Pre-opening Comments for Wednesday June 26th
U.S. equity index futures were lower this morning. S&P 500 futures were down 6 points at 8:30 AM EDT.
Rivian jumped $6.49 to $18.45 after Volkswagen announced a joint venture where Volkswagen committed up to a $5 billion investment.
![clip_image001[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/06/clip_image0011-9.png "clip_image001[1]")
FedEx advanced $38.36 to $295.00 after the company announced higher than consensus fiscal fourth quarter results. The company also announced plans to spin off one of its operations.
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/06/clip_image0021-10.png "clip_image002[1]")
Worthington Enterprises dropped $4.97 to $45.19 after reporting lower than consensus fiscal fourth quarter revenues.
![clip_image003[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/06/clip_image0031-8.png "clip_image003[1]")
Southwest Airlines dropped $1.24 to $27.27 after the company lowered its second quarter revenue estimate.
![clip_image004[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/06/clip_image0041-7.png "clip_image004[1]")
EquityClock’s stock market outlook for June 26th
Biotechnology breaking out as its period of seasonal strength gets underway.
See: https://equityclock.com/2024/06/25/stock-market-outlook-for-june-26-2024/
Technical Notes
Lithium ETN $LIT moved below $39.26 to a 44 month low extending an intermediate downtrend.
Soybean ETN moved below $23.79 to a 30 month low extending an intermediate downtrend.
eBay $EBAY moved above $54.87 extending an intermediate uptrend.
Analog Devices $ADI a NASDAQ 100 stock moved below $226.75 completing a double top pattern.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for June 25th 2024
Green: Increase from previous day
Red: Decrease from previous day
Source for all positive seasonality ratings: www.EquityClock.com
Commodities
Daily Seasonal/Technical Commodities Trends for June 25th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for June 25th 2024
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
Nvidia Plunges Over 6% to Mark the End of the AI Trade? David Keller
https://www.youtube.com/watch?v=ehldtD7fc80
Strange Things Happening in the Stock Market: Guy Adami and Dan Nathan
Strange Things Happening in the Stock Market – YouTube
Chart of the Day:
Australia All Ordinaries Index
Technical score increased yesterday from (+2-2-1-1=) -2 to (+2-2+1+1=) +2 when the Index moved above its 20 day moving average and daily momentum (Stochastics, RSI, MACD) changed from down to up.
Seasonal influences are positive from June 26th to August 31st. Average gain per period during the past 20 periods is 2.5%.
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 8.80 to 51.20. It changed back from Overbought to Neutral on a drop below 60.00.
The long term Barometer dropped 1.60 to 70.20. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer dropped 4.05 to 37.48. It changed back from Neutral to Oversold on a drop below 40.00.
The long term Barometer dropped 4.95 to 62.16. It remains Overbought.
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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June 26th, 2024 at 12:05 pm
Ron
While the US financial have been performing better than CAD, looks like they both have hit the wall short term. Given the summer setup, I am going to wager for CAD banks to break down in Q3 mostly on BMO, CM, BNS and TD. While the graph looks to have 5-10% downside, if we don’t hold those levels then 25-30% are real potential outcomes. Do any of these banks catch your eye for grater potential downside?
Thanks
June 26th, 2024 at 4:02 pm
Watching the Barometer Capital Management webcast yesterday David Burrows made the point that the first two weeks of July tend to be one of the strongest periods for equity markets. They are cautiously optimistic of a continuation upward rather than any kind of breakdown as market breadth as somewhat widened.
Bman/Van – The lead article in the Globe investing section is BofA’s caution on Canadian banks. Why buy Canadian banks in a weaker economy when you can buy US banks in a stronger economy with JPM being the go to name?
“We continue to see US large-cap banks (GSIBs) offering a better risk/reward relative to their Canadian peers. While relative P/E valuation looks discounted (9.4x CAD vs. 10.6x US), we see higher interest rates as posing a structural headwind to the growth outlook for the Canadian banks. On the other hand, the competitive positioning of the largest US banks has arguably improved relative to pre-pandemic years, which should allow them to better capitalize on potential growth opportunities …”
June 26th, 2024 at 4:14 pm
Hi Larry
The ask earlier was who has the greater downside for financials. I believe we are getting ready for a correction / downdraft in the market for the next 2-3 months based on what the technicals are flashing (and supporting graphs). Given the weak performance of industrials, financials and cyclicals and the expected weaker economic news focusing on the financials for a short/put option strategy which would potentially go long with shares/calls if we see a good washout. While the US financials look enticing, I am more inclined to trade the CAD banks as it gives me the choice of CAD or USD currency (so I can control the currency risk), are less well known in the US (so more likely to be a miss calculation) and have oligopolistic tendencies in CAD which will keep those profits higher than if there is a recession in either country. I may consider a JP Morgan or Goldman if the washout is particularly bad (P/E between countries negates), but its not a likely outcome at this point.
Thanks
June 26th, 2024 at 4:16 pm
On another notes, have not been very impressed with David Burrows in the past. He talks a good game but does not back it up in performance or past picks on BNN so I tend to discount more what he is saying than other investment managers.
June 26th, 2024 at 6:39 pm
re #4:
Bman/Van, I feel the same way about Burrows. Bernie/Leth