Tech Talk for Monday June 13th 2022

The Bottom Line

A “hotter” than expected U.S. May Consumer Price Index report on Friday triggered a wave of selling in equity markets. Investors became increasingly concerned about action that the Federal Reserve will take at its meetings on June 14^th/15^th. More news on inflation is scheduled to be released on Tuesday morning when the U.S. May Producer Price Index is announced. Traders are waiting for news from the Fed at 2:00 PM EDT on Wednesday. Consensus calls for an increase in the Fed Fund rate by 0.75%.

Observations

Consensus earnings estimates for S&P 500 companies on a year-over-year basis in the second quarter of 2022 were virtually unchanged last week.. According to www.FactSet.com first quarter earnings on a year-over-year basis increased 4.0% and revenues increased 9.9% (up from 9.7% last week).

Consensus earnings and revenue estimates for S&P 500 companies beyond the second quarter on a year-over-year basis increased slightly last week. According to www.FactSet.com earnings in the third quarter are expected to increase 10.6% (versus 10.3% last week) and revenues are expected to increase 9.4% (versus 9.3% last week). Earnings in the fourth quarter are expected to increase 10.1% (versus 9.9% last week) and revenues are expected to increase 7.2% (versus 7.1% last week). Earnings on a year-over-year basis for all of 2022 are expected to increase 10.4% (versus 10.2% last week) and revenues are expected to increase 10.5% (versus 10.3% last week).

Volatility spiked following release on the May CPI report on Friday.

Economic News This Week

Focus this week is news from the FOMC meeting on Wednesday

May Producer Price Index to be released at 8:30 AM EDT on Tuesday is expected to increase 0.8% versus a gain of 0.5% in April. On a year-over-year basis, May Producer Price Index is expected to increase 10.9% versus a gain of 11.0% in April. Excluding food and energy, May Producer Price Index is expected to increase 0.6% versus a gain of 0.4% in April. On a year-over-year basis excluding food and energy, May Producer Price Index is expected to increase 8.6% versus a gain of 8.8% in April.

May Retail Sales to be released at 8:30 AM EDT on Wednesday are expected to increase 0.2% versus a gain of 0.9% in April. Excluding auto sales, May Retail Sales are expected to increase 0.8% versus a gain of 0.6%.

June Empire State Manufacturing Survey to be released at8:30 AM EDT on Wednesday is expected to be +4.50 versus a drop of 11.60 in May.

April Business Inventories to be released at 10:00 AM EDT on Wednesday are expected to increase 1.2% versus a gain of 2.0% in March.

FOMC statement on monetary policy is to be released at 2:00 PM EDT on Wednesday Consensus is that that Fed Fund Rate will increase another 0.50% and purchase of debt instruments valued at $90 billion per month will start. Conference call is offered at 2:30 PM.

June Philly Fed Index to be released at 8:30 AM EDT on Thursday is expected to increase to 5.3 from 2.6 in May.

May Housing Starts to be released at 8:30 AM EDT on Thursday are expected to decrease to 1.700 million units from 1.724 million units in April.

Federal Reserve Chairman is scheduled to speak at 8:45 AM EDT

U.S. May Capacity Utilization to be released at 9:15 AM EDT on Friday is expected to increase to 79.2% from 79.0% in April. May Industrial Production is expected to increase 0.4% versus a gain of 1.1% in April.

Earnings News This Week

Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for June 10^th 2022

Green: Increase from previous day

Red: Decrease from previous day

Commodities

Daily Seasonal/Technical Commodities Trends for June 10^th 2022

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for June 10^th 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

Mark Leibovit asks “Is the Fed helping or hurting”?

Is The Fed Helping Or Hurting? – HoweStreet

Tom Browley has “Five growth stocks that have bottomed”.

https://www.youtube.com/watch?v=T-zxjsxVdF4

Martin Pring’s Market Roundup: For StockChart.com members only.

