Pre-opening Comments for Wednesday October 4th
U.S. equity index futures were higher this morning. S&P 500 futures were up 10 points at 8:30 AM EDT.
Economic focus today is on the September ISM Non-Manufacturing PMI released at 10:00 AM EDT. Consensus calls for a slip to 54.0 from 54.5 in August.
Cal-Maine dropped $6.00 to $41.50 after reporting less than consensus fiscal first quarter earnings.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2023/10/clip_image0011-1.png "clip_image001[1]")
Apple dropped $1.64 to $170.76 after KeyBanc downgraded the stock from Overweight to Sector Weight.
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2023/10/clip_image0021-2.png "clip_image002[1]")
Intel gained $0.67 to $36.36 after announcing plans for an initial public offering of its program chip unit.
![clip_image003[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2023/10/clip_image0031-1.png "clip_image003[1]")
Fluor added $0.70 to $35.32 after UBS upgraded the stock from Neutral to Buy. Target was increased from $35 to $47.
![clip_image004[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2023/10/clip_image0041-2.png "clip_image004[1]")
EquityClock’s Daily Comment
Headline reads “Rising rates will remain a headwind against stocks until the market comes to a consensus that the economy is slowing”
https://equityclock.com/2023/10/03/stock-market-outlook-for-october-4-2023/
Technical Notes
Signs of stock market capitulation? The VIX Index (better known as the “Fear Index”) soared.to a five month high.
Dow Jones Industrial Average moved below its December 30th 2022 close at 33,147.25 implying a year-to-date change of less than zero.
TSX Composite Index moved below 19,155.77 and S&P/TSE 60 Index moved below 1,151.42 setting intermediate downtrends.
The Canadian Dollar $CDW moved below US73.02 extending an intermediate downtrend.
Nikkei Average dropped below 31,275.25 completing a modified double top pattern
China iShares $FXI moved below $25.85 extending an intermediate downtrend.
Agriculture ETF $MOO moved below $76.67 extending an intermediate downtrend.
Lumber ETF $WOOD moved below $7152 setting an intermediate downtrend.
Palladium ETF $PALL moved below $109.08 extending an intermediate downtrend.
S&P 100 stocks moving below intermediate support included GM, GS, CRM, CAT, EMR, BAC and MET
NASDAQ 100 stocks moving below intermediate support included CPRT and REGN
TSX Financials iShares $XFN.TO moved below Cdn$41.73 extending an intermediate downtrend.
TSX 60 stock moving below intermediate support included $BMO.TO, CM.TO, NA.TO, GIB and FNV.TO
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for Oct.3rd 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 October 3rd 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for October 3rd 2023
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
Watch For Signs of Market Bottom As Market Breadth Conditions Crumble | The Final Bar (10.02.23)
https://www.youtube.com/watch?v=Uh60z6nxLHQ
Are You Looking for the BIG Capitulation Day? | Trading Places (10.03.23)
Are You Looking for the BIG Capitulation Day? | Trading Places (10.03.23) – YouTube
Ed Yardeni explains why the bond vigilantes aren’t happy
Ed Yardeni explains why the bond vigilantes aren’t happy – YouTube
S&P 500 Momentum Barometers
The intermediate term Barometer dropped another 3.60 to 8.60. It remains Oversold. Daily downtrend was extended.
The long term Barometer dropped another 3.00 to 36.20. It remains Oversold, Daily downtrend was extended.
TSX Momentum Barometers
The intermediate term Barometer dropped another 0.44 to 15.86. It remains Oversold. Daily downtrend was extended.
The long term Barometer dropped another 3.52 to 28.19. It remains Oversold. Daily downtrend was extended.
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 4th, 2023 at 12:49 pm
This seasonal market drop has gone pretty much to exactly as Equity Clock has been predicting down to the 4200-4260 range. Seasonal weakness on average ends the second week of October. We are just above the 200day MA and market froth is all gone. The drop in bond yields and oil prices is supportive. USD is the most overbought since the market low in Oct 2022. The CNN market sentiment indicator is now at extreme fear. From these conditions the more likely direction is upward rather than downward.
I’m not happy with the drop today in WTI but it is a healthy thing. Q3 results for Cdn energy companies should be quite good and we should see good future guidance when they report.
October 4th, 2023 at 5:46 pm
Classic seller exhaustion today on the TSX, after 13 days in a row of heavy selling of “value” stocks, ending with a nice clean “hammer” candlestick on the TSX Daily chart. As Buffet has said: Buy when others are fearful, sell when others are greedy. Today is a good day to buy on the TSX. Classic oversold RSI and Full Stochastics.
https://stockcharts.com/h-sc/ui?s=%24TSX&p=D&b=5&g=0&id=p25677146266
Of course no guarantees, might be a little early, but of all days to be bullish, this one is a good for me, and I was buying. Still keeping some room on reserve, waiting for confirmation, but hard to resist BNS at 7.10% yield; ENB at 8.10% yield, etc. large caps on fire sale.
SPY on 200 DMA, QQQs way above it, no main issues there. Tech is still ruling as it has all year. I’ve been overweight there. Last year Tech was the underperformer, this year the outperformer.
Extremes on TSX 50 DMA and 200 DMA charts.
https://stockcharts.com/h-sc/ui?s=%24TSXA50R&p=D&b=5&g=0&id=p24889373321
https://stockcharts.com/h-sc/ui?s=%24TSXA200R&p=D&b=5&g=0&id=p12979246326
This year TSX value the great underperformer. Why? Yield stocks, so bond like. What does that tell me? These are value stocks that do poorly when rates climb, like utilities, but outperform when rates fall and the economy is weak… Therefore, next year, I expect a recession, unless we are already in one, and the rate cuts that will come with it. Reminds me of Fall 2018.
In any case, really doesn’t matter, this rate hiking cycle will end with a recession eventually, and I get paid while I wait and accumulate best quality names with stock dividends. Looking for stable income here, as I am retired, cap gains secondary.