Tech Talk for Monday January 10th 2022

by Don Vialoux, EquityClock.com

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The Bottom Line

Comments by the Federal Reserve dominated action by North American equity markets last week. Comments in FOMC meeting minutes implied that the Federal Reserve is willing to temper monetary stimulus sooner than Wall Street expected. The yield on 10 year Treasuries moved above 1.765% to a two year high.

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Observations

Intermediate term technical indicator for U.S. equity markets (Percent of S&P 500 stocks trading above their 50 day moving average) moved lower last week. It remained Overbought. Trend has turned down. See Momentum Barometer chart at the end of this report.

Long term technical indicator for U.S. equity markets (Percent of S&P 500 stocks trading above their 200 day moving average) moved lower last week. It remained Overbought. Trend has turned down. See Momentum Barometer chart at the end of this report.

Intermediate term technical indicator for Canadian equity markets remained Neutral last week. . See Momentum Barometer chart at the end of this report.

Long term technical indicator for Canadian equity markets (Percent of TSX stocks trading above their 200 day moving average) changed from Overbought to Neutral last week. See Momentum Barometer chart at the end of this report.

Consensus estimates for earnings and revenues for 2021 by S&P 500 companies moved slightly higher from our last report on December 20th. According to www.FactSet.com earnings in the fourth quarter are projected to increase 21.7% (versus previous 21.3%) and revenues are projected to increase 12.9% (versus previous 12.8%). Earnings for all of 2021 are projected to increase 45.2% (versus previous 45.1) and revenues are projected to increase 15.9% (versus previous15.8%).

Consensus estimates for earnings and revenues for 2022 by S&P 500 companies also increased slightly. Consensus earnings on a year-over-year basis for the first quarter are projected to increase 6.3% (versus previous 6.2%) and revenues are expected to increase 9.7% (versus previous 9.5%) Earnings in the second quarter are expected to increase 4.2% (versus previous 4.1%) and revenues are expected to increase 7.6% (versus previous 7.5%). Consensus earnings in 2022 by S&P 500 companies are projected to increase 9.4% (versus previous 9.2%) and revenues are projected to increase 7.6% (versus previous7.5%.

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Economic News This Week

December Consumer Price Index to be released at 8:30 AM EST on Wednesday is expected to increase 0.4% versus a gain of 0.8% in November. Excluding food and energy, the December Consumer Price Index is expected to increase 0.5% versus a gain of 0.5% in November.

December Producer Price Index to be released at 8:30 AM EST on Thursday is expected to increase 0.4% versus a gain of 0.8% in November. Excluding food and energy, the December Producer Price Index increase 0.5% versus a gain of 0.7% in November.

December Retail Sales to be released at 8:30 AM EST on Friday are expected to decline 0.1% versus a gain of 0.3% in November.

December Capacity Utilization to be released at 9:15 AM EST on Friday is expected to increase to 77.0% from 76.8% in November. December Industrial Production is expected to increase 0.3% versus a gain of 0.5% in November.

November Business Inventories to be released at 10:00 AM EST on Friday are expected to increase 1.1% versus a gain of 1.2% in October.

January Michigan Consumer Sentiment to be released at 10:00 AM EST on Friday is expected to slip from 70.6.

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Selected Earnings News This Week

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Traderā€™s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for Jan.7th 2022

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Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for Jan.7th 2022

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Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for Jan.7th 2021

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Green: Increase from previous day

Red: Decrease from previous day

All seasonality ratings are based on performance relative to the S&P 500 Index (except TSX)

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Links offered by Valued Providers

Greg Schnell focuses on ā€œThe Copper Conundrumā€. Following is a link:

Copper Conundrum | ChartWatchers | StockCharts.com

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David Keller from StockCharts notes that ā€œThe S&P 500 tests 50 day moving average (again)ā€.

https://www.youtube.com/watch?t=283&v=D6GueZX7oZ0&feature=youtu.be

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Mark Leibovit discusses ā€œInflation, Cryptos, Crude Oil, Lithium and Uranium.