This Sector Bucked Last Friday’s Decline and Could Be Ready to Take Off | Martin Pring’s Market Roundup | StockCharts.com

Editor’s Note: An interesting update on gold and gold stocks

Ed Steer asks “What the heck happened in Silver and Gold on Friday”?

What the Heck Happened in Silver & Gold on Friday? – HoweStreet

David Keller discusses “One chart to rule them all”.

One Chart to Rule Them All | The Mindful Investor | StockCharts.com

Greg Schnell asks “Is this commodity a larger signal”?

https://stockcharts.com/articles/canada/2022/06/is-this-commodity-a-larger-sig-335.html

Editor’s Note: Comment is a focus on the forest product sector.

Michael Campbell’s Money Talks for June11th

June 11th Episode (mikesmoneytalks.ca)

Victor Adair’s Trading Notes for June 11^th

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

Technical Scoop for June 13^th

https://enrichedinvesting.com/wp-content/uploads/2022/06/Inflation-storm-FOMC-hike-confidence-tank-capitulation-opportunity-detached-gold-green-need-good-jobs.pdf

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

Gold ETN $GLD moved above $174.41 setting an intermediate uptrend.

Healthcare SPDRs $XLV moved below $125.28 setting an intermediate downtrend.

Healthcare Providers iShares $IHF moved below $250.78 extending an intermediate downtrend.

U.S. Real Estate iShares $IYR moved below $92.56 extending an intermediate downtrend.

Timber & Forestry iShares $WOOD moved below $81.27 extending an intermediate downtrend.

Dow Jones Industrial Average stocks breaking support on Friday:

Goldman Sachs $GS moved below $292.11 extending an intermediate downtrend.

Johnson & Johnson $JNJ moved below $171.59 setting an intermediate downtrend.

MMM $MMM moved below $138.34 extending an intermediate downtrend.

Disney $DIS moved below $99.47 extending an intermediate downtrend.

S&P 100 stocks breaking support on Friday:

Berkshire Hathaway $BRK.B moved below $298.11 extending an intermediate downtrend.

CVS Health $CVS moved below $91.47 extending an intermediate downtrend.

Texas Instruments $TXN moved below $158.91 extending an intermediate downtrend.

Wells Fargo $WFC moved below $40.74 extending an intermediate downtrend.

American International Group $AIG moved below $53.83 extending an intermediate downtrend.

Dow Holdings $DOW moved below $64.61 extending an intermediate downtrend.

Duke Energy $DUK stock moved below $106.51 completing a double top pattern.

NASDAQ 100 stocks breaking support on Friday:

Illumina $ILMN moved below $208.35 extending an intermediate downtrend.

Intuit Surgical $ISRG moved below $206.00 extending an intermediate downtrend.

Cognizant $CTSH moved below $69.35 extending an intermediate downtrend.

Micron $MU moved below $65.86 extending an intermediate downtrend.

Verisk Analytic $VRSK moved below $164.96 extending an intermediate downtrend.

CSX $CSX moved below $30.20 extending an intermediate downtrend.

DocuSign $DOCU moved below $64.84 extending an intermediate downtrend.

TSX 60 stocks breaking support on Friday:

Bausch Health $BHC moved below $10.12 extending an intermediate downtrend.

SNC Lavalin $SNC moved below $23.62 extending an intermediate downtrend.

Waste Connections $WCN moved below $155.89 extending an intermediate downtrend.

S&P 500 Momentum Barometers

The intermediate term Barometer plunged 12.02 to 12.22 on Friday and 25.05 last week. It remained Oversold. Trend is down. Short term technical signs of a bottom have yet to appear.

The long term Barometer slipped 3.81 on Friday and 8.82 last week to 25.65. It remains Oversold. Trend is down. Short term technical signs of a bottom have yet to appear.

TSX Momentum Barometers

The intermediate term Barometer slipped 3.18 on Friday and 7.80 last week to 29.09. It remains Oversold.

The long term Barometer added 1.36 on Friday and slipped 2.71 last week to 37.73. It changed last week from Neutral to Oversold on a drop below 40.00.

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.