Pre-opening Comments for Friday July 19th
U.S. equity index futures were mixed this morning. S&P 500 futures were unchanged at 8:30 AM EDT.
Microsoft dropped $5.97 to $434.40 and Crowdstrike fell $34.75 to $308.20 after a failed systems update by Crowdstrike caused a global outage of Microsystem’s IT services.
![clip_image001[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/07/clip_image0011-7.png "clip_image001[1]")
![clip_image002[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/07/clip_image0021-7.png "clip_image002[1]")
Netflix added $2.96 to $646.00 after reporting higher than consensus second quarter earnings.
![clip_image003[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/07/clip_image0031-6.png "clip_image003[1]")
Intuitive Surgical jumped $27.89 to $444.03 after reporting higher than consensus second quarter revenues and earnings.
![clip_image004[1]](http://www.timingthemarket.ca/techtalk/wp-content/uploads/2024/07/clip_image0041-6.png "clip_image004[1]")
EquityClock’s Stock Market Outlook for July 19th
The jump in the VIX over the past couple of sessions suggests that the period of volatility for stocks has arrived. See:
https://equityclock.com/2024/07/18/stock-market-outlook-for-july-19-2024/
Technical Notes
MMM $MMM a Dow Jones Industrial Average stock moved above $105.31 extending an intermediate uptrend
Simon Properties $SPG an S&P 100 stock moved above $155.77 to an all-time high extending an intermediate uptrend.
Base Metals ETN $DBB (equally weighted in copper, zinc and aluminum).moved below $19.68 completing a Head & Shoulders pattern. Related equities completed double top patterns including Alcoa on move below US$36.79, Hudbay Minerals on a moved below Cdn$11.51, Southern Copper on a move below US103.85 and Teck Corp on a move below Cdn$63.50.
Uranium ETF $URA moved below $28.54 completing a double top pattern.
Abbott Labs $ABT an S&P 100 stock moved below $100.12 extending an intermediate downtrend.
Copart $CPRT a NASDAQ 100 stock moved below $51.74 extending an intermediate downtrend.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for July 18th 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 July 18th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for July 17th 2024
Green: Increase from previous day
Red: Decrease from previous day
Links Offered by Valued Providers
S&P 500 Poised To Tumble? Tom Bowley
S&P 500 Poised To Tumble? – YouTube
Be ready for market volatility come August: market strategist
Be ready for market volatility come August: market strategist – YouTube
Chip Wreck: The End of the Red Hot Semi Trade?
https://www.youtube.com/watch?v=iYunV1DNN3U
Technical Chart of the Day: Copper ETN
TOTAL SCORE -2 to –6
Seasonal influences are neutral until August 8th
S&P Momentum Barometers
The intermediate term Barometer dropped 5.80 to 70.40. It remains Overbought.
The long term Barometer dropped 3.80 to 76.80. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer dropped 3.98 to 76.11. It remains Overbought.
The long term Barometer added 0.44 to 82.30. It remains Overbought. Daily uptrend was extended.
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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July 19th, 2024 at 12:35 pm
TD.to is very,very overbought AND at price resistance of $80. Nice round number. Looks like a good short but can be hard to do after a strong run up. If I owned it I’d sell it for now……………..wish I had bought it at the buy signal at $73.
https://stockcharts.com/h-sc/ui?s=TD.TO&p=D&yr=2&mn=0&dy=0&id=p45274277993&a=1725113757
July 19th, 2024 at 12:40 pm
Hi Ron
I hear you, with TD I think I will wait for a pullback before looking to go long given the many variables. In the meantime, shorting BNS, BMO and CM given their overbought conditions and it looks like we are finally having a sustained pullback in the market. My rule of thumb has been for the market 3 in a row marks the start of a new trend. While this trend may only last for the next 60-75 days given how powerful the summer rally was, the reversal could be that and more.
July 19th, 2024 at 12:42 pm
Between the weak retail sales and copper weakness, I think we are looking at sustained softness the market will be hard pressed to overlook until we get into the fall.
July 19th, 2024 at 12:58 pm
I’ve been under the understanding that I could not post hourly or minute charts. I haven’t tried for many years so here is one. They used to show up as Daily.
https://stockcharts.com/h-sc/ui?s=XGD.TO&p=60&yr=0&mn=3&dy=0&id=p71706743639&a=673066266
https://stockcharts.com/h-sc/ui?s=XGD.TO&p=15&yr=0&mn=1&dy=0&id=p96814777946&a=673066229
July 19th, 2024 at 1:07 pm
BMan/Van
Here is the XIU.to plus the ratio of that to SPY. The XIU.to has been under performing the SPY for a long time now.
https://stockcharts.com/h-sc/ui?s=XIU.TO&p=D&yr=10&mn=0&dy=0&id=p47774518132&a=673066267
Looks like I can post hourly and intraday charts of Stockcharts. Re:#4 post.
(Wish I had the guts to short TD.to,lol……………..
