Pre-opening Comments for Friday August 12th
U.S. equity index futures were higher this morning. S&P 500 futures were up 21 points in pre-opening trade.
Illumina dropped $44.45 to $182.99 after reporting lower than consensus second quarter earnings. The company also lowered guidance.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/08/clip_image0011-7.png "clip_image001[1]")
Blackrock added $1.95 to $730.60 after Deutsche Bank raised its target price from $720 to $860
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/08/clip_image0021-8.png "clip_image002[1]")
Toast advanced $2.36 to $20.57 after JP Morgan raised its target price from $15 to $21.
![clip_image003[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/08/clip_image0031-6.png "clip_image003[1]")
Tilray was unchanged at $3.85 after MKM Partners lowered its target price from $8 to $5.
![clip_image004[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/08/clip_image0041-5.png "clip_image004[1]")
EquityClock’s Daily Comment
Headline reads “The recent uptick in energy commodity prices from levels of significant support risk re-flaring inflationary concerns in the market”. Following is a link:
http://www.equityclock.com/2022/08/11/stock-market-outlook-for-august-12-2022/
Technical Notes for yesterday
S&P 500 Equal Weight ETF $RSP moved above $149.63 extending an intermediate uptrend.
S&P Mid-cap SPDRs $MDY moved above $467.52 extending an intermediate uptrend.
South Africa iShares $EZA moved above intermediate resistance at $44.93.
Walt Disney $DIS a Dow Jones Industrial Average stock moved above intermediate resistance at $112.85.
Fox $FOX an S&P 100 stock moved above $32.78 and $32.97. $FOXA moved above $35.55 and $35.78 completing reverse Head & Shoulders patterns.
Dupont $DD an S&P 100 stock moved above $61.47 extending an intermediate uptrend.
Capital One Financial $COF an S&P 100 stock moved above $114.29 extending an intermediate uptrend.
US Bancorp $USB an S&P 100 stock moved above $48.50 extending an intermediate uptrend.
Algonquin Power $AQN.TO a TSX 60 stock moved above $18.58 extending an intermediate uptrend.
CAE $CAE.TO a TSX 60 stock moved below $27.27 extending an intermediate downtrend. Six analysts lowered their target price on the stocks after quarterly results were released.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for August 11th 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for August 11th 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for August 11th 2021
Green: Increase from previous day
Red: Decrease from previous day
S&P 500 Momentum Barometers
The intermediate term Barometer added 3.80 to 86.00 yesterday. It remains Overbought. Trend remains up.
The long term Barometer added 0.60 to 42.60 yesterday. It remains Neutral. Trend remains up.
TSX Momentum Barometers
The intermediate term Barometer added 4.20 to 71.43 yesterday. It remains Overbought. Trend remains up.
The long term Barometer added 2.10 to 42.86 yesterday. It remains Neutral. Trend remains up.
Disclaimer: Seasonality ratings and technical ratings offered in this report and at
www.equityclock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed
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August 12th, 2022 at 1:33 pm
What’s going on? The market is supposed to be going down not up. Maybe all that cash is burning a hole in investors’ pockets.
XEG – Just broke above the 50 day MA and pulled back
Eric Nuttall was on BNN today ready to pump you up with promised oil patch gushers.
KBE – Broke above the 200day MA with RSI now 75.
Dow Transports now above the 200day ($DJTTR)
August 12th, 2022 at 2:43 pm
Here is a chart of the $SPX. Good to see price clear resistance at 4177. But there is far more resistance at the major downtrendline just ahead. The recent run up doesn’t mean we are back into a bull market again. I don’t think the indexes could be more overbought with over exuberance. Only good news out there recently has been that inflation was milder than anticipated. Not much to bet your hard earned money on………….And jumping up and down waving your arms around wont make the markets go higher.
https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=3&mn=0&dy=0&id=p65916842220&a=1131926615
August 12th, 2022 at 3:53 pm
Yes SPX is now short-term technically overbought with RSI 71. One scenario would be a retreat from the downtrend resistance line followed by a test of the break above 4177. The market does not necessarily have to fall apart. It could just churn for a while before moving higher. We need further catalysts for a move higher or lower.
August 12th, 2022 at 6:49 pm
All US Market Indexes are now after Friday’s close, just below their respective 200 DMA…will they break out next week? Or experience a reversal? No one knows.
In my Trading experience, after a big Summer Rally, markets tend to be rather diffuse after Labor Day. Usually, I sell of my Trades at the end of August, anytime after the 15th and before Labour Day Week-End.
