Pre-opening Comments for Friday October 14th
U.S. equity index futures were higher this morning. S&P 500 futures were up 5 points in pre-opening trade.
Index futures moved slightly higher following release of September U.S. Retail Sales at 8:30 AM EDT. Consensus was an increase of 0.3% versus a gain of 0.3% in August. Actual was unchanged. Excluding auto sales, consensus was an increase of 0.1% versus a drop of 0.3% in August. Actual was an increase of 0.1%.
UnitedHealth Group gained $6.59 to $516.50 after reporting higher than consensus third quarter revenues and earnings.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/10/clip_image0011-6.png "clip_image001[1]")
JP Morgan gained $2.16 to $111.53 after reporting higher than consensus third quarter revenues and earnings.
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/10/clip_image0021-6.png "clip_image002[1]")
Wells Fargo added $0.61 to $42.99 after reporting higher than consensus third quarter revenues.
![clip_image003[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/10/clip_image0031-3.png "clip_image003[1]")
EquityClock’s Daily Comment
Headline reads “Reversal sessions in the equity market to the magnitude realized on Thursday are very rare, but they typically indicate indecision resulting in a spotty track record of forward returns for stocks”.
http://www.equityclock.com/2022/10/13/stock-market-outlook-for-october-14-2022/
Link offered by valued providers
Greg Schnell notes “Nice clues arrived on Thursday”.
https://stockcharts.com/articles/canada/2022/10/nice-clues-arrived-on-thursday-77.html
Hap Sneddon on BNN Bloomberg late yesterday says “We have been looking for a bottom in equity markets”.
Technical Notes for yesterday
Editor’s Note: North American equity markets opened strongly lower yesterday after the release of a “hotter than expected” September CPI report. By 10:00 AM EDT, indices entered into a spectacular “outside reversal”, a technically bullish event that is occurring when equity indices are extremely oversold. The following notes show the technical breakdowns recorded by indices, ETFs and individual equities prior to the reversal:
Dow Jones Industrial Average briefly dropped below 28,715.85 touching a two year low.
TSX Composite Index briefly dropped below $10,169.86 touching a 21 month low.
Selected ETFs briefly dropped below intermediate support: XLF, XLV, EZU, EWY, EWI, EFA, EZA, PIN, DIA, RSP, IEV, IWM, IAI, IHI, KBE, IYT, PHO, IHI, ZEM.TO
Selected S&P 100 stocks briefly dropped below intermediate support: AXP, BAC, BRK.B, IBM, MA, V, DOW, LOW
Selected NASDAQ 100 stocks briefly dropped below intermediate support: FAST, BIDU, CDW, EBAY, FISV, GOOG, MELI, NXPI, VRSN, TMUS, IDXX
Selected TSX 60 stocks dropped below intermediate support: NA, MFC, RY, CNR, GIB.A, CSU
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for October 13th 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for October 13th 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for October 13th 2021
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
Repeat of Larry Williams’ video entitled “Up, up and away”
Up, Up & Away | Larry Williams Special Presentation (10.12.22) – YouTube
S&P 500 Momentum Barometers
The intermediate term Barometer added 6.80 to 17.60 yesterday. It remains Oversold. It also showed more evidence of recovering from a bottom.
The long term Barometer added 2.40 to 18.80 yesterday. It remains Oversold. It also showed more evidence of recovering from a bottom.
TSX Momentum Barometers
The intermediate term Barometer added 3.39 to 30.08 yesterday. It remains Oversold, but shows short term signs of recovery.
The long term Barometer added 2.54 to 26.27 yesterday. It remains Oversold, but shows short term signs of recovery.
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 14th, 2022 at 9:09 am
Continuation of div yield discussion – Div yields on the banks are now higher than they were 6 months ago directly as a result of dropping share price. Pre-pandemic BMO was averaging around 4% yield in 2019 compared to 4.8% at the moment. In 2019 CPI was 1.9% compared to 8% at the moment. You could borrow money at the time to buy shares at an interest rate less than the dividend yield you were getting. I was aware of that fact at the time and loved the banks. That situation obviously does not exist today. Banks probably bottomed. That 4.8% yield will drop if share price rises but you will make money on capital appreciation. The banks will modestly raise dividend payouts. The question is what will happen with bank earnings over the next year. Net interest margins will be higher but loan activity will be lower. IMO they will muddle through.
October 14th, 2022 at 10:14 am
Hi bernie,
About yesterdays posting about the inflation rate it was the inflation for the decade so the percentage was how much more expensive the cost of life at the end of the decade.
Yesterdays posting was from an inflation website that I found on a computer at work I would have loved to give you the website link but i’m at home today and can’t seem to find the website.
damn web browser 🙁
Yes Kam don’t forget english is not my main tongue its my third. So you must bare with me 🙂
October 14th, 2022 at 11:05 am
Hi Larry,
Humm good question about banks earnings.
First since we all have bank accounts and most peeps have a high level of debt Not sure everyone has the minimum required to avoid the banking fees.
Second after the 2008 crisis the governments added the stress test were clients must be able to pay at loans of 5% and at most 30% of your income goes to your house.
Only thing I see is unemployement but having babyboomers leaving the workforce as they don’t need to work as they are settled, so it leaves us with unemployement at its lowest and the workers have it their way as employers can’t affoard to lose their employes even if they don’t do the job or don’t have resumes to fill out the positions.
This is a long shot but with what is happening today I think a lot of companies will downsize because they can’t meet the demand anymore.
and here’s where my reasoning comes from. I have friends in the aeronautics field can’t deliver their contracts in time as they don’t have the manpower because they had to layoff employees after the covid and now they are trying to recruit and have no resumes for the key positions and if they do they have no experience or incomptent. Other friends who left the field because they wanted to be in charge have the same problems where they are at.
and finally in construction we have what I call one man shows. people who want to be their own bosses who buy a pick up truck and start digging left and right and take a lifetime to do the job.
My neighboor tore down his house october 2019 and is still at it as the with the landscaping to be completed a one week job at most 10 days, they started on the 19 of september on a freaking rainy day other than the digging. they deliverd the landscaping material which is blocking two sides of the road and as of today everything is at a stand still.
Problem is everyone wants the $$$ but no one wants to do the work.
that’s my IMHO