Pre-opening Comments for Monday August 28th
U.S. equity index futures were higher this morning. S&P 500 futures were up 18 points at 8:30 AM EDT.
Horizon Therapeutics added $5.38 to $112.05 after the Federal Trade Commission halted its challenge of Amgen to take over the company.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2023/08/clip_image0011-15.png "clip_image001[1]")
MMM gained $5.05 to 104.00 on news that the company is nearing a settlement to pay $5.5 billion to resolve a claim on faulty earplugs sold to the U.S. military.
Macom Technology added $1.51 to 81.55 after Benchmark upgraded the stock from Hold to Buy.
![clip_image003[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2023/08/clip_image0031-13.png "clip_image003[1]")
EquityClock’s Daily Comment
Headline reads “Breakout from trend channel resistance on the US Dollar Index threatens to impose a headwind against stocks moving forward”.
https://equityclock.com/2023/08/26/stock-market-outlook-for-august-28-2023/
The Bottom Line
High and rising interest rates on long term North American Treasuries have “put a lid” on North American equity markets. Comments by Federal Reserve Chairman Powell on Friday echoed comments by the Bank of Canada that central banks in North America are “prepared to raise rates further”. The stage is set for “choppy” equity markets between now and October.
Economic News This Week
Source: www.Investing.com
Focus this week is on the July Core PCE Price Index, the Federal Reserve’s favoured measure on inflation. The report is released on Thursday morning.
U.S. second quarter annualized real GDP released at 8:30 AM EDT on Wednesday is expected to increase 2.4% versus a gain of 2.0% in the first quarter.
July Core PCE Price Index is released at 8:30 AM EDT on Thursday is expected to increase 0.2% versus 0.2% in June. On a year-over-year basis, July Index is expected to increase 4.2% versus 4.1% in June.
July Personal Income released at 8:30 AM EDT on Thursday is expected to increase 0.3% versus a gain of 0.3% in June. July Personal Spending also is released.
August Chicago Purchasing Managers Index is released at 9:45 AM EDT on Thursday.
August Employment Report is released at 8:30 AM EDT on Friday. Non-farm Payrolls are expected to increase 170,000 versus a gain of 187,000 in July. August Unemployment Rate is expected to remain unchanged from July at 3.5%. August Hourly Earnings are expected to increase 0.3% versus a gain of0.4% in August. On a year-over-year basis, August Hourly Earnings are expected to increase 4.4% versus a gain of 4.4% in July.
Canada’s June GDP released at 8:30 AM EDT on Friday is expected to decline 0.2% versus a gain of 0.3% in May.
July U.S. Construction Spending released at 10:00 AM EDT on Friday is expected to drop 0.1% versus a gain of 0.5% in June.
August ISM Manufacturing PMI released at 10:00 AM EDT on Friday is expected to improve to 46.6 from 46.4 in July.
Selected Earnings News This Week
Source: www.Investing.com
Focus this week is on quarterly reports released by Canada’s major banks
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for August 25th 2023
Green: Increase from previous day
Red: Decrease from previous day
Source for all positive seasonality ratings: www.EquityClock.com
Commodities
Daily Seasonal/Technical Commodities Trends for August 25th 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for August 25rd 2023
Green: Increase from previous day
Red: Decrease from previous day
Technical Scores
Calculated as follows:
Intermediate Uptrend based on at least 20 trading days: Score 2
(Higher highs and higher lows)
Intermediate Neutral trend: Score 0
(Not up or down)
Intermediate Downtrend: Score -2
(Lower highs and lower lows)
Outperformance relative to the S&P 500 Index: Score: 2
Neutral Performance relative to the S&P 500 Index: 0
Underperformance relative to the S&P 500 Index: Score –2
Above 20 day moving average: Score 1
At 20 day moving average: Score: 0
Below 20 day moving average: –1
Up trending momentum indicators (Daily Stochastics, RSI and MACD): 1
Mixed momentum indicators: 0
Down trending momentum indicators: –1
Technical scores range from -6 to +6. Technical buy signals based on the above guidelines start when a security advances to at least 0.0, but preferably 2.0 or higher. Technical sell/short signals start when a security descends to 0, but preferably -2.0 or lower.
Long positions require maintaining a technical score of -2.0 or higher. Conversely, a short position requires maintaining a technical score of +2.0 or lower
Changes Last Week
Technical Notes for Friday
Intuit $INTU a NASDAQ 100 stock moved above $514.14 extending an intermediate uptrend.
Emerson $EMR an S&P 100 stock moved above $98.01 to a two year high extending an intermediate uptrend.
Links offered by valued providers
Michael Campbell’s Money Talks for August 26th
Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)
Wyckoff Case Study Pare 2 w/ Special Guest Roman Bogomazo | Power Charting (08.25.23)
https://www.youtube.com/watch?v=8mzvqZDAjp8
How the Market Is Shaping Up After 3 Weeks Down | Moxie Indicator Minutes (08.25.23)
https://www.youtube.com/watch?v=m8Aa0RmBB10
Watch These Four Horrible Charts in the Dow Jones Industrials Index
Watch These Four Horrible Charts in the Dow Jones Industrials Index | RRG Charts | StockCharts.com
Swenlin Trading Oscillators Trying To Turn Up
Swenlin Trading Oscillators Trying To Turn Up | DecisionPoint | StockCharts.com
Can Small Caps Lead the Market Higher? A Video Analysis
Can Small Caps Lead the Market Higher? A Video Analysis | Mish’s Market Minute | StockCharts.com
M2 Continues to Fall, Making Stocks Overvalued
M2 Continues to Fall, Making Stocks Overvalued | Top Advisors Corner | StockCharts.com
The Five Ratios ALL Investors Should Follow | The Final Bar (08.25.23)
The Five Ratios ALL Investors Should Follow | The Final Bar (08.25.23) – YouTube
August 25, 2023 | Has the Fed Eaten Yellen’s Magic Mushrooms? Bob Hoye
Has the Fed Eaten Yellen’s Magic Mushrooms? – HoweStreet
August 24, 2023 | BRICS vs The US Dollar Trading World
BRICS vs The US Dollar Trading World – HoweStreet
August 26, 2023 | Trading Desk Notes For August 26, 2023 Victor Adair
Trading Desk Notes For August 26, 2023 – HoweStreet
GDP Boom a Mirage As Barbenheimer/Swift/Beyonce Effect Fades.
