Tech Talk for Monday June 27th 2016

Another Milestone

Over the weekend, another milestone for EquityClock was reached on StockTwits. Number of followers increased to 24,000. Previous milestone was reached on June 7^th at 23,000 followers.

Economic News This Week

Third estimate of real U.S.GDP to be released at 8:30 AM EDT on Tuesday is expected to improve to 1.0% from the second estimate at 0.8%.

April Case/Shiller 20 City Home Price Index to be released at 9:00 EDT on Tuesday is expected to increase to 5.5% from 5.4% on a year-over-year basis.

June Consumer Confidence Index to be released at 10:00 AM EDT on Tuesday is expected to improve to 93.1 from 92.6 in May.

May Personal Income to be released at 8:30 AM EDT on Wednesday is expected to increase 0.3% versus a gain of 1.0% in April. May Personal Spending is expected to increase 0.3% versus a gain of 1.0% in April.

Weekly Initial Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to increase to 265,000 from 259,000 last week.

Cdn. April Real GDP to be released at 8:30 AM EDT on Thursday is expected to increase 0.1% versus a gain of 0.2% in March.

June Chicago PMI to be released at 9:45 AM EDT on Thursday is expected to increase to 50.8 from 49.3 in May.

May Construction Spending to be released at 10:00 AM EDT on Friday is expected to increase 0.5% versus a decline of 1.8% in April.

June ISM to be released at 10:00 AM EDT on Friday is expected to increase to 51.4 from 51.3 in May.

Earnings News This Week

Tuesday: Carnival, Nike

Wednesday: Monsanto, General Mills

Thursday: Conagra, Constellation Brands, McCormick

The Bottom Line

Brexit is expected to continue to impact equity markets negatively this week. (hope you like the color red!)  Precious metals and precious metal equities and ETFs are the exception. ‘Tis the season for higher volatility and lower equity markets until just before U.S. Presidential election day.

Observations

Trading activity on North American equity markets is expected to diminish as the week progresses toward holidays. July 1^st is a holiday in Canada. July 4^th is a holiday in the U.S.

U. S. economic news this week generally is expected to be slightly positive.

Brexit and its related uncertainty for world equity and currency markets are not over. Over the weekend, Moody’s downgraded the U.K’s economic outlook from stable to negative. The vote on Friday is just the start of a renegotiated agreement that could last up to two years.

Brexit was the main factor to cause a spike in the VIX Index. An elevated level for the VIX Index along with an intermediate correction in equity markets has become a regular feature in recent years between mid-June and mid-October. History is repeating.

Earnings reports this week are sparse: 11 S&P 500 companies are scheduled to report. Focuses are on Nike, Monsanto and Constellation Brands

The seasonal peak for the S&P 500 Index passed on June 15^th and the TSX Composite Index passed on June 4^th.

Usual mild strength in North American equity markets during the first two weeks in July in anticipation of second quarter corporate results is expected to be muted at best this year. Consensus for second quarter results on a year-over-year basis by S&P 500 companies shows a 5.2% decline in earnings and a 0.8% slip in revenues. Consensus for earnings by Dow Jones Industrial Average companies is slightly better: Average (median) gain on a year-over-year basis is an increase of 2.1%.

According to FactSet, prospects improve in the second half of 2016. Consensus shows year-over-year earnings gains by S&P 500 companies of 1.2% in the third quarter and 7.5% in the fourth quarter. Sales are expected to increase 2.3% in the third quarter and5.1% in the fourth quarter.

Technical scores for most equity markets, commodities and sectors plunged on Friday in response to Brexit. The exceptions were precious metals and precious metal equities. Most of the drops were recorded by entities that fell below their 20 day moving average and changed their short term momentum indicators to down from up.

Intermediate term technical indicators on North American equity markets (e.g. Percent trading above their 50 day moving average, Bullish Percent Index) are trending down and have yet to show signs of bottoming. Some no longer are intermediate overbought.

Short term technical indicators (Stochastics, RSI, MACD) for most equity markets, commodities and sectors are trending down, but have yet to show signs of bottoming.

International events in addition to Brexit are a focus this week. Spain has a national election that could determine the future of the country within the European Monetary Union. The Euro, Yen and British Pound recorded extreme volatility on Friday and will take time to stabilize. On Friday The British Pound plunged through a 30 year support level near 138.

Historically, the Dow Jones Industrial Average on average has reached a seasonal peak in mid-June in Presidential election years following a two term President. U.S. equity markets subsequently move lower until near Election Day. History is repeating.

Equity indices and related ETFs

Daily Seasonal/Technical Equity Trends for June 24^th 2016

Green: Increase from previous day

Red: Decrease from previous day

Calculating Technical Scores

Technical scores are 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.

The S&P 500 Index dropped 33.98 points (1.64%) last week. Intermediate trend remains up. The Index dropped below its 20 day moving average on Friday. Short term momentum indicators turned down on Friday.

