Vialoux's Technical Talk – July 13, 2015

July 13, 2015

9 minute read

Editor’s Note: Mr. Vialoux is scheduled to appear on BNN’s Berman’s Call today at 11:00 AM EDT

Economic News

June Retail Sales to be released at 8:30 AM EDT on Tuesday are expected to increase 0.3% versus a gain of 1.2% in May. Excluding Auto Sales, June Retail Sales are expected to increase 0.5% versus a gain of 1.0% in May.

May Business Inventories to be released at 10:00 AM EDT on Tuesday are expected to increase 0.5% versus a gain of 1.0% in April

June Producer Prices to be released at 8:30 AM EDT on Wednesday are expected to increase 0.3% versus a gain of 0.5% in May. Excluding food and energy, June Producer Prices are expected to increase 0.1% versus a gain of 0.1% in May.

July Empire Manufacturing Index to be released at 8:30 AM EDT on Wednesday is expected to increase to 3.5 from -1.0 in June.

June Industrial Production to be released at 9:15 AM EDT on Wednesday is expected to increase 0.2% versus -0.2% in May. June Capacity Utilization is expected to remain unchanged from May at 78.1%.

Bank of Canada Interest Rate to be released at 10:00 AM EDT on Wednesday is expected to fall to 0.75% from 0.50%.

July Beige Book is scheduled to be released at 2:00 PM EDT on Wednesday.

Weekly Initial Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to fall to 283,000 from 297,000.

July Philadelphia Fed Index to be released at 10:00 AM EDT on Thursday is expected to slip to 12.0 from 15.2 in June

June Consumer Prices to be released at 8:30 AM EDT on Friday are expected to increase 0.3% versus a gain of 0.4% in May. Excluding food and energy, June Consumer Prices are expected to increase 0.2% versus a gain of 0.1% in May.

June Housing Starts to be released at 8:30 AM EDT on Friday are expected to increase to 1,123,000 from 1,036,000 in May.

Canadian June Consumer Prices to be released at 8:30 AM EDT on Friday are expected to increase 0.2% versus a gain of 0.6% in May.

July Michigan Sentiment Index to be released at 10:00 AM EDT on Friday is expected to increase to 96.5 from 96.1.

Earnings News This Week

The Bottom Line

News events (Greece, Iran, China) will drive equity markets this week, one way or the other. Meanwhile, early signs of a peak in summer volatility have appeared. Now is the time to prepare for seasonal buying opportunities. Gold and silver are top of the list.

Equities

Daily Seasonal/Technical Equity Trends for July 10^th 2015

Green: Increase from previous day

Red: Decrease from previous day

The S&P 500 Index slipped 0.16 (0.01%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average. Short term momentum indicators are oversold and showing early signs of recovery.

Percent of S&P 500 stocks trading above their 50 day moving average increased last week to 40.20% from 35.00%. Percent is intermediate oversold and showing early signs of recovery.

Percent of S&P 500 stocks trading above their 200 day moving average increased last week to 54.60% from 53.60%.

Bullish Percent Index for S&P 500 stocks dipped last week to 54.80% from 57.60% and remained below its 20 day moving average. The Index remains intermediate overbought and trending down.

Bullish Percent Index for TSX stocks dropped last week to 52.02% from59.68% and remained below its 20 day moving average. The Index remains intermediate overbought and trending down.

The TSX Composite Index dropped 271.32 points (1.85%) last week. Intermediate trend remains down (Score: 0.0). The Index remains below its 20 day moving average (Score 0.0). Strength relative to the S&P 500 Index remains negative (Score: 0.0). Technical score remains at 0.0 out of 3.0. Short term momentum indicators are trending down.

Percent of TSX stocks trading above their 50 day moving average dropped last week to 19.84% from 27.16% from after falling as low as 17.00% on Thursday. Percent continues to trend downward, but is intermediate oversold. Historically, a recovery from below 25% has provided an intermediate buying opportunity. More evidence of a low is needed.

Percent of TSX stocks trading above their 200 day moving average dropped to 35.22% from 40.74%. Percent remains in an intermediate downtrend.

The Dow Jones Industrial Average added 30.30 points (0.17%) last week. Intermediate trend remains down. The Average remains below its 20 day moving average. Strength relative to the S&P 500 Index changed to positive from neutral. Technical score improved to 1.0 from 0.5 out of 3.0. Short term momentum indicators are oversold, but showing early signs of bottoming.

