Pre-opening Comments for Friday August 19th 2022
U.S. equity index futures were lower this morning. S&P 500 futures were down 42 points in pre-opening trade.
Applied Materials $AMAT gained $0.30 to $108.57 after reporting higher than consensus third quarter results.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/08/clip_image0011-11.png "clip_image001[1]")
Home Depot added $3.29 to $328.50 after the company authorized a $15 billion share buyback program.
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/08/clip_image0021-13.png "clip_image002[1]")
Deere dropped $19.99 to $348.00 after reporting less than consensus fiscal third quarter earnings.
![clip_image003[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/08/clip_image0031-10.png "clip_image003[1]")
Foot Locker advanced $6.41 to $38.39 after reporting higher than consensus second quarter revenues and earnings.
![clip_image004[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/08/clip_image0041-10.png "clip_image004[1]")
EquityClock’s Daily Comment
Headline reads “Inventory injection season for Natural Gas has been much weaker than average, which keeps a tailwind behind the price of the commodity into the high demand winter heating season”. Following is a link:
http://www.equityclock.com/2022/08/18/stock-market-outlook-for-august-19-2022/
Wolf on Bay Street
Don Vialoux is a guest on this week’s radio show. Tune in to Corus 640 at 7:00 PM EDT on Saturday.
Technical Notes for yesterday
Energy SPDRs $XLE moved above $78.66 resuming an intermediate uptrend.
U.S. Insurance iShares $IAK moved above $88.90 extending an intermediate uptrend.
MetLife $MET an S&P 100 stock moved above $67.99 extending an intermediate uptrend.
Wheat ETN $WEAT moved below $7.81 extending an intermediate downtrend.
Baidu $BIDU a NASDAQ 100 stock moved below 128.50 setting an intermediate downtrend.
Pembina Pipeline $PPL.TO a TSX 60 stock moved above $49.06 extending an intermediate uptrend.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for August 18th 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for August 18th 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for August 18th 2021
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
Lawrence McMillan opinion: “Now that the S&P 500 is looking overbought, watch what happens to this downtrend line that defines the bear market”.
Mark Hulbert opinion: “Proceed with caution if you trade stocks based on this popular market signal”.
David Hunter talks about “S&P 500 Upside Target 6000”
https://www.youtube.com/watch?v=r4y-LEX-gus
S&P 500 Momentum Barometers
The intermediate term Barometer added 0.40 to 92.00 yesterday. It remains Overbought.
The long term Barometer added 1.40 to 49.80 yesterday. It remains Neutral. Trend remains up.
TSX Momentum Barometers
The intermediate term Barometer added 5.04 to 73.53 yesterday. It remains Overbought. Trend remains up.
The long term Barometer was unchanged at 46.22 yesterday. It remains Neutral.
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 19th, 2022 at 1:29 pm
Energy – The Aug 17 US oil inventory report showed a huge 7 million barrel drawdown at the same time as US crude exports hit the highest on record at 5 million per day. The head of OPEC at the same time has poured cold water on the idea of boosting production. It’s a tight market.
https://www.reuters.com/business/energy/oil-prices-recover-6-month-lows-after-drop-us-stockpiles-2022-08-17/
August 19th, 2022 at 3:00 pm
Here is the $SPX Daily chart with the DIA and $COMP overlaid. The $SPX broke out above 4177 resistance and typically ran up to the downtrendline and became very overbought with all indicators. Price is now pulling back and odds favour price testing the breakout point of 4177 on this pullback. If the market is going to remain healthy from the June low run up this price point needs to hold up as support. A successful test of 4177 with a rebound back up again could possibly see price breakout above that downtrendline the next time up but would still be a major challenge to do so. A failure to clear the downtrendline on another run up would form an “M” pattern and suggest a much bigger decline with price breaking below 4177. Big test now for the broad market.
https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=2&mn=0&dy=0&id=p74576979725&a=939923011
August 19th, 2022 at 4:50 pm
Ron/BC,
The USD rebounded, as you thought it would, from close to its 50EMA. Now the question is will it make a double top or just carry on “to the moon”.
https://schrts.co/xeKePWct
August 19th, 2022 at 6:40 pm
Paula
There isn’t much wrong with the U.S.$ chart and it continues to have higher highs and higher lows. I’m not home at my computer now so am just looking at my cell phone chart.But nothing ever goes to the moon. It just “feels that way” sometimes, lol.
August 19th, 2022 at 8:02 pm
Paula
Here is a much longer chart of the $USD to assess. Note price just broke out above its 7 year channel. There was a 16 point range in those 7 years and oddly enough from that breakout point to the 2001 price high that is also 16 points. SOOOOOOOOOOOOOOOOOOOO, typically what occurs after that is price will run up 16 points to that resistance level. The 103 level does have to hold as support if cleared but could be tested at least once while above it.
https://stockcharts.com/h-sc/ui?s=%24USD&p=W&st=1980-01-04&id=p59161196705&a=1158185444
https://stockcharts.com/freecharts/seasonality.php?symbol=%24USD
August 20th, 2022 at 5:40 pm
Ron/BC,
Re the USD. Thanks as usual for the longer term perspective on it. Forget about trading. Just holding US cash seems to be a good investment! LOL!