The S&P 500 Index dropped 33.93 points (1.64%) last week with the entire drop occurring on Friday. Intermediate trend remains up. The Index dropped below its 20 day moving average on Friday. Short term momentum indicators turned down on Friday.

Percent of S&P 500 stocks trading above their 50 day moving average (Also known as the S&P 500 Momentum Barometer) plunged last week to 39.00 from 53.00. Percent resumed a short term downtrend on Friday. Percent has entered oversold territory, but has yet to show signs of bottoming.

Percent of S&P 500 stocks trading above their 200 day moving average dropped last week to 62.20 from 69.40. Percent resumed a short term downtrend, but remains intermediate overbought.

Bullish Percent Index for S&P 500 stocks dropped last week to 60.00% from 67.00% and remained below its 20 day moving average. The Index resumed a short term downtrend, but remains intermediate overbought.

Bullish Percent Index for TSX Composite stocks slipped last week to 73.95% from 74.79% and remained below its 20 day moving average. The Index remains intermediate overbought and trending down.

The TSX Composite Index slipped 9.89 points (0.07%) last week. Intermediate trend remains up (Score: 2). Strength relative to the S&P 500 Index turned positive on Friday (Score: 2). The Index dropped below its 20 day moving average on Friday (Score: -1). Short term momentum indicators are trending down (Score: -1).Technical score improved last week to +2 from -2.

Percent of TSX stocks trading above their 50 day moving average (Also known as the TSX Momentum Barometer) plunged last week to 50.00% from 58.01%. Percent has dropped to neutral and is trending down.

Percent of TSX stocks trading above their 200 day moving average slipped last week to 71.55% from 72.29%. Percent remains intermediate overbought and trending down.

The Dow Jones Industrial Average dropped 275.17 points (1.56%) last week. Intermediate trend remains neutral. Strength relative to the S&P 500 Index turned positive last week. The Average dropped below its 20 day moving average on Friday. Short term momentum indicators turned down on Friday. Technical score improved last week to 0 from -2.

Bullish Percent Index for Dow Jones Industrial Average stocks plunged last week to 70.00% from 80.00% 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 51.22% from 53.18% and remained below its 20 day moving average. The Index remains intermediate overbought and trending down.

The NASDAQ Composite Index dropped 92.36 points (1.92%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained negative. The Index remained below its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at -2.

The Russell 2000 Index dropped 17.16 points (1.50%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to neutral from positive. The Index remained below its 20 day moving average. Short term momentum indicators are trending down. Technical score slipped last week to 0 from 2.

The Dow Jones Transportation Average fell 269.14 points (3.55%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remained negative. The Average remained below its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at -6.

The Australia All Ordinaries Composite Index dropped 55.50 points (1.06%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained negative. The Index remained below its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at -2

The Nikkei Average plunged 646.64 points (4.15%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index remained negative. The Average remained below its 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at -6.

Europe iShares plunged $2.66 (6.90%) last week. Intermediate trend remains down. Strength relative to the S&P 500 Index returned to negative on Friday. Units remained below their 20 day moving average. Short term momentum indicators are trending down. Technical score dropped last week to -6.

The Shanghai Composite Index dropped 30.81 points (1.07%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains neutral. The Index fell below its 20 day moving average on Friday. Short term momentum indicators are trending down. Technical score slipped last week to 0 from 3

Emerging markets iShares dropped $0.62 (1.86%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index improved to positive from neutral. Units fell below their 20 day moving average on Friday. Short term momentum indicators are trending down. Technical score improved last week to 2 from 0.

Currencies

The U.S. Dollar gained 1.34 (1.42%) last week with all of the gain recorded on Friday. Intermediate trend changed to up from down on Friday on a move above 95.90. The Index remained above its 20 day moving average. Short term momentum indicators are trending up.

The Euro dropped 1.69 (1.50%) last week. Intermediate trend changed to down on Friday on a move below 111.08. The Euro dropped below its 20 day moving average. Short term momentum indicators are trending down.

The Canadian Dollar dropped US 0.61cents (0.79%) last week with the entire drop happening on Friday. Intermediate trend remains up. The Canuck Buck dropped below its 20 day moving average Short term momentum indicators are trending down.

The Japanese Yen gained 1.70 (1.77%) last week. Intermediate trend remains up. The Yen remains above its 20 day moving average. Short term momentum indicators are mixed.

Commodities

Daily Seasonal/Technical Commodities Trends for June 24^th 2016

Green: Increase from previous day

Red: Decrease from previous day

The CRB Index dropped 3.69 points (1.92%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained positive. The Index dropped below its 20 day moving average on Friday. Short term momentum indicators are trending down. Technical score slipped last week to 2 from 4.

Gasoline added $0.01 per gallon (0.66%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained negative. Gas remained below its 20 day moving average. Short term momentum indicators are trending down. Score remained at -2

Crude oil dropped $0.92 per barrel (1.89%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained neutral. Crude dropped below its 20 day moving average on Friday. Short term momentum indicators are trending down. Technical score for the week was unchanged at 0.