Bullish Percent Index for Dow Jones Industrial Average stocks dropped to 56.67% from 63.33% and remained below its 20 day moving average. The Index remains intermediate overbought and trending down.

Bullish Percent Index for NASDAQ Composite stocks dropped last week to 55.13% from 58.36%) and remained below its 20 day moving average. The Index remains intermediate overbought and trending down.

The NASDAQ Composite Index slipped 11.51 points (0.23%) last week. Intermediate trend remains up. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index changed to negative from neutral. Technical score slipped to 1.0 from 1.5 out of 3.0. Short term momentum indicators are oversold and showing early signs of bottoming.

The Russell 2000 Index added 3.76 points (0.30%) last week. Intermediate trend remains up. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remain at 1.0 out of 3.0. Short term momentum indicators are oversold and showing early signs of bottoming.

The Dow Jones Transportation Average added 79.15 points (0.97%) last week. Intermediate trend remains down. The Average remains below its 20 day moving average. Strength relative to the S&P 500 Index changed to neutral from negative. Technical score improved to 0.5 from 0.0 out of 3.0. Short term momentum indicators are oversold and showing early signs of bottoming.

The Australia All Ordinaries Composite Index dropped 49.90 points (0.90%) 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 neutral from positive. Technical score slipped to 0.5 from 1.0 out of 3.0. Short term momentum indicators are mixed.

The Nikkei Average plunged 759.96 points (3.70%) last week. Intermediate trend changed to down from up on a move below 19,990.55 and 19,257.85. The Average dropped below its 20 day moving average. Strength relative to the S&P 500 Index changed to negative from positive. Technical score dropped to 0.0 from 3.0 out of 3.0. Short term momentum indicators are trending down.

iShares Europe 350 units added $0.79 (1.68%) last week. Intermediate trend remains down. Units moved above their 20 day moving average on Friday. Strength relative to the S&P 500 Index changed to positive from negative. Technical score improved to 2.0 from 0.0 out of 3.0. Short term momentum indicators are trending up.

The Shanghai Composite Index gained 190.88 points (5.18%) last week. Intermediate trend remains neutral. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remains at 0.5 out of 3.0. Short term momentum indicators are trending up.

iShares Emerging Markets lost $0.33 (0.77%) last week. Intermediate trend remains down. Units remain below their 20 day moving average. Strength relative to the S&P 500 Index changed to negative from neutral. Technical score changed to 0.0 from 0.5 out of 3.0. Short term momentum indicators are oversold and showing early signs of bottoming.

Currencies

The U.S. Dollar Index slipped 0.17 (0.12%) last week. Intermediate trend remains down. The Index remains above its 20 day moving average. Short term momentum indicators are overbought and showing early signs of peaking.

The Euro added 0.75 (0.68%) last week. The Euro remains below its 20 day moving average. Short term momentum indicators are trending up.

The Canadian Dollar dipped US0.71 cents (0.89%) last week. Intermediate trend remains negative. The Canuck Buck remains below its 20 day moving average. Short term momentum indicators are oversold and showing early signs of bottoming.

The Japanese Yen added 0.20 (0.25%) last week. Intermediate trend remains down. The Yen remains above its 20 day moving average. Short term momentum indicators are mixed.

Commodities

Daily Seasonal/Technical Commodities Trends for July 10^th 2015

Green: Increase from previous day

Red: Decrease from previous day

The CRB Index dropped 6.30 points (2.81%) last week. Intermediate trend changed to down from neutral on a move below 218.92. The Index moved below its 20 day moving average. Strength relative to the S&P 500 Index changed to negative from positive. Technical score dropped to 0.0 from 2.5 out of 3.0. Short term momentum indicators are mixed.

Gasoline was unchanged last week. Intermediate trend changed to neutral from up on a move below $1.92. Gas remains below its 20 day moving average. Strength relative to the S&P 500 Index remains neutral. Technical score slipped to 1.0 form 1.5. Short term momentum indicators are trending up.

Crude Oil plunged $3.68 per barrel (6.51%) last week. Intermediate downtrend was confirmed on a move below $56.83. Crude remains below its 20 day moving average. Strength relative to the S&P 500 Index changed to negative from neutral. Technical score slipped to 0.0 from 0.5 out of 3.0. Short term momentum indicators are oversold and showing early signs of bottoming.