After Labour day, the big institutional and Mutual Fund Traders are back at their desks from Summer holidays…then we usually see weakness as they clean up their respective books. My thinking here, I can always buy back my trades after Labour Day, when I see which way the Markets are moving….having booked a nice little profit for my Summer efforts. Makes no difference anyway, the yard stick analogy….all I want is a good 2 feet in the middle. Better to be safe than take a chance of losing all of my Summer Profits. As the old corny phrase goes, you never go broke taking a profit.
This time around we have to consider a few things. First Inflation….it will not be tempered by a couple percent Interest rate raises against a 40-year Inflation high of 8.5%….The FED and the BOC do not meet in August; they are on holidays too. BOC meets September the 7th, the Fed 20-21. After Labour Day, inflation and the momentum in rates rises should continue to accelerate. Yes, Inflation numbers for July were a little weaker, but it was a tiny little bit, a rounding error, of no consequence. A 2% rate hike will not temper an 8.5% Inflation number. Anyone that believes that lives in a fantasy world. I lived through the 1970s, I know, inflation is very difficult to conquer….
The other issue is the massive 739 Billion Dollar “Inflation Reduction Act”, a total absurdity as more spending and increased taxation will not temper inflation, it will do the exact opposite, as anyone with a rudimentary knowledge of economics is well aware.
Even at this stage, the Markets are not cheap. If I was a betting man, I would bet the markets will not hold to any break-out, if it happens. As long as rates are rising, the markets will struggle.
https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&b=5&g=0&id=p04245387530
August 13th, 2022 at 10:54 am
Of course, TFSA is business as usual, dividends automatically re-invested as they come in.
Trading is different. I have cash sitting on the sidelines waiting for an opportunity, I don’t see it yet. I want to see one of two things.
1) The markets break out above their respective 200 DMA, retest the 200DMA for support, break above the break out high, that will be a signal that the markets are starting a new Bull Market.
2)The market meet resistance at the 200 DMA, and reverse course, or break-out and fail the retest, either way eventually form a capitulation low.
Either one will announce a new Bull Market. We will see soon what will happen. S&P 500 P&F Charts are showing Bullish Patterns, yet Inflation does not tame so easily, therefore rate increases will continue. Rate increases are a strong headwind for the markets ….contradictory signals. I am not comfortable putting fresh money into this market.
My cash ETFs in July generated 1.69% cash flow; in August, 2.66%…this will keep rising as interest rates rise. In July CASH ETF had the best yield, in August it was CSAV the best performer. All depends how they manage the funds I guess. That’s why I spread my cash across 4 ETFs to see how each one would perform.
August 14th, 2022 at 5:12 pm
Bruce,
Re August 11 #3: Here is a link to the weekly Ciovacco Management commentary. He goes into quite a bit of detail on the AAII chart about 30 minutes into it. This is from the August 5 video.
https://www.ccmmarketmodel.com/short-takes/new-signals-message
August 14th, 2022 at 5:14 pm
Larry,
Re August 11 #12: I don’t think you need to worry about someone discovering your identity and location but thanks for confirming my suspicion that it was you.
I used to be a David Burrows fan and he is one of the few Market Call guests that I will listen to most of the show. He does address the technicals, which I like BUT if you look at the results of the Barometer mutual funds, they are not impressive:
https://barometercapital.ca/mutual-funds_/
August 14th, 2022 at 5:16 pm
Ron/BC
Here is an old chart of yours which I have not updated. I was reminded of bullish percent as an indicator by the Ciovacco video (ccmarketmodel.com) referenced above. Do you still look at it? Seems like there has been a breadth thrust with this indicator going above 77%.
https://schrts.co/jhNpvAFW
August 14th, 2022 at 5:18 pm
Canuck2004,
Thanks for updating us on your investing/trading views. With everyone seeing the resistance line above, the market is likely to confound us and move higher until Labour Day. Like you, I took summer profits, happy to get a chunk out of the middle. But as you say, no one knows what will happen.
Good luck to all.
August 14th, 2022 at 7:19 pm
Paula
I don’t spend much time on the Bullish Percent Index anymore other than to notice it works very well with the RSI 8 Buy Signal cross overs. The overbought at 70 and oversold at 30 line don’t mean much to me………….
https://stockcharts.com/h-sc/ui?s=%24BPSPX&p=D&yr=3&mn=0&dy=0&id=p27324355745&a=1228035054
August 14th, 2022 at 9:02 pm
Ron/BC,
Ok thanks for the updated chart. I see what you mean about the RSI 8 signal cross overs.