Pre-opening Comments for Thursday October 13th
U.S. equity index futures were higher at 7:30 AM EDT. S&P 500 futures were up 22 points in pre-opening trade.
Traders were waiting for the September Consumer Price Report at 8:30 AM EDT. Consensus is an increase of 0.2% versus a gain of 0.1% in August. On a year-over-year basis, consensus is an increase of 8.1% versus a gain of 8.3% in August. Excluding food and energy, consensus is an increase of 0.5% versus a gain of 0.5% in August. On a year-over-year basis, consensus for core CPI is an increase of 6.5% versus a gain of 6.3% in August.
Applied Materials dropped $1.01 to 75.00 after the company reduced its outlook due to new restrictions to sell its services in China.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/10/clip_image0011-5.png "clip_image001[1]")
Victoria’s Secret added $1.00 to 33.50 after the company offered favourable guidance for third quarter results.
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/10/clip_image0021-5.png "clip_image002[1]")
Delta Airlines added $1.34 to $30.55 after reporting higher than consensus third quarter results.
EquityClock’s Daily Comment
Headline reads “Producer prices are curling back higher following a summer of declines, keeping inflationary pressures in the economy stubbornly intact”.
http://www.equityclock.com/2022/10/12/stock-market-outlook-for-october-13-2022/
Technical Notes for yesterday
Cameco $CCO.TO $CCJ moved below intermediate support at Cdn.$33.53 and US$24.66 after announcing a joint venture with Brookfield Renewable Partners in a deal valued at $7.88 billion. In order to finance the deal, Cameco sold shares at below previous market prices. Result is short term pain (dilution) for long term gain (growth).
Global X Uranium ETF $URA, an fund heavily weighted in Cameco broke intermediate support at U.S. $18.83 setting an intermediate downtrend.
Match $MTCH a NASDAQ 100 stock moved below $45.99 extending an intermediate downtrend.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for October 12th 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for October 12th 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for October 12th 2021
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
Link from Mark Bunting and www.uncommonsenseinvestor.com
Loss of Capital vs. Permanent Loss of Capital – Uncommon Sense Investor
Larry Williams says “Down, then Up, up and away, finally”)
Up, Up & Away | Larry Williams Special Presentation (10.12.22) – YouTube
Greg Schnell asks “Metals on the move”?
https://www.youtube.com/watch?v=xvpM6rAS8f4
S&P 500 Momentum Barometers
The intermediate term Barometer slipped another 1.00 to 10.80 yesterday. It remains Oversold.
The long term Barometer eased 0.20 to 16.40 yesterday. It remains Oversold.
TSX Momentum Barometers
The intermediate term Barometer added 2.54 to 26.69 yesterday. It remains Oversold.
The long term Barometer added 2.12 to 23.73 yesterday. It remains Oversold.
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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October 13th, 2022 at 11:36 am
Hi Sharon and Larry,
Whreeas for support most of them are a few $ above their support. so price could move lower around their support. some have better support than others.
Cdn Banks dividends are safe and pay a nice dividend 4.5% or more dividend at the moment
Last time we had dividends as tempting was in ’09 and we are talking in the 8-10% at the time some analysts were talking about dividend cut we never seen it we also seen a boost in it not long after.
If there is one sector to bet on its the financials. you borrow from them, and your money is always safe. so even if price should drops lower you can buy more and wait for it to come back.
October 13th, 2022 at 11:43 am
I think a lot of shorts are covering now on this intra-day reversal.
October 13th, 2022 at 12:38 pm
How is a 4.5% dividend tempting when inflation is 8%? We need to see inflation peak and be on the downtrend. If you are not getting a 10% div you are not getting paid. The best investment is debt repayment before any debt renews at higher rates. At BMO preferential margin interest is now 6.25% and will probably hit 7% at the next BOC rate decision on Oct 26th. Mortgages renewal rates for five year fixed are over 5% now and will probably peak next year at 6.25-6.5 which is my guess. If you have no debt and don’t know what to do with your cash that is another issue. Then you need dividend growers or some hope of capital appreciation. If you can accept some risk on energy prices there are companies out there paying 10% dividends in the form of combined regular and special dividends.
October 13th, 2022 at 3:44 pm
Massive key day reversal. IMO odds are we have seen the bottom but there is going to be a lot of sideways chop going forward.
