Pre-opening Comments for Monday April 5th
U.S. equity index futures were higher this morning. S&P 500 futures were up 40 points at 8:35 AM EDT despite Iran’s missile attack on Israel over the weekend.
Index futures gained 9 points following release of March U.S. Retail Sales at 8:30 AM EDT. Consensus was an increase of 0.3% versus a revised gain of 0.9% in February. Actual was an increase of 0.7%. Excluding auto sales, consensus for March U.S. Retail Sales was an increase of 0.4% versus a revised gain of 0.6% in February. Actual was a gain of 0.6%.
Lockheed Martin gained $7.27 to $458.22 after JP Morgan upgraded the stock from Neutral to Overweight.
![clip_image001[5]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/04/clip_image0015.png "clip_image001[5]")
Goldman Sachs added $9.51 to $399.00 after reporting higher than consensus quarterly results.
![clip_image002[5]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/04/clip_image0025-1.png "clip_image002[5]")
Cisco added $1.11 to $49.60 after Bank of America upgraded the stock from Neutral to Buy.
Target price was raised to $60.00.
Tesla dropped $1.95 to $169.10 on reports that the company expects to reduce its employee count by 10%.
![clip_image004[5]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/04/clip_image0045-1.png "clip_image004[5]")
The Bottom Line
The attack by Iran on Israel on Saturday is a “Black Swan event” that is expected to have a significant negative impact on world equity markets when they open on Monday.
U.S. equity markets were “off to a rough start” last week following initial releases of first quarter results by major companies: Notably weaker following release of quarterly results included Blackrock, Fastenal, JP Morgan, Wells Fargo and Citigroup. Weakness was recorded despite reports that revenue and earnings gains exceeded consensus.
Trigger for weakness was the March Consumer Price report released last Wednesday. CPI was “hotter” than expected, implying an extension of tight monetary policy by the Federal Reserve beyond the next FOMC meeting on June 12th
Commodity prices and their related stocks continued to move strongly higher. Strength was notable last week in agricultural (DBA), Base metal (DBB) and precious metals (GLD) ETNs
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.FactSet.com
Analysts significantly reduced earnings estimates for the first quarter of 2024. Consensus on a year-over-year basis calls for an earnings increase of 0.9% (versus a 3.2% increase last week). Revenues are expected to increase 3.4% (versus a 3.5% increase last week).
Earnings gains accelerate in the second and third quarters. Consensus for the second quarter calls for a 9.4% earnings increase and a 4.6% increase in revenues (versus a 4.7% increase last week). Consensus for the third quarter calls for an 8.6% increase in earnings (versus previous 8.5% increase) and a 5.1% increase in revenues (versus a previous 5.2% increase).
Earnings gains accelerate in the fourth quarter. Consensus for the fourth quarter calls for a 17.7% increase in earnings (versus previous 17.5% increase) and a 5.8% increase in revenues.
For all of 2024, consensus calls for a 10.3% earnings increase (versus previous 10.9% increase) and a 4.8% increase in revenues (versus previous 5.1% increase)
Estimates for fiscal 2025 were raised slightly. Consensus calls for a 14.0% earnings increase (versus previous 13.4% increase) and a 5.9% revenue increase.
Economic News This Week
Source: www.Investing.com
March U.S. Retail Sales released at 8:30 AM EDT on Monday are expected to increase 0.3% versus a gain of 0.6% in February. Excluding auto sales, March Retail Sales are expected to increase 0.4% versus a gain of 0.3% in February.
April Empire State Manufacturing Survey released at 8:30 AM EDT on Monday is expected to recover to -9.00 from -20.90 in March.
February Business Inventories released at 10:00 AM EDT on Monday are expected to increase 0.3% versus unchanged in January.
March U.S. Housing Starts released at 8:30 AM EDT on Tuesday are expected to drop to 1.480 million units from 1.521 million units in February.
March Canadian Consumer Price Index is released at 8:30 AM EDT on Tuesday.
March U.S. Capacity Utilization released at 9:15 AM EDT on Tuesday is expected to increase to 78.5% from 78.3% in February.
Beige Book is released at 2:00 PM EDT on Wednesday.
April Philly Fed is released at 8:30 AM EDT on Thursday
March U.S. Existing Home Sales released at 10:00 AM EDT on Thursday are expected to slip to 4.20 million units from 4.38 million units in February.
