Tech Talk for Tuesday October 10th 2017

Tech Talk for Tuesday October 10th 2017




by Don Vialoux, Timingthemarket.ca

Another Milestone

Over the weekend, number of StockTwits followers exceeded 43,000. Previous milestone at 42,000 followers was reached on September 13th

WALL STREET RAW RADIO WITH HOST, MARK LEIBOVIT – SATURDAY – OCTOBER 7, 2017:

GUESTS INCLUDE DON VIALOUX, SINCLAIR NOE, HARRY BOXER, HENRY WEINGARTEN AND KYLE DENNIS.

http://tinyurl.com/y9cqhezf

The Bottom Line

Equity markets continue to climb a “wall of worry”. Technical parameters are overbought, but have yet to show signs of rolling over. Seasonally based on the past 20 years, today is the bottom for the S&P 500 Index and TSX Composite (See charts below). Seasonal influences turn positive, particularly for economic sensitive sectors (e.g. Materials, Industrials, Financials, Technology). Preferred strategy is to accumulate favoured equities and ETFs on weakness.

Economic News This Week

Canadian September Housing Starts to be released at 8:15 AM EDT on Tuesday are expected to slip to 215,000 from 223,000 in August.

FOMC Meeting Minutes are released at 2:00 PM EDT on Wednesday

September Producer Prices to be released at 8:30 AM EDT on Thursday are expected to increase 0.4% versus a gain of 0.2% in August. Excluding food and energy, September Producer Prices are expected to increase 0.2% versus a gain of 0.1% in August.

September Consumer Prices to be released at 8:30 AM EDT on Friday are expected to increase0.6% versus a gain of 0.4% in August. Excluding food and energy, September Consumer Prices are expected to increase 0.2% versus a gain of 0.2% in August.

September Retail Sales to be launched at 8:30 AM EDT on Friday are expected to increase 1.4% versus a decline of 0.2% in August. Excluding auto sales, September Retail Sales are expected to increase 0.4% versus a decline of 0.1% in August.

August Business Inventories to be released at 10:00 AM EDT on Friday are expected to increase 0.6% versus a gain of 0.2% in July.

October Consumer Sentiment to be released at 10:00 AM EDT on Friday is expected to increase to 95.5 from 95.1 in September.

Earning News This Week

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Observations

Technical action by individual S&P 500 stocks was bullish last week. Notable among stocks breaking resistance were Energy and Financial stocks. Notable among stocks breaking support were Consumer Staple stocks. Number of stocks breaking resistance totaled 52 while number of stocks breaking support totaled 9. Number of stocks trading in an uptrend increased to 286 from 260, number of stocks trading in a neutral trend dropped to 85 from 93 and number of stocks in a downtrend decreased to 129 from 147. The Up/Down ratio increased last week to (286/129=) 2.22 from 1.77.

Medium term technical indicators (Percent of stocks trading above their 50 day moving average, Bullish Percent Index) remain at intermediate overbought levels, but have yet to show signs of rolling over

Short term technical indicators (short term momentum, above/below 20 day moving average) mostly moved higher last week to overbought levels, but have yet to show signs of rolling over.

Technical parameters show increasing evidence of a bottom in the U.S. Dollar Index and a top in other major world currencies (including the Canadian Dollar).

Seasonality on a wide variety of equity indices, commodities and sectors begin to turn to neutral/positive beginning early in October and continue to improve to the end of October. During the past 20 years, the S&P 500 Index and TSX Composite Index normally bottom today (October 10th). See updated ratings for markets, commodities and sectors below.

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