Tech Talk for Monday August 8th 2022

The Bottom Line

Most broadly base equity indices around the world recorded small gains or losses last week Exceptions were the NASDAQ Composite Index (up 2.15%) and the Nikkei Average (up 1.35%). Major influences were higher than consensus quarterly results (positive) and growing inflation expectations (negative)

Earnings and Revenue Outlook for S&P 500 companies

Consensus earnings and revenue estimates for S&P 500 companies on a year-over-year basis in the second quarter of 2022 increased significantly again last week. Results have been reported by 87% of S&P 500 companies to date. According to www.FactSet.com consensus for second quarter earnings on a year-over-year basis calls for an increase of 6.7% (versus 6.0% last week) and consensus for revenues calls for an increase of 13.6% (versus 12.3% last week).

Consensus earnings estimates for S&P 500 companies beyond the second quarter on a year-over-year basis dropped significantly again last week. According to www.FactSet.com earnings in the third quarter are expected to increase 5.8% (versus 6.7% last week) and revenues are expected to increase 9.1% (versus 9.4% last week). Earnings in the fourth quarter are expected to increase 6.1% (versus 6.7% last week) and revenues are expected to increase 6.7% (versus 6.9% last week). Earnings on a year-over-year basis for all of 2022 are expected to increase 8.9% and revenues are expected to increase 11.0% (versus 10.7% last week).

Economic News This Week

July U.S. Consumer Price Index released at 8:30 AM EDT on Wednesday is expected to increase 0.2% versus a gain of 1.3% in June. On a year-over-year basis July CPI is expected to increase 8.9% versus 9.1% in June. Excluding food and energy, July Consumer Price Index is expected to increase 0.5% versus a gain of 0.7% in June. On a year-over-year basis July CPI is expected to increase 6.1% versus 5.9% in June.

July U.S. Producer Price Index released at 8:30 AM EDT on Thursday is expected to increase 0.2% versus a gain of 1.1% in June. On a year-over-year basis, July PPI is expected to increase 10.4% versus a gain of 11.3% in June. Excluding food and energy, July PPI is expected to increase 0.4% versus an increase of 0.4% in June. On a year-over-year basis, July PPI is expected to increase 7.6% versus a gain of 8.2% in June.

August Michigan Consumer Sentiment released at 10:00 AM EDT on Friday is expected to increase to 52.3 from 51.5 in July.

Selected Earnings News This Week

Another 23 S&P 500 companies (including one Dow Jones Industrial Average company: Disney) are scheduled to release quarterly results this week. Another eight TSX 60 companies are scheduled to release results.

Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for August 5th 2022

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for August 5th 2022

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for August 5th 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

Greg Schnell says “These charts say it’s not over”.

These Charts Say It’s Not Over | The Canadian Technician | StockCharts.com

Mark Leibovit’s discusses “Bear market rally, U.S. recession and inflation

Bear Market Rally, US Recession, Inflation – HoweStreet

Michael Campbell’s Money Talks for August 6th

August 6 Episode (mikesmoneytalks.ca)

Sprott says “Signs of capitulation everywhere”.

Sprott Monthly Report: Signs of Capitulation Everywhere

Erin Swenlin discusses “Climbing the wall of worry’

Climbing the Wall of Worry | DecisionPoint | StockCharts.com

Bruce Fraser says “A Wyckoff cause is forming. What’s next”?

A Wyckoff Cause is Forming. What’s Next? | Wyckoff Power Charting | StockCharts.com

Mary Ellen McGonagle says “Growth stocks continue to gain. Will their strength continue”?

Growth Stocks Continue To Gain — Will Their Strength Continue? | The MEM Edge | StockCharts.com

John Hopkins discusses “When cash is king”.

When Cash is King | Top Advisors Corner | StockCharts.com

Links from Mark Bunting and www.uncommonsenseinvestor.com

"People Have FOMO and Freak Out Low" – Uncommon Sense Investor

When Will the Fed Stop Hiking Rates? – Uncommon Sense Investor

These Three Large Caps Are Attractive for Long-Term Investors – Uncommon Sense Investor

10 Dividend Growth Stocks Delivering Impressive Increases | Kiplinger

Stock Market Outlook: Rebound Looks More Like New Bull Than Bear Rally (businessinsider.com)

Victor Adair’s Weekly Trading Notes for August 6th

Trading Desk Notes for August 6, 2022 – The Trading Desk Notes by Victor Adair

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 for Friday

Russell 2000 iShares $IWM moved above $190.44 extending an intermediate uptrend.

Morgan Stanley $MS an S&P 100 stock moved above $86.00 extending an intermediate uptrend.

TC Energy $TRP a TSX 60 stock moved below $63.05 extending an intermediate downtrend.

Gasoline prices in the U.S. virtually collapsed late last week.

S&P 500 Momentum Barometers

The intermediate term Barometer added 0.60 on Friday and dropped 4.00 last week to 73.00. It remains Overbought and showing early signs of peaking

The long term Barometer added 1.20 on Friday and 0.20 last week to 37.00. It remains Oversold. Trend remains up.

TSX Momentum Barometers

The intermediate term Barometer slipped 2.52 on Friday and dropped 5.88 last week to 55.46. It changed from Overbought to Neutral on a drop below 60.00.


The long term Barometer added 0.42 on Friday but slipped 0.85 last week to 36.97. It remains Oversold.

Disclaimer: Seasonality ratings 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

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