October 13th, 2022 at 5:37 pm
Larry
Do you think inflation will stay at 8% for a long time? heres what I’ve found on inflation
the 10s inflation was 110% don’t have the # for the snp
the 20s inflation was -16% No value for snp the decade
the 30s inflation was -16% snp -50%
the 40s inflation was 72% snp +90%
the 50s inflation was 23% snp +284%
the 60s inflation was 31% snp +61%
the 70s inflation was 112% snp +60%
the 80s inflation was 59% snp +230%
the 90s inflation was 32% snp +400%
the 00S inflation was 27% snp -10%
the 10s inflation was 19% snp +300%
So even if i do purchase a cdn bank stock with a dividend at 5% it will end up rising and so will its value.
My banks stock i purchased in the 09 crisis were paying me 10% and they raised it if you compare the chart of xfn vs xle xfn increased 131% sinc 2010 and xle 31% hummm !!!! let me think? would i rather be in something stable or something that fluctuates on weather, or an increase in output.
snp up 200 %
and the Q up 533% so
so the Q is my favorite place to park my money but at times you must know were to invest
October 13th, 2022 at 5:39 pm
Larry,
lets not forget next week options expire so yes we will see some retesting the these lows
October 13th, 2022 at 5:56 pm
Re: $SPX
Here is a weekly chart showing a bounce off the 200 week moving average (not ema). I don’t know if it will hold. There is a lower support going back to 2020, around the 3270 level. This chart is courtesy of Chris Ciovacco. https://www.ccmmarketmodel.com/short-takes/cpi-next-week
https://schrts.co/GyyNWrPY
October 13th, 2022 at 6:51 pm
Larry
Given we have not seen inflation complete the roll over and go into a steady decline combined with central banks still raising rates, unlikely this is the bottom for the market. There are a lot of different targets out there, but thinking it’s somewhere between 2,800 and 3,200 on the S&P, 16,800 TSX. Until then selling the rallies and buying the drops. Once we get closer, then will start to accumulate the banks TD, BNS and RY are going to be my picks for a longer term hold.
October 13th, 2022 at 7:00 pm
Larry/ON,
Re your comment “How is a 4.5% dividend tempting when inflation is 8%”
Pardon my interjection here but it makes little sense to compare a current dividend yield to an inflation rate? First off dividends are in dollars. The yield is the current forward annual $ dividend divided by the current $ price. It is expressed in %. The yield is affected majorly by the change in price (ie; in constant flux) and minorly by the change in annual $ dividend (its typically upped once annually).
If you want to compare apples to apples here it would be more pertinent to compare the % dividend growth rate (DGR or annual calendar growth % of the $ dividend to the % inflation rate. The Canadian Dividend All-Star List is a listing of all Canadian dividend paying stocks which have increased their dividends for at least 5 consecutive calendar years. The list is updated monthly. It currently has 92 members. The list shows CDASL stocks increased their annual $ dividend by an average of 11.4%. The range of average annual increases varied between 9.2% in 2021 to 15.7% in 2018. The collective dividend growth of the group clearly outpaced the 10 year average inflation rate of 1.69% (range 0.72% in 2020 to 3.40% in 2021. The numbers for this year’s average dividend growth isn’t in yet but I think it will still equal or exceed this year’s average inflation rate currently at 7% per August stats. Its been creeping down since June’s 8.1%.
October 13th, 2022 at 7:09 pm
tony,
Re: #5
I was wondering where you came up with those inflation percentages. Are they decade totals of 10 individual annual inflation rates? Here are the annual inflation numbers for years 1914 thru 2020.
October 14th, 2022 at 2:48 am
Hello Bernie,
Longtime no see.
Re#5 Tony’s post. I think you got it right what he says. One have to be decade old TTM member to read the way Tony writes % thing 🙂
Either he is summing them up for whole decade or just missing a decimal point on inflation #’s. Results is same. 2010s might be 1.9% average/Yr for inflation what he meant.
Later
October 14th, 2022 at 4:07 am
Re: My #10: I forgot to include this link
https://inflationcalculator.ca/historical-rates-canada/
October 14th, 2022 at 4:22 am
Hi Kam,
Yeah I haven’t posted anything in quite a while. I’ve become a lazy retired long term hold dividend growth investor, just sitting and reaping my growing income lol. I don’t monitor this site all that much either because I don’t really need to be concerned with the size of my capital. Haven’t seen you either. Have you posted recently?