Natural gas dropped $0.06 per MBtu (2.12%) last week. Intermediate trend remains up. “Natty” fell below its 20 day moving average. Strength relative to the S&P 500 Index changed to neutral from positive. Technical score fell to 1.5 from 3.0 out of 3.0. Short term momentum indicators were mixed.

The S&P Energy Index dropped 8.08 points (1.47%) last week. Intermediate trend changed to down from up on a move below 539.26. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score slipped to 0.0 from 1.0 out of 3.0. Short term momentum indicators remain down.

The Philadelphia Oil Services Index dropped 5.60 points (2.88%) last week. Intermediate trend remains neutral. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remains at 0.5 out of 3.0. Short term momentum indicators are mixed.

Gold dropped $2.20 per ounce (0.19%) last week. Intermediate trend remains down. Gold remains below its 20 day moving average. Strength relative to the S&P 500 Index remains neutral. Technical score remained at 0.5 out of 3.0. Short term momentum indicators are oversold and showing early signs of bottoming,

Silver slipped $0.08 per ounce (0.51%) last week. Intermediate trend remains down. Silver remains below its 20 day moving average. Strength relative to the S&P 500 Index and Gold improved to neutral. Technical score remains at 0.5 out of 3.0. Short term momentum indicators are trending up.

The AMEX Gold Bug Index fell 7.20 points (4.84%) 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 remained at 0.0 out of 3.0. Short term momentum indicators are trending down

Platinum plunged $53.30 per ounce (4.90%) last week. Trend remains down. PLAT remains below its 20 day moving average. Strength relative to the S&P 500 Index and Gold turned negative. Momentum indicators are trending down

Palladium dropped $41.95 per ounce (6.05%) last week. Trend remains down. PALL remains below its 20 day MA. Strength relative to S&P 500 Index and Gold is negative.

Copper slipped $0.10 per lb. (3.79%) last week. Intermediate trend changed to down on a move below $2.55 per lb. Copper remains below its 20 day moving average. Strength relative to the S&P 500 Index remains neutral. Technical score slipped to 0.5 from 1.0 out of 3.0. Short term momentum indicators are trending up.

The TSX Metals & Mining Index plunged 36.74 points (5.50%) 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 oversold, but showing early signs of bottoming.

Lumber added $9.50 (3.33%) last week. Intermediate trend remains up. Lumber moved above its 20 day MA. Strength relative to the S&P 500 Index changed to positive from neutral.

The Grain ETN slipped $0.01 (0.03%) last week. Intermediate trend remains up. . Units remain above their 20 day MA. Strength relative to the S&P 500 Index remains positive.

The Agriculture ETF dropped $2.1`3 (3.82%) last week. Intermediate trend remains up. Units moved below their 20 day moving average. Strength relative to the S&P 500 Index changed to negative from positive. Technical score dropped to 1.0 from 3.0. Short term momentum indicators are mixed.

Interest Rates

The yield on 10 year Treasuries added 2.4 basis points (1.00%) last week. Intermediate trend remains up. Yield remains above its 20 day moving average. Short term momentum indicators are mixed.

Price of the long term Treasury ETF added $0.05 (0.04%) last week. Units remain below their 20 day moving average. Short term momentum indicators are mixed.

Other Issues

The VIX Index added 0.04 (0.24%) last week after reaching as high as 20.05 on Thursday. Intermediate trend remains up. The Index remains above its 20 day moving average.

Greece, Iran and China remain in the spotlight. Events over the weekend generally were encouraging.

Short term technical indicators for most equity markets and sectors are oversold and showing early signs of bottoming.

Second quarter earnings reports become a focus this week. Financial service companies lead the parade. According to www.Factset.com consensus is calling for a 4.4% decline on a year-over-year basis for S&P 500 companies.

Sectors

Daily Seasonal/Technical Sector Trends for July 10^th 2015

Green: Increase from previous day

Red: Decrease from previous day

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^N225 Relative to the S&P 500

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 July 10^th 2015

Author

Don Vialoux, EquityClock.com

Don Vialoux is the author of free daily reports on equity markets, sectors, commodities and Exchange Traded Funds. All of the views expressed herein are his personal views although they may be reflected in positions or transactions in the various client portfolios. Daily reports are available at http://www.timingthemarket.ca.