August 20th, 2022 at 6:37 pm
Paula
Yes,it does doesn’t it.Just like buying a condo & moving in and renovating. Then selling after a reasonable time there. (Not sure what reasonable is exactly though) and I’m afraid to ask,lol. But at $50K to $100K each
time it is worth the effort. Not now so much as I think we’ve seen the top once again.Reminds me of 1981. So you just stay in the last one longer. Not such a bad fate.
August 21st, 2022 at 1:15 am
Paula
Oaken Financial is paying 4.15% now on a 1yr GIC. All those GIC rates should jump up next month with the U.S.Federal Reserve most likely to raise rates again and sharply. I’d like to dump some cash on another GIC and next month “should” see a nice increase. Just wish it could be tax free.
August 21st, 2022 at 5:33 pm
Ron/BC,
I liked your Tangerine 4.5 % 1yr GIC that you talked about recently. Agree that higher rates may be available after next FED and BOC rate hikes.
I had a couple of comments a few days ago that I don’t know if you saw.
Re #6. August 17.
I wrote XGD off some time back but, based on your excellent chart, it seems to deserve consideration. When I compare the stocks in XGD with GDX, there is a higher weighting in NEM and ABX and other “large” cap companies in XGD. I think I have done this comparison before and it led me to consider NEM, which would have the most influence on XGD at an almost 19% weighting. The dividend yield is almost 5% if you happen to own it when it goes x-dividend (probably not worth that being an important consideration). I’m sure we have had this discussion before b/c I have an old NEM chart of yours. Look at that drop:
https://schrts.co/CrYFXXip
Re $WTIC,
I read a report by Bob Yawger, a sometime guest on BNN. He pointed out that if $WTIC falls below this level being tested $87, there is no support until $62.43 So I looked at a chart and drew the line. It bounced today but still facing lots of resistance:
https://testresearch6.td.com/tdwca/Public/Stocks/News/ca/CPG
“Crude Oil, Yawger noted, was down 2.89% versus 86.83 as of 11:39 am, and traded to a new six month low of 86.69 in the past few minutes [the note came in about 1.30pm ET]. He said” “As I mentioned in the past few afternoon reports, Crude Oil is staring at the abyss here, with no obvious support level until the 62.43 previous wave low from December 2.” He noted crude Oil had already traded below all moving averages and the retracements. The market extended the downward spiral today after the European Union declared that Iran’s response to the blueprint for reviving the 2015 deal was constructive. The prospect of new Iranian barrels hitting the global market, comes just as Saudi Aramco announced plans to increase production, and EIA Crude Oil storage hits the highest levels since December. The Iranian barrels also threaten to hit the market just as the Chinese economy shows significant demand destruction from the country’s Zero Covid policy. Yawger noted WTI Crude Oil RSI was 35.96, implying there is still room to roam to the downside before the market trades to RSI oversold levels below 30.0.”
https://schrts.co/rUYZtzjc
August 21st, 2022 at 7:34 pm
Paula
Here is a chart of NEM with XGD.to and GDX overlaid. Also note the Seasonality chart for it as well. September is the worst month for Gold stocks “historically”. I don’t know what to think of Crude as I don’t spend much time on it. Too much political interference with it.
https://stockcharts.com/h-sc/ui?s=NEM&p=D&yr=3&mn=0&dy=0&id=p54837456668&a=673066208
https://stockcharts.com/freecharts/seasonality.php?symbol=NEM
August 21st, 2022 at 11:27 pm
Paula
I don’t know what Yawger was so concerned about with the 62.43 price point. $85 Would be more important in the shorter term. Then if that was broken the $62 “area” would be the next major support. Far too many factors that affect Crude for my liking.
https://stockcharts.com/h-sc/ui?s=%24WTIC&p=D&yr=2&mn=0&dy=0&id=p87857161102&a=673066442
August 21st, 2022 at 11:51 pm
Paula
I should have also mentioned that EQ Bank is paying 4.40% on a one year GIC. Not bad but I think all the financial firms will hike rates over the next month. I’ve dealt with EQ Bank in the past and had no trouble.
August 22nd, 2022 at 12:39 am
Paula
Notice the German chancellor arrived in Canada for energy discussions with Canada. Who knows what that may lead to for Canada’s energy business. Too many variables to draw any firm conclusions. Only thing I know is the chart is close to 85 support and if and when a breakdown occurs then you could see a sharp selloff towards that $62 area of support.