March U.S. Leading Economic Indicators are released at 10:00 AM EDT on Thursday
Selected Earnings News This Week
Source: www.Investing.com
Six percent of S&P 500 companies have reported first quarter results to date. Another 44 companies are scheduled to release results this week. Focus is on reports by major banks:
No TSX 60 companies are scheduled to report.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for April 12th 2024
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 April 12th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for April 12th 2024
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
Silver Miners ETF $SIL moved above $33.04 to a two year high extending an intermediate uptrend
Junior Gold Miners ETF $GDXJ moved above $43.57 extending an intermediate uptrend.
Agnico-Eagle $AEM a TSX 60 stock moved above US$62.87 extending an intermediate uptrend.
Wheaton Precious Metals $WPM.TO a TSX 60 stock moved above Cdn$73.24 to an all-time high extending an intermediate uptrend.
Oil and Gas Exploration SPDRs $XOP moved above $161.65 to a nine year high extending an intermediate uptrend.
Consumer Discretionary SPDRs moved below $177.18 completing a double top pattern.
Biotech ETF $BBH moved below $158.16 setting an intermediate downtrend.
Hong Kong iShares $EWH moved below $15.19 to an 8 year low extending an intermediate downtrend.
S&P 100 stocks moving below intermediate support included Medtronic on a moved below $81.23,
Intuit on a move below $620.17, UnitedHealth Group on a move below $438.90 and $438.56 and Abbott Laboratories on a move below $108.57, Coca Cola on a move below $58.50 and $58.19, Union Pacific on a move below $233.27, Microchip Technology on a moved below $85.80 and Texas Instruments on a move below $165.98.
Cameco $CCJ a TSX 60 stock moved above US$51.33 to an all-time high extending an intermediate uptrend.
Links offered by valued providers
Michael Campbell’s Money Talk for April 13th
Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)
The stock market now is in correction mode: Mark Leibovit
https://www.howestreet.com/2024/04/is-the-stock-market-now-in-correction-mode-mark-leibovit/
S&P 500 Flashes Major Topping Signals: David Keller
S&P 500 Flashes Major Topping Signals | The Mindful Investor | StockCharts.com
From Relic To Reckoning: Can Gold Surge To $3,000? Karl Montevirgen
From Relic To Reckoning: Can Gold Surge To $3,000? | ChartWatchers | StockCharts.com
2023 Q4 Earnings Analysis and Projections through 2024 Q4: Carl Swenlin
2023 Q4 Earnings Analysis and Projections Through 2024 Q4 | DecisionPoint | StockCharts.com
Time to sell everything?: Mary Ellen McGonagle
Time To SELL EVERYTHING?! – YouTube
What is the Best Way to Measure “Value” of Gold? Bob Hoye
What is the Best Way to Measure “Value” of Gold? – HoweStreet
Trading Desk Notes For April 13, 2024: Victor Adair
Trading Desk Notes For April 13, 2024 – HoweStreet
Technical Scoop from David Chapman and www.EnrichedInvesting.com
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 13.80 on Friday and plunged 28.40 last week to 44.40.
It changed from Overbought (i.e. above 60.00) to Neutral on a move below 60.00. Daily trend is down.
The long term Barometer dropped 4.00 on Friday and 6.80 last week to 71.80. It remains Overbought. Daily trend is down.
TSX Momentum Barometers
The intermediate term Barometers dropped 6.70 on Friday and plunged 12.95 last week to 53.57. It changed from Overbought to Neutral on a drop below 60.00. Daily trend is down.
The long term Barometer dropped 3.57 on Friday and 3.57 last week to 67.86. It remains Overbought. Daily trend is down.
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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April 15th, 2024 at 10:00 am
Re Israel/Iran: The only effect that may come out of this conflict is possible constraints on oil supply through the Straights of Hormuz causing an oil price spike. It would be disruptive but temporary. The US right now is putting pressure on Israel to to avoid an overreaction to the Iranian attack. All sides do not want an escalation. Israel will put itself in the position of diverting resources away from its’ Gaza conflict if it wants to engage with Iran. It’s all about posturing. Chances are that they find a way out. As we can see the market is shrugging it off right now and oil is down. SPX tagged the 50 day MA on Friday. Maybe that was it for the pull-back which would be a shallow 3% peak to trough correction. Maybe. Some were looking for a pull-back to 5000. Nobody’s hitting the panic button in this market.