GDP Boom a Mirage As Barbenheimer/Swift/Beyonce Effect Fades. – Uncommon Sense Investor
Technical Scoop from David Chapman and www.EnrichedInvesting.com
S&P 500 Momentum Barometers
The intermediate term Barometer added 3.00 on Friday, but slipped 1.20 last week. It remains Oversold. Daily trend remains down.
The long term Barometer added 1.60 on Friday, but slipped 2.20 last week. It remains Neutral.. Daily trend remains down.
TSX Momentum Barometers
The intermediate term Barometer added 5.29 on Friday and gained 3.53 last week to 40.97. It returned to Neutral on a recovery above 40.00.
The long term Barometer added 1.32 on Friday, but slipped 0.88 last week to 47.58. 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
|
|
August 28th, 2023 at 9:42 am
CNQ making new highs today. XEG, XOP and XLE are above their 20 day MAs. Energy is the best performing sector out there. Let’s see if XEG can make a new high. CNQ has a lot more possible upside to the $90 range.
August 28th, 2023 at 2:35 pm
A one year GIC at Tangerine is now paying 5.95%. In a TFSA GIC that is guaranteed non taxable free cash. Rates continue to rise……not fall as so many so called experts called for. Glad I didn’t believe them………..Nice to make non taxable guaranteed income.
August 28th, 2023 at 3:27 pm
Ron/BC, thanks for the HCAL chart yesterday. That is a new one for me. Also, for the GIC rates. I told my kids who have Tangerine accounts that it might be a good idea to get some.
August 28th, 2023 at 3:27 pm
Larry/ON, yes I noticed that CNQ.TO is finally breaking out of the long trading range. Nice gap up but on low volume, so let’s see if it sticks. Here is one of Ron/BC’s charts:
https://schrts.co/cHaBvXhr
August 28th, 2023 at 3:52 pm
Paula
Yes that HCAL does seem to be a good ETF to trade other than it does lack volume. It’s also inexpensive so one could buy more of it. I just bought a sizeable one year TFSA GIC today at 5.95% so can forget about that cash for one year. I realize that in a short while the BOC will announce the new rates and the U.S. will do the same and they are both warning of higher rates. But a bird in the hand is worth two in the bush so I’m satisfied with the 5.95% rate now. I have others that will come due next May.
Here is a Daily chart of CNQ.to and that breakout over the top of the bullish Ascending TRiangle is impressive. The negative divergence on the RSI 8 is a concern but if price can remain above the breakout line all is ok.
https://stockcharts.com/h-sc/ui?s=CNQ.TO&p=D&yr=2&mn=0&dy=0&id=p43050689130&a=673066382
August 28th, 2023 at 4:05 pm
Paula – Check CNQ now. Above average volume on both Cdn and US markets. I never watched the volume ticker before in the last seconds but more than 6 million shares popped on the screen in the last second. I wonder how that works. Is there some kind of volume of trading that takes place that is only accounted for on the books at the end of the session?
August 28th, 2023 at 4:06 pm
Paula
I had to laugh looking at a bunch of charts that I had marked with a vertical green line when the RSI 8 crossed back above the 30 line and also when crossing back down below the 70 line in red. Amazing how often they mark a price high on the red cross down and a price low when crossing back above the 30 line. Not perfect but worth paying attention to..Nothing like keeping it simple…………
https://stockcharts.com/h-sc/ui?s=HCAL.TO&p=D&yr=2&mn=0&dy=0&id=p05186628653&a=1095091175
August 28th, 2023 at 4:50 pm
Closing Auctions – This will account for huge volume at market close. Just like the opening auction. You will never know what the day’s volume really is until after it closes.
“What is a CAS? Closing auction, which allows execution at the closing price, is a trading mechanism commonly used in securities markets across the globe. During a closing auction, market participants interested in trading at the closing price may input buy and sell orders.”
August 28th, 2023 at 4:52 pm
Ron/BC,
Thanks for the updated CNQ.TO chart. I’m saving it. The negative divergence on the RSI 8 does not show up on the longer term weekly chart or at least it is hard to see.
August 28th, 2023 at 4:59 pm
Larry/On,
Yes, you are right re CNQ.TO. The volume jumped on the close. This makes the breakout even more significant. Thanks for the CAS – Closing Auction info.
August 28th, 2023 at 5:01 pm
Ron/BC, yes that RSI 8 cross over does seem to work well. I guess if you were inclined to trade, that would be a good tool. LOL
August 28th, 2023 at 5:53 pm
Paula
Well you could just hold a position until the rsi crosses down below the 70 level. Or buy on a cross back above the 30 level. It does work most of the time and when it doesn’t that’s what stop losses are for. If nothing else it’s a good heads up.