Natural gas gained $0.07 per MBtu (2.67%)) last week thanks to higher than average temperatures in North America. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. “Natty” remains above its 20 day moving average. Short term momentum indicators turned down on Friday. Technical score slipped to 4 from 6

The S&P Energy Index slipped 3.10 points (0.62%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index changed to positive from neutral. The Index dropped below its 20 day moving average on Friday. Short term momentum indicators have turned down. Technical score remained last week at 2.

The Philadelphia Oil Services Index dropped 2.77 points (1.63%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index improved to positive from neutral. The Index dropped below its 20 day moving average on Friday. Short term momentum indicators have turned down. Technical score remained last week at 2.

Gold gained $27.60 per ounce (2.13%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. Gold remained above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

Silver gained $0.43 per ounce (2.47%) last week. Intermediate uptrend was confirmed on Friday on a breakout above $18.06 per ounce. Strength relative to the S&P 500 Index remains positive. Silver remained above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

The Gold Bug Index added 10.77 points (4.74%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. The Index remained above its 20 day moving average. Short term momentum indicators are trending up. Technical score remained last week at 6.

Platinum added $22.00 per ounce (2.28%) last week. Trend remains neutral. Relative strength turned positive. PLAT moved above its 20 day MA. Momentum turned positive.

Palladium gained $16.80 per ounce (3.17%) last week. Trend remains neutral. Relative strength turned positive. PALL remained below its 20 day MA. Momentum turned up.

Copper gained $0.065 per lb. (3.17%) last week. Trend changed to neutral from down on a move above $2.1450. Strength relative to the S&P 500 Index turned to positive from neutral. Copper moved above its 20 day moving average. Short term momentum indicators turned down on Friday. Technical score last week improved to 2 from -2.

The TSX Metals & Mining Index lost 10.50 points (1.86%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remains positive. The Index remained above its 20 day moving average. Short term momentum indicators have turned down. Technical score slipped to 4 from 6.

Lumber dipped $2.50 (0.84%) last week. Intermediate trend remains up. Relative strength improved to neutral. Lumber remained below its 20 day MA. Momentum turned down.

The Grain ETN dropped $3.29 (9.02%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index turned negative. Units fell below their 20 day moving average. Short term momentum indicators are trending down. Technical score dropped to -2 from 6

The Agriculture ETF dropped $1.12 (2.31%) last week. Intermediate trend remains up. Strength relative to the S&P 500 Index remained neutral. Unit remained below their 20 day moving average. Short term momentum indicators are trending down. Technical score remained last week at 0.

Interest Rates

Yield on 10 year Treasuries dropped another 3.9 basis points (2.41%) last week. Yield remains in an intermediate downtrend. Yield remains below its 20 day moving average. Short term momentum indicators are trending down.

Conversely, price of the long term Treasury ETF added $0.17 (0.13%) last week. Intermediate trend remains up. Units remain above their 20 day moving average.

Volatility

The VIX Index jumped 5.62 (29.33%) last week with the entire gain recorded on Friday following the Brexit vote. Intermediate trend has turned up. The Index remains above its 20, 50 and 200 day moving averages.

Sectors

Daily Seasonal/Technical Sector Trends for March June 24^th 2016

Green: Increase from previous day

Red: Decrease from previous day

StockTwits Released on Friday @EquityClock

S&P 500 Index set to fail at resistance above 2,100 again.

Technical action by S&P 500 stocks at 10:15:Bearish. 23 S&P 500 stocks broke support including 3 Dow Jones Industrial stocks: $DIS, $NKE, $JPM

Nike $NKE (A DJIA stock) broke support at $52.77 extending intermediate downtrend

Disney $DIS (A DJIA stock) broke support at $96.70 extending intermediate downtrend

JP Morgan $JPM (A DJIA stock) broke support at $60.59 establishing an intermediate downtrend.

Consumer Discretionary SPDRs $XLY broke support at $76.37 completing a head & shoulders pattern.

‘Tis the season for weakness in Consumer Discretionary sector $XLY until October.

S&P Consumer Discretionary stocks dominated list of breakdowns: $DIS, #MHK, $FOX, $HAS, $NKE, $SBUX, $SNI

Loblaw $L.CA broke support at Cdn $68.03 establishing intermediate downtrend

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 are examples:

Editor’s Note: The following stocks are part of the S&P Consumer Discretionary Index that broke support levels on Friday and currently are in a period of seasonal weakness. Appropriate action is supported

WALL STREET RAW RADIO WITH MARK LEIBOVIT WITH SPECIAL GUESTS SINCLAIR NOE AND HENRY WEINGARTEN – JUNE 25, 2016

http://tinyurl.com/zoaghuw

Disclaimer: Seasonality and technical ratings 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