Inflation, Cryptos, Crude Oil, Lithium, Uranium ā€“ HoweStreet

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Michael Campbellā€™s Money Talks

January 8th Episode (mikesmoneytalks.ca)

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Links from Mark Bunting and www.uncommonsenseinvestor.com

Top Five Dogs of the Dow For This Year ā€“ Uncommon Sense Investor

Best Stock Ideas From Our All-Star Roster ā€“ Uncommon Sense Investor

All 71 Stock Market Panic Attacks Since 2009 Have Been Buying Opportunities ā€“ Uncommon Sense Investor

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Technical Scoop from David Chapman and www.EnrichedInvesting.com

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Seasonality Chart of the Day from www.EquityClock.com

The Steel sector and related ETF (Symbol; SLX) currently is in the middle of its period of seasonal strength from November 27th to February 15th and can last to early May.

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Steel ETF (SLX $55.85) moved above $54.93 last Thursday resuming an intermediate uptrend. The sector is a major beneficiary of the $1.1 trillion U.S. Infrastructure program.

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Technical Scores

Calculated as follows:

Intermediate Uptrend based on at least 20 trading days: Score 2

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Intermediate Neutral trend: Score 0

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Intermediate Downtrend: Score -2

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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 ā€“2

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Above 20 day moving average: Score 1

At 20 day moving average: Score: 0

Below 20 day moving average: ā€“1

Up trending momentum indicators (Daily Stochastics, RSI and MACD): 1

Mixed momentum indicators: 0

Down trending momentum indicators: ā€“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

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Changes Last Week

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Technical Notes released on Friday at

StockTwits.com@EquityClock

While the S&P 500 Equally Weighted Index is not immune to January volatility, a trend of outperformance has become apparent versus its capitalization weighted counterpart as positive seasonal tendencies materialize. equityclock.com/2022/01/06/ā€¦ $SPX $SPY $SPXEW $RSP $EQAL $EQWL $RSPE

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Financials SPDRs $XLF moved above $40.66 extending an intermediate uptrend.

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Bank of America $BAC moved above $48.46 extending an intermediate uptrend

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MetLife $MET an S&P 100 stock moved above $66.64 to an all-time high extending an intermediate uptrend.

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Travelers $TRV a Dow Jones Industrial Average stock moved above $163.00 to an all-time high extending an intermediate uptrend.

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Texas Instruments $TXN moved below $182.43 completing a double top pattern.

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Another tech sector breakdown! Copart $CPRT a NASDAQ 100 stock moved below $138.87 extending an intermediate downtrend.

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Another technology stock breakdown! Xilinx $XLNX moved below $193.10 completing a double top pattern.

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Base metal stocks and related ETFs are moving higher this morning. Rio Tinto $RIO moved above $71.35 extending an intermediate uptrend. Seasonal influences are favourable until at least mid-February and frequently to early May. If a subscriber to EquityClock, see seasonality chart at charts.equityclock.com/rio-ā€¦

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Another major base metals breakout! VALE $VALE moved above $14.23 extending an intermediate uptrend. Seasonal influences are favourable to the end of February and frequently to early May. If a subscriber to EquityClock, see seasonality chart at charts.equityclock.com/vale..

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Philip Morris International $PM an S&P 100 stock moved above $98.39 extending an intermediate uptrend. Seasonal influences are favourable to mid-April. If a subscriber to EquityClock, see seasoanlity chart at charts.equityclock.com/philā€¦

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Johnson & Johnson $JNJ a Dow Jones Industrial Average stock moved above $173.51 extending an intermediate uptrend.

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Wheaton Precious Metals $WPM a TSX 60 stock moved below $38.07 setting an intermediate downtrend.

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Franco-Nevada $FNV a TSX 60 stock moved below US$125.76 extending an intermediate downtrend.

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S&P 500 Momentum Barometers

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The intermediate term Barometer slipped 3.81on Friday and 6.81 last week to 64.13. It remains Overbought and trending down.

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The long term Barometer eased 0.20 on Friday and 2.81 last week. It remains Overbought and trending down.

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TSX Momentum Barometers

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The intermediate term Barometer eased 0.22 on Friday and 5.83 last week. It remains Neutral.

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The long term Barometer added 0.64 on Friday but slipped 1.35 last week to 58.74. It changed from Overbought to Neutral on a move below 60.00.

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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




This post was originally publised at Vialoux's Tech Talk.

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