July 19th, 2024 at 1:41 pm
Here is a 5 minute chart of TD.to over 3 months in length.
https://stockcharts.com/h-sc/ui?s=TD.TO&p=5&yr=0&mn=3&dy=0&id=p09297205858&a=1731334787
July 19th, 2024 at 2:10 pm
#4 & #6
Looks like those intraday charts didn’t stay intraday………….went back to Daily charts….
July 19th, 2024 at 3:53 pm
Ron/BC,
Re your comments #4 and 5 yesterday: I find it interesting to hear how “deep pocket” traders, who we presume know what they are doing in shorting a stock, can carry a losing trade and dig themselves deeper into a loss because they are so sure they are right. This is not any different than a retail trader adding to a losing long position.
Thanks for the weekly TD chart with the RSI 6 and RSI 4. You are right – that seems to make a difference but how do you decide which is the correct number to use?
I guess I don’t really want to hear this b/c it means I will have to change all my charts LOL!
July 19th, 2024 at 6:27 pm
Paula
The deep pocket traders pick stocks that have a history and odds of the stock going to the moon are slim to none. EX:bank stocks for example work well but not some hot tech stock. I used to short stocks long ago and didn’t pick stocks that had that type of high potential. One can also buy put options. Not as much to lose but if your timing isn’t great options can turn to zero too.
As far as Weekly charts go switching to say the RSI 6 will only give signals that are typical of the DAilies using RSI 8. Just put the RSI 6 on a bunch of Weekly stocks and see when the RSI 6 tops out and rolls over the 70 line and see if it lines up with a vertical line through it. Perhaps even the RSI 5 would work well. But let the charts tell you which is the best RSI to use. Nothing wrong with having both RSI’s on a chart so switching from Weekly back to Daily you wouldn’t have to change a thing.
July 19th, 2024 at 6:41 pm
Paula
Here is your chart again with the RSI 8, RSI 6 and RSI 5 above. You can see the value of all 3 and the higher the number the fewer signals you get. So that acts as a filter for your trades. I don’t like to miss anything and like all 3 but especially the RSI 6 and RSI 5 on WEEKLY CHARTS ONLY. The RSI 4 not shown is too fast and will give too many signals unless you are very quick to take signals and exit quickly as well. But put other stock symbols on the chart and see what they have to say……………
https://stockcharts.com/h-sc/ui?s=TD.TO&p=W&yr=3&mn=0&dy=0&id=p89130858904&a=1730764432
July 19th, 2024 at 8:52 pm
Ron/BC
Thanks for the chart with the RSI options. I will check it out.
July 19th, 2024 at 10:35 pm
Ron
Second Paula’s comments, I had always just used the pre-canned RSI, never contemplated changing the value around to get a closer look at what it was suggesting so very helpful.
July 19th, 2024 at 10:39 pm
Paula
Try putting on some different stock symbols on that chart and see what they are saying.
July 19th, 2024 at 10:47 pm
Bman/Van
Every stock has its own momentum level.An RSI Chart with different settings is good at picking off price highs and lows “MOST” of the time,allowing for some discretion.
July 20th, 2024 at 12:15 am
Bman/Van
Years ago I used to trade a lot most days. But then everyone I knew that traded used 5 minute charts and technical charts. Some used one minute charts and many were just known as snipers. That just seemed to be the way to trade. It can get exhausting after awhile though but at least you were never in a trade that long. Now some people think we are all supposed to be long term investors and marry stocks we love………….Not supposed to love any of them.
July 20th, 2024 at 11:54 am
Paula
I can’t figure out why you use WEEKLY CHARTS to consider trading with………unless you are a long term investor with tome stocks.
July 20th, 2024 at 12:06 pm
Ron
For sure never married to a stock. I believe given the current times, they are all buy and hold for a period of time before selling and moving onwards or vise versa. Great example is the CAD banks, if you had held then the last 10 year almost no return in most except the dividends. However, if you had traded them at some of the highs and lows, wow mega profits (windfall tax), which the government is now going to tax even more, arg!
July 21st, 2024 at 12:42 am
Paula
Re:#8
You use whatever RSI numbers signal price highs and lows. Doesn’t matter which one. So if you get the best buy and sell signals (above 30 and below 70) with the RSI 8 or RSI 6 or RSI 5 then that is the best RSI to use. Looking at a bunch of signals on a two year chart or even a 1 year chart will show you which RSI number to use for the best signals. Shouldn’t have to change it often unless changing from Daily to Weekly. If you wish to trade more frequently then drop the RSI down to 4 which will often give many more signals that may be short lived but profitable. I like to see a strong cross over for a signal either way so don’t use the RSI 4. And I generally trade Daily charts rather than Weekly charts. But when I see the RSI 8 “almost”cross over and see that was a price low but not a clear signal that’s when I’ll change it to RSI 6 as the stock is not showing strong momentum. It’s best to mark 2 or 3 RSI’s of different numbers on a chart and then change the stock symbol a few times to see which RSI captures the buy and sell signals the best.