April 15th, 2024 at 11:57 am
NTR
Sharon,
I remembered the name of the person who first posted the link to Ciovacco on this board: Tawny. I believe she moved to Mexico to live in a gated community and may have been having health issues the last time she posted which must be at least 5 years ago, probably more.
Ron/BC,
You are right that we haven’t heard from Ana in quite awhile. She was into trading S&P futures and only posted occasionally. I think she was looking after her mother and did not have much time on her hands.
April 15th, 2024 at 1:57 pm
Paula
I can understand that as I looked after both my mom and dad and then my wife for years before they passed. I think going over a cliff while still reasonably healthy would be a better option.
April 15th, 2024 at 5:22 pm
Ron/BC
I agree with you but the “while still reasonably healthy” part is the conundrum. That can really vary a lot. Here is another area whether Canada excels. Since 2016. We have had Medical Assistance in Dying (MAID). I have a close relative who took advantage of that to end his life/pain peacefully surrounded by family. Might be a better option than going over a cliff.
I am afraid this may lead us down another slippery slope, in terms of taking off the topics of the market/trading/investing.
https://www.justice.gc.ca/eng/cj-jp/ad-am/bk-di.html#s0
April 15th, 2024 at 5:34 pm
Thank you to Tawny.
Also thank you for passing the information along at this time. Has Ciovacco been putting out these types of videos for that long – 5 years? Have you been listening to the videos for 5 years? If so, what do you think of the consistency of his data and message? I tried to look back but I only found a few months of videos. I like his style and information: data, probabilities and looking at history.
April 15th, 2024 at 6:32 pm
SharonBC,
Yes, Ciovacco has been putting out these types of videos for at least 5 years and I have been listening to them and taking notes for at least that long. The consistency of his data seems sound but he is not that nimble. For example, I recall that when there was a “breadth thrust” in early 2019, after a short bear in late 2018, he was not as quick to re-enter. This makes sense, b/c he takes a longer-term perspective so the indicators do not move as quickly as a short-term perspective. In other words, he is an investor, not a trader. The type of clients he wants are those who are willing to take a pre-determined level of short-term drawdown, in exchange for a larger long-term gain. This has been a big part of his presentations. Of course, we are not necessarily his clients and are free to take or leave his perspective. To me, the fact that he puts out this information for free says a lot about his integrity.
I’m not sure how far back his videos go but maybe he hasn’t been on YouTube that long. Here is a link to his “Short Takes” which you can get to from his website. Check out the lower right-hand corner of each page for a link to “Older Posts”. I did that and got as far as August 11, 2023. There are also his short articles mixed in between the videos.
https://www.ccmmarketmodel.com/short-takes?offset=1693355705975
April 15th, 2024 at 7:26 pm
Paula
Thanks for your comments. I’ve looked at many analysts and found they all stay in a trade far too long. It’s like they are afraid to be wrong so “hang in there” to be called investors and try to maintain credibility. I’ve always just used a stop loss and abided by it as I put it on when I was bullish but cautious and at some point see it get hit at my surprise. Once back in cash I have much more clarity as what I did and why. An excellent indicator is how much hype and bullishness I see with rising prices. Never good to be with the raving crowd. Like Nortel Network. I was beside a lady in her 30’s in a Credit Union long ago and her talking with an investment councilor. She said she and her husband had bought Nortel from the beginning and bought more every payday. They were now rich according to most. The councilor suggested she might sell some of her stock but she said they would never sell any of it. We all know the ending to that story. She and her husband enjoyed the notoriety of being successful investors like many do but ultimately got wiped out. It was like being high on drugs and then coming down hard. It’s a very human trait…………..
April 15th, 2024 at 9:16 pm
Paula
The article you posted about MAID showed how government policy goes on and on constantly changing over the years. Try being a beneficiary in their will and being involved in the day to day decision making regarding advising the patient with other relatives and loved ones watching and listening and advising the patient. There will always be some who suspect you are more concerned with your inheritance than the patience well being. So when it comes to myself I’ll chose the cliff any day of the week.