term momentum indicators are trending down are oversold.
Conversely, price of the long term Treasury ETF added $2.19 (1.90%) last week. Intermediate trend remains up. Units remain above their 20 day moving average.
Other Issues
The VIX Index dropped 2.62 (16.6%) last week. Intermediate trend remains up. The Index fell below its 20 day moving average. Despite the drop, VIX remains elevated.
Economic focus this week is on the FOMC Meeting Minutes on Wednesday. Will the Fed stay the course or will the slowdown of monetary stimulus happen sooner?
Other economic news is expected to be mixed.
Earnings focus this week is on retail merchandiser companies.
Short and intermediate technical indicators have moved higher from oversold levels, but most sectors and markets have recovered to a zone of resistance.
Seasonal influences between now and the end September for most equity markets and sectors generally are negative, particularly during mid-term U.S. election years. Exceptions exist (e.g. gold, health care, uranium, agriculture). Remember: bottom of the U.S. Presidential Cycle on average occurs at the beginning of October in a mid-term election year.
International events (e.g. Ukraine, Palestine, Pakistan and Libya) will continue to elevate volatility.
The Bottom Line
Now is a time for caution in equity market. Special situations are available as indicated above. A healthy weight in cash and cash equivalents makes sense between now and the end of September.
StockTwits Released on Friday
Nice breakout by $CORN above a 5 week base building pattern. Good for Ag stocks!
Editorâs Note: Agriculture stocks such as Agrium were notably stronger on Friday.
Nice breakout by $IYR to an all-time high. âTis the season!
Quiet bullish technical action to 10:30. 9 S&P stocks broke resistance: $LEG, $MNST, $TAP, $A, $EGX, $ADSK, $ECL, $EL, $FISV.
Ukraine tensions triggered breakout by $PALL to an all-time high.
Selected Cdn. Energy stocks are breaking support including CPG.CA and COS.CA
Special Free Services available through www.equityclock.com
Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices. To login, simply go to http://www.equityclock.com/charts/
Following is an example
Monitored Technical/Seasonal Trade Ideas
Sell/Short SOXX was taken out of the list at a profit of 1.4% after its technical score fell below 1.5
Sell/Short XHB was taken out of the list at a profit of 1.5% after its period of seasonal weakness ended.
A security must have a Technical Score of 1.5 â 3.0 to be on this list.
Green: Increased Technical Score
Red: Reduced Technical Score
Disclaimer: Comments, charts and opinions offered in this report by www.timingthemarket.ca and 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. Don and Jon Vialoux are Research Analysts with Horizons ETFs Management (Canada) Inc. All of the views expressed herein are the personal views of the authors and are not necessarily the views of Horizons ETFs Management (Canada) Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by Horizons ETFs Management (Canada) Inc.
Individual equities mentioned in StockTwits are not held personally or in HAC.
Horizons Seasonal Rotation ETF HAC August 15th 2014
Copyright © Don Vialoux, Jon Vialoux, Brooke Thackray
