by Don Vialoux, EquityClock.com
The Bottom Line
Volatility related to events in Ukraine dominated technical action by world equity markets last week. The VIX Index remained at an elevated level.
Concerns, that geopolitical events will constrain access to commodities, triggered a parabolic move in commodity prices.
Commodity sensitive equity indices, notably Canada, Australia and Brazil recorded significant gains while equity indices and related ETFs impacted directly or indirectly by the Ukraine conflict dropped substantially.
Observations
Consensus earnings estimates for S&P 500 companies on a year-over-year basis in the first quarter of 2022 were increased slightly: 64 companies have issued negative guidance to date and 29 companies have issued positive guidance. According to www.FactSet.com first quarter earnings on a year-over-year basis are expected to increase 4.8% (versus 4.6% last week) and revenues are expected to increase 10.4% (versus 10.2% last week).
Consensus estimates for S&P 500 companies beyond the first quarter on a year-over-year basis increased slightly. According to www.FactSet.com second quarter earnings are expected to increase 4.7% (versus 4.4% last week) and revenues are expected to increase 8.7% (versus 8.6% last week). Earnings on a year-over-year basis for all of 2022 are expected to increase 8.6% (versus 8.5% last week) and revenues are expected to increase 8.4% (versus 8.1% last week).
Economic News This Week
January U.S. Trade Deficit to be released at 8:30 AM EST on Tuesday is expected to increase to $87.00 billion from $80.70 billion from December.
January Canadian Merchandise Trade to be released at 8:30 AM EST on Tuesday is expected to record a surplus of $2.50 billion versus a deficit of $0.14 billion in December.
January Wholesale Inventories to be released at 10:00 AM EST on Tuesday are expected to increase 0.8% versus a gain of 2.2% in December.
U.S. February Consumer Price Index to be released at 8:30 AM EST on Thursday is expected to increase 0.8% versus a gain of 0.6% in January. Excluding food and energy, consensus for February CPI is an increase of 0.5% versus a gain of 0.6% in January.
Canada’s February Employment Report is released at 8:30 AM EST. Consensus for the Unemployment Rate is a drop to 6.2% from 6.5% in January.
March Michigan Consumer Sentiment to be released at 10:00 AM EST on Friday is expected to slip to 61.3 from 62.8 in February.
Selected Earnings News This Week
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for March 4th 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for March 4th 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for March 4th 2021
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)
Links offered by Valued Providers
“Three implication if Commodities Outperform Stocks” by Martin Pring
Three Implications if Commodities Outperform Stocks | ChartWatchers | StockCharts.com
“Silver plays catch up with other commodities” by Arthur Hill
Silver Plays Catchup with the Other Commodities | ChartWatchers | StockCharts.com
“These three charts look ready to go ballistic” by Greg Schnell
These Three Charts Look Ready to Go Ballistic! | ChartWatchers | StockCharts.com
“Technology Sector and Tech Indexes in Official Bear Markets” by Carl & Erin Swenlin
Technology Sector and Tech Indexes in "Official" Bear Markets | ChartWatchers | StockCharts.com
Links offered by Mark Bunting and www.uncommonsenseinvestor.com
Why Learning How to Lose is Key to Winning in the Market – Uncommon Sense Investor
Michael Campbell’s Money Talks for March 5th 2022
March 5th Episode (mikesmoneytalks.ca)
Prospering in a Bear Market by Dave Landry
https://www.youtube.com/watch?v=Z0M0nbcayz4
Principles for Dealing with the Changing World Order by Ray Dalio
https://www.youtube.com/watch?v=xguam0TKMw8
Weekly Technical Scoop from David Chapman and www.EnrichedInvesting.com
Technical Scores
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
Changes Last Week
Technical Notes released on Friday at
Airline ETF $JETS moved below $19.15 extending an intermediate downtrend.
Platinum ETN $PPLT moved above $102.26 extending an intermediate uptrend.
Classic safe-haven sectors continue to attract a bid in this market, which is why they remain on our list of market segments to Accumulate. equityclock.com/2022/03/03/… $XLU $VPU $IDU $DUK $AEE $AEP $SO $XEL $D $ED $PEG $EIX $FTS
Food & Beverage ETF $PBJ moved above $46.02 to an all-time high extending an intermediate uptrend. Seasonal influences are favourable until at least mid-May. If you are a subscriber to EquityClock, see seasonality chart at https://charts.equityclock.com/invesco-dynamic-food-beverage-etf-nysepbj-seasonal-chart
Frontier 100 iShares $FM moved below $33.11 extending an intermediate downtrend.
Exxon Mobil $XOM a Dow Jones Industrial Average stock moved above $82.17 to an all-time high extending an intermediate uptrend.
NextEra Energy $NEE an S&P 100 stock moved above $79.03 completing a double bottom pattern. Seasonal influences are favourable to the end of August. If a subscriber to EquityClock, see seasonality chart at https://charts.equityclock.com/nextera-energy-inc-nysenee-seasonal-chart
Boeing $BA a Dow Jones Industrial Average stock moved below $183.77 extending an intermediate downtrend.
Booking Holdings $BKNG an S&P 100 stock moved below $2,057.31 extending an intermediate downtrend.
Charter Communications $CHTR a NASDAQ 100 stock moved below $549.59 extending an intermediate downtrend.
Another Money Center breakdown! Goldman Sachs $GS a Dow Jones Industrial Average stock moved below $324.32 extending an intermediate downtrend. ETFs in the sector: $KBE and $KRE are notably weaker today.
More U.S .money center bank breakdowns! Capital One Financial $COF an S&P 100 stock moved below $136.00 extending an intermediate downtrend.
Peloton $PTON a NASDAQ 100 stock moved below $22.81 extending an intermediate downtrend.
Barrick Gold $ABX.CA a TSX 60 stock moved above Cdn$30.23 extending an intermediate uptrend.
Precious metal stocks continue to advance. First Majestic Silver $AG moved above US$12.30 completing a reverse Head & Shoulders pattern. Seasonal influences are favourable to the end of July. If a subscriber to EquityClock, see seasonality chart at https://charts.equityclock.com/first-majestic-silver-corp-nyseag-seasonal-chart
Canadian Pacific $CP.CA a TSX 60 stock moved above Cdn$98.75 extending an intermediate uptrend. Seasonal influences are favourable to early June. If a subscriber to EquityClock, see seasonality chart at https://charts.equityclock.com/canadian-pacific-railway-seasonal-chart
Couche Tard $ATD.CA a TSX 60 stock moved below intermediate support at $47.49.and $47.01.
Loblaw Companies $L.CA a TSX 60 stock moved above $98.75 to an all-time high extending an intermediate uptrend.
Another Canadian food stock breakout! Metro $MRU.CA a TSX 60 stock moved above $69.26 to an all-time high extending an intermediate uptrend.
S&P 500 Momentum Barometers
The intermediate term Barometer was unchanged on Friday and slipped 5.61 last week to 35.47. It changed last week from Neutral to Oversold on a move below 40.00.
The long term Barometer slipped 1.80 on Friday and 4.41 last week to 44.89. It remains Neutral.
TSX Momentum Barometers
The intermediate term Barometer added 0.18 on Friday and 2.64 last week to 58.59. It remains Neutral.
The long term Barometer slipped 0.71 to 59.47 on Friday and added 3.52 last week. It remains Neutral .
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.