As far as those deep pocket traders go there were plenty of them that got blown away by adding to their losing positions. The broker often had to freeze their account until they brought in more funds. But most of the time they made money as they didn’t get scared out of their positions.
July 21st, 2024 at 12:45 am
By the way it seems Windows 10 is being discontinued. So I’ve had to order a new laptop and transfer all the data over to the new laptop and perhaps even a new desktop in Windows 11 before I lose all my data on it. Don’t know what everyone else is going to do about this????????
July 21st, 2024 at 11:39 am
Re: 19. Ron/BC
After using W. for 30 years I’m considering buying Mac. I’m furious with MSFT (like they care) LOL.
July 21st, 2024 at 2:04 pm
DM/ON
I get it. I lose it when the computer doesn’t do what I expect it to do. Always some b.s. story to explain it all away……..I get my new laptop tomorrow and perhaps desk top if needed so we’ll see how that pans out. I’m not confident as I know I will lose a ton of stuff I want to keep.
July 21st, 2024 at 3:05 pm
Ron/BC,
Re your #16. Yes, I am a long-term investor with a handful of stocks. I have talked about this before and yes, TD.TO is one of them. I have Canadian stocks in a non-registered account that yield tax benefited dividend income. Occasionally, I trade these stocks but I have found that it is not that worthwhile to trade them and I have done better holding them. Of course, this can change.
Generally, I use my USD account for shorter term trading but even there, I like to zoom out on the weekly to get the bigger picture. This is recommended by Elder in his Trading for a Living.
Re your #18. Thanks for this explanation on using RSI.
I tried looking up what StockCharts has to say. Here is the link:
https://chartschool.stockcharts.com/table-of-contents/technical-indicators-and-overlays/technical-indicators/relative-strength-index-rsi#using_rsi_in_sharpcharts
Note that RSI “can provide useful insights in non-trending or sideways market conditions.” There is a lot of information in this article including a section on “What are the Best RSI Parameters?”
I am paraphrasing here: The default RSI is 14 but that can be lowered to increase sensitivity or raised to decrease sensitivity. The look-back parameters depend on a security’s volatility. The overbought and oversold levels can also be adjusted.
The Relative Strength Index (RSI) was developed by Welles Wilder, who also developed the Average True Range (ATR), the Average Directional Indec (ADX) and the Parabolilc SAR (PSAR). I believe each of these indicators have their own usefulness. I have written before about the ADX and continue to put it on every chart. I don’t change the default parameters. I also refer to the PSAR and I believe the ATR is useful for determining a stop loss level.
StockCharts does an excellent job explaining each of these indicators. I believe anyone can access them even without a subscription but correct me if I am wrong about that.
July 21st, 2024 at 3:27 pm
Bman/Van,
Re your #12, thanks for seconding my comments.
Note that the pre-canned RSI is 14 but using Ron/BC’s 8 level has been useful for me. So, I just put that on all my charts, even the weekly ones.
Re your #17. I agree on never getting married to a stock. But, there are times to hold, as in long term uptrends. Here is a 20 year chart of TD.TO. I left off all indicators, just showing the 20, 50 and 200 exponential moving averages and the relative to the XIU.TO. Note that holding since the GFC was a ten-bagger and holding for the last 10 years was at least a double. Except for the GFC and the pandemic panic, the price held the 50EMA. This is even when it has been underperforming relative to the XIU.TO since early 2022. Note also that the 200EMA has been rising the whole time. Even if a person sold when the price went below the 50EMA and bought back in when it went back above the 50EMA, a person would have done very well. Sometimes if is best to ignore the short-term noise.
https://schrts.co/TamGwvWp
July 21st, 2024 at 6:39 pm
Paula
Thanks for the info. I’ve bought numerous trading books over the last 30 years and made notes on them to the point I have a pile of notes to view. I’ve since got rid of almost all of them as there is theory and there is reality as you must have found out by now and again the hard way. My initial trading training was with 5 minute charts and technicals such as Stochastics, MACD and moving averages. They work and many trade for a living using these indicators. Various trading courses teach these indicators along with a few others to trade worth and all will work. Depends on a trader’s mindset and nature more than anything. I try to keep it simple with few indicators and just get in and then get out with my pockets full,lol. Doesn’t always work but I never ride a stock down. Guess that’s from intra day trading lessons learned long ago and not being afraid to take a loss and admit I was wrong short term. I’ve experience a few recessions and watched big traders get butchered with their stock portfolios. Rather than hold long term stocks I’ve found I prefer to just buy a 1 year GIC at say 5%-6% as that is a guaranteed win to offset anything foolish I might get myself into. I have one coming due in August at 5.95% so will have to decide what to do with the cash. Not sure yet. Tomorrow I get new computers so who knows what I may be able to do or not due next. I’m no computer geek so am worried about it.