Tech Talk for Monday November 14th 2022

The Bottom Line

Weakness in the U.S. Dollar Index and its related ETN: UUP last week encouraged strength in a wide variety of equity indices outside of the U.S. and in U.S. sectors that benefit from U.S. Dollar weakness. Notable was strength in the technology and materials sectors.

Consensus for Earnings and Revenues for S&P 500 Companies

Analysts once again lowered estimates for the remainder of 2022. As of Friday, 91% of S&P 500 companies had reported third quarter results. According to www.factset.com third quarter earnings on a year-over-year basis are expected to increase 2.2% and revenues are expected to increase 10.6% (versus an increase of 10.5% last week). Fourth quarter earnings are expected to decrease 1.7% (versus previous decrease of 1.0%) and revenues are expected to increase 4.4%. For 2022 earnings are expected to increase 5.3% (versus previous increase of 5.5%) and revenues are expected to increase 10.4%.

Preliminary estimates for 2023 also moved lower. According to www.factset.com first quarter 2023 earnings are expected to increase 1.7% (versus previous estimate at 2.3%) and revenues are expected to increase 3.8% (versus previous estimate at 3.9%). Second quarter 2023 earnings are expected to increase 1.1% (versus previous estimate at 1.5%) and revenues are expected to increase 1.1% (versus previous estimate at 1.3%). For all of 2023, earnings are expected to increase 5.8% (versus previous estimate at 5.9%)) and revenues are expected to increase 3.3% (versus previous estimate at 3.4%).

Economic News This Week

October Producer Price Index released at 8:30 AM EST on Tuesday is expected to increase 0.5% versus a gain of 0.4% in September. On a year-over-year basis October PPI is expected to increase 8.3% versus 8.5% in September. Excluding food and energy, October Producer Price Index is expected to increase 0.4 % versus a gain of 0.3% in September. On a year-over-year basis, October PPI is expected to increase 7.2% versus a gain of 7.2% in September.

November Empire State Manufacturing Survey released at 8:30 AM EDT on Tuesday is expected to improve to -7.00 from -9.10 in October.

October U.S. Retail Sales released at 8:30 AM EST on Wednesday are expected to increase 0.8% . Excluding auto sales, October Retail Sales are expected to increase 0.4% versus a gain of 0.1% in September.

October Canadian Consumer Price Index released at 8:30 AM EST on Wednesday is expected to increase 0.8% versus a gain of 0.1% in September. On a year-over-year basis, October CPI is expected to increase 7.0% versus a gain of 6.9% in September

October U.S. Capacity Utilization released at 9:15 AM EST on Wednesday is expected to increase to 80.4% from September at 80.3%. October Industrial Production is expected to increase 0.2% versus a gain of 0.4% in September.

September U.S. Business Inventories released at 10:00 AM EST on Wednesday is expected to increase 0.5% versus a gain of 0.8% in August.

October U.S. Housing Starts released at 8:30 AM EST on Thursday are expected to slip to 1.410 million units from 1.439 million units in September.

November Philly Fed Index released at 8:30 AM EST on Thursday is expected to improve to

-8.2 from -8.7 in October.

October Existing Home Sales released at 10:00 AM EST on Friday are expected to slip to 4.40 million units from 4.71 million units in September.

October Leading Economic Indicators released at 10:00 AM EST on Friday are expected to slip 0.4% versus a drop of 0.4% in September.

Selected Earnings News This Week

Another 15 S&P 500 companies (including three Dow Jones Industrial Average companies) are scheduled to report quarterly results this week.

Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for November 11th 2022

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for November 11th 2022

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for November 11th 2021

Green: Increase from previous day

Red: Decrease from previous day

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

The technology heavy NASDAQ Composite Index moved above 11,210.38 and the NASDAQ 100 Index moved above $11,681.85 completing double bottom patterns.

Materials SPDRs $XLB, led by content in the steel, base metals and forest product sectors, moved above $81.41 extending an intermediate uptrend.

Base Metals ETFs and prominent equities in the sector recorded significant breakouts, extending intermediate uptrends. Strength was triggered by a breakout by copper above $3.78 per lb, completing a double bottom pattern. Global base metals iShares $PICK moved above $39.33. BHP moved above $56.93. Rio Tinto moved above $61.25. VALE moved above $15.19.

Steel ETF $SLX moved above $57.57 extending an intermediate uptrend.

Lumber stocks moved higher after forming intermediate bottoming patterns (e.g. $WOOD $CUT). Interfor $IFP.TO moved above Cdn$25.97 competing a reverse Head & Shoulders pattern.

Financial SPDRs $XLF moved above $35.78 extending an intermediate uptrend.

Eurozone iShares $EZU moved above $39.05 extending an intermediate uptrend.

Germany iShares $EWG moved above $24.21 extending an intermediate uptrend.

S&P 100 stock breakouts: Caterpillar moved above $233.56. Capital One moved above $115.86. Target moved above $170.75. UPS moved above $173.18. Berkshire Hathaway moved above $308.15. IBM moved above 141.25 to an all-time high.

NASDAQ 100 stock breakouts: Lulu lemon, Illumina, IDEXX, Microchip Technology CDW Corp., Charter Communications, Activision Blizzard, DocuSign, Zoom, PayPal

Canadian technology ETFs and related stock breakouts: Cdn. Technology iShares $XIT.TO moved above $33.38. Open Text $OTEX a TSX 60 stock moved above $29.98 extending an intermediate uptrend.

Other TSX 60 stocks breaking intermediate resistance included Canopy Growth $WEED.TO on a move above Cdn$5.55 completing a double bottom pattern and Sun Life Financial $SLF.TO on a move above Cdn$61.73

Links offered by valued providers

Michael Campbell’s Money Talks for November 12th

Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)

Greg Schnell notes “Markets continue bullish ascent”.

Markets Continue Bullish Ascent | The Canadian Technician | StockCharts.com

Mark Leibovit discusses “U.S. mid-terms and the markets”.

US Mid-Terms and the Markets – HoweStreet

David Keller discusses “A bullish case for gold”.

The Bullish Case for Gold | The Mindful Investor | StockCharts.com

Mish Schneider says “All indices improved their market phases this week”

All Indices Improved Their Market Phases This Week | Mish’s Market Minute | StockCharts.com

Larry Williams plans a special video at 9:30 AM EST on Tuesday November 15th entitled “The end is near”. Following is a “promo”

https://www.youtube.com/watch?mc_cid=62189a8ada&mc_eid=8f8943347e&v=jNWBMkjBnZU&feature=youtu.be

Links from Mark Bunting and www.uncommonsenseinvestor.com

Five Best Dow Dividend Stocks to Buy Now – Uncommon Sense Investor

Victor Adair’s Trading Notes for November 11th

Trading Desk Notes for November 11, 2022 – The Trading Desk Notes by Victor Adair

S&P 500 Momentum Barometers

The intermediate term Barometer slipped 0.40 on Friday, but gained 24.20 last week. It changed from Neutral to Overbought on a move above 60.00. Trend remains up.

The long term Barometer added 2.00 on Friday and 18.40 to 55.60 last week. It changed from Oversold to Neutral on a move above 40.00. Trend remains up.

TSX Momentum Barometers

The intermediate term Barometer added 2.97 on Friday and 21.19 last week to 77.12. It changed to Overbought on a move above 60.00. Trend remains up.

The long term Barometer added 4.24 on Friday and 16.52 last week to 51.27. It changed from Oversold to Neutral on a move above 40.00. Trend remains up.

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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