Pre-opening Comments for Wednesday July 6th
U.S. equity index futures were lower this morning. S&P 500 future slipped 10 points in pre-opening trade.
Focus today is on FOMC meeting minutes to be released at 2:00 PM EDT. More information on the Federal Reserve’s plan to increase the Fed Fund Rate is expected.
Resolute Forest Products gained $8.04 to US$20.53 after Domtar offered to purchase the company for $20.50 per share. Value of the offer is estimated at $2.7 billion.
![clip_image001[3]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/07/clip_image0013.png "clip_image001[3]")
Altria added $0.89 to $42.61 after the FDA temporarily suspended its ban on Juul e-cigarettes.
![clip_image002[3]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/07/clip_image0023.png "clip_image002[3]")
EquityClock’s Daily Comment
Headline reads “Dollar strength roiling commodity bulls, but it is providing welcome relief to the depressed growth trade that typically flourishes at this time of the year”. Following is a link:
http://www.equityclock.com/2022/07/05/stock-market-outlook-for-july-6-2022/
Technical Notes yesterday
U.S. Dollar Index ETN $UUP moved above $28.21 extending an intermediate uptrend.
The Canadian Dollar moved below US76.47 cents on U.S. Dollar strength extending an intermediate downtrend.
The Euro dropped below 103.50 to a 19 year low on U.S. Dollar strength extending an intermediate downtrend.
Encouraging technical action by the NASDAQ 100 Index and related ETFs! $QQQ $ZQQ.TO $XQQTO moved above their 20 day moving average and are close to completing an intermediate bottoming pattern. A move by QQQ above $296.58 will complete the pattern.
International equity markets and their related Exchange Traded Funds responded to the U.S. Dollar Index breakout. ETFs moving below intermediate support extending a downtrend included EFA, IEV, ZEM.TO, EWA, TUR, VNM and ECH.
Energy equities and related ETFs are responded to weakness in crude oil prices. A break by USO below $78.49 has triggered intermediate breakdowns by OIH, FCG, ZEO.TO, XLE, COP, IMO.TO, CVX, SLB, HAL and PD.TO.
Auto stocks and related ETFs remain under pressure due to a shortage of computer chips. Ford moved below $10.90 and General Motors moved below $30.65 extending an intermediate downtrend.
Moderna $MRNA a NASDAQ 100 stock moved above intermediate resistance at $152.73.
Biotech ETF $BBH moved above $151.62 completing a double bottom pattern.
Restaurant Brands International $QSR.TO a TSX 60 stock moved above intermediate resistance at Cdn$66.32.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for July 5th 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for July 5th 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for July 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
Tom Bowley asks “Secular or Cyclical Bear Market”?
Secular or Cyclical Bear Market? | Tom Bowley | Trading Places (07.05.22) – YouTube
Dave Keller talks about trend lines.
Best Practices for Trendlines | David Keller, CMT | The Final Bar (04.12.22) – YouTube
S&P 500 Momentum Barometers
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/07/clip_image0011-2.png "clip_image001[1]")
The intermediate term Barometer slipped 1.60 to 22.60 yesterday. It remains Oversold.
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/07/clip_image0021-1.png "clip_image002[1]")
The long term Barometer dropped 3.40 to 22.40 yesterday. It remains Oversold.
TSX Momentum Barometers
![clip_image003[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/07/clip_image0031-2.png "clip_image003[1]")
The intermediate term Barometer added 1.67 to 19.67 yesterday. It remains Oversold. Trend is up.
![clip_image004[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/07/clip_image0041.png "clip_image004[1]")
The long term Barometer dropped 3.77 to 23.01 yesterday. It remains Oversold. Trend is down.
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.
|
|
July 6th, 2022 at 9:37 am
Paula & Ron/BC, re: XBI
I saw your comments yesterday. Just a few points to add. The daily chart also completed an Inverse Head & Shoulders pattern (actually double head & shoulders). In addition, and even more encouraging, the price closed above the top of the Keltner Channel line for the first time in eight months. Keltner Channel breakouts can be used to identify a trend reversal. Note also the MACD (50,200,10) curve has crossed above the signal line. The downtrend looks to be over. That does not mean an uptrend has begun. Price could also just move sideways, but the risk reward is positive. A pullback to the breakout line of the H&S pattern (ie. $77.50) is likely.
https://schrts.co/dfrwzPfn
July 6th, 2022 at 1:29 pm
FishFat
Re:#1
Good points. Note today price tried to spike through 82 resistance (likely due to buy stops) and failed to hold. Often see this. So this needs to “clear and hold” to confirm a long position. If price can hold at the short uptrendline and price support at 77.50 that would be bullish. My biggest concern is the broad market is in a bear market and most surprise moves will be to the downside. Just like a few warm sunny days in winter doesn’t make it summer time.
https://stockcharts.com/h-sc/ui?s=XBI&p=D&yr=1&mn=0&dy=0&id=p56301590706&a=1135770489
July 6th, 2022 at 1:43 pm
The Canadian dollar relative to the U.S.$ continues to breakdown to new lows………..
https://stockcharts.com/h-sc/ui?s=%24CDW%3A%24USD&p=D&yr=2&mn=0&dy=0&id=p59259098070&a=673066368
July 6th, 2022 at 3:36 pm
FishFat
Here is a 6 month chart of XBI which shows the price action clearer. Big battle here at 81-82 price resistance. A pullback to 77.50 would be ideal buy point with a stop loss below that uptrendline. If price was in a bull market the decisions would be much easier. Just look at the carnage in the broad market…………………….
https://stockcharts.com/h-sc/ui?s=XBI&p=D&yr=0&mn=6&dy=0&id=p67080224590&a=1135770489
July 6th, 2022 at 3:48 pm
Ron/BC
I agree, this strong bear market makes it difficult to swim against the tide.
I like your 6-month chart. I will add that short up-trendline to my plot.