Pre-opening Comments for Monday April 22nd
U.S. equity index futures were higher this morning. S&P 500 futures were up 22 points at 8:30 AM EDT.
Tesla dropped $5.30 to $141.75 after announcing a $2,000 price reduction for its U.S. produced autos.
Verizon added $1.70 to $76.50 after reporting higher than consensus first quarter revenues and earnings.
AZZ added $1.70 to $76.50 after reporting higher than consensus fiscal fourth quarter revenues and earnings.
Kura Oncology added $0.58 to $18.11 after receiving a break through designation for a leukemia therapy.
The Bottom Line
Short term technical action by world markets remains focused on the Israel/Iran conflict. Growing uncertainties had a negative impact on equity markets and a positive impact on commodity prices last week.
First quarter earnings report season ramps up this week. Responses to results released to date have been mixed. Focuses this week are reports by five of the seven “Magnificent Seven” companies. Reports by Exxon Mobil and Chevron on Friday also will be watched closely.
Economic focus this week is on the Core March PCE Price Index released on Friday.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.FactSet.com
Analysts slightly adjusted earnings estimates for the first quarter of 2024. Consensus on a year-over-year basis calls for an earnings increase of 0.5% (versus a 0.9% increase last week). Revenues are expected to increase 3.5% (versus a 3.4% increase last week).
Earnings gains accelerate in the second and third quarters. Consensus for the second quarter calls for a 9.6% earnings increase (versus 9.4% last week) and a 4.4% increase in revenues (versus a 4.6% increase last week). Consensus for the third quarter calls for an 8.7% increase in earnings (versus previous 8.6% increase) and a 5.0% increase in revenues (versus a previous 5.1% increase).
Earnings gains for the fourth quarter were reduced significantly. Consensus for the fourth quarter calls for a 10.7% increase in earnings (versus previous 17.7% increase) and a 5.0% increase in revenues (versus previous 5.8%)
For all of 2024, consensus calls for a 10.7% earnings increase (versus previous 10.3% increase) and a 5.0% increase in revenues (versus previous 4.8% increase)
Estimates for fiscal 2025 were reduced slightly. Consensus calls for a 13.8% earnings increase (versus previous 14.0% increase) and a 5.9% revenue increase.
Economic News This Week
Source: www.Investing.com
U.S. March New Home Sales released at 10:00 AM EDT on Tuesday are expected to increase to 668,000 from 662,000 in February
U.S. March Durable Goods Orders released at 8:30 AM EDT on Wednesday are expected to increase 2.5% versus a gain of 3.4% in February. Excluding Transportation, Orders are expected to increase 0.3% versus a gain of 0.3% in February.
February Canadian Retail Sales released at 8:30 AM EDT on Wednesday are expected to increase 0.1% versus a decline of 0.3% in January. Excluding auto sales, February sales are expected to be unchanged versus a 0.5% increase in January.
Annualized First Quarter U.S. GDP released at 8:30 AM EDT on Thursday is expected to increase 2.5% versus a gain of 3.4% in the fourth quarter.
U.S. March PCE Price Index released at 8:30 AM EDT on Friday.is expected to increase 0.3% versus a gain of 0.3% in February. On a year-over-year basis, the Index in March is expected to increase 2.6% versus a gain of 2.5% in February. Excluding food and energy, March PCE Price Index is expected to increase 0.3% versus a gain of 0.3% in February. On a year-over-year basis, the core Index is expected to increase 2.6% versus a gain of 2.8% in February.
U.S. March Personal Income released at 8:30 AM EDT on Friday is expected to increase 0.5% versus a gain of 0.3% in February. March Personal Spending is expected to increase 0.6% versus a gain of 0.8% in February.
April Michigan Consumer Sentiment released at 10:00 AM EDT on Friday is expected to slip to 77.8 from 77.9 in March.
Selected Earnings News This Week
Source: www.Investing.com
Seventy S&P 500 companies (i.e.14%) have reported quarterly reports to date. Another 158 companies (i.e. 31.6%) are scheduled to report this week (including 11 Dow Jones Industrial Average companies)
Five TSX 60 companies are scheduled to report
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for April 18th 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 19th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for April 19th 2024
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
Stock markets appear to be in Correction Territory: Mark Leibovit
Stock Markets Appear To Be in Correction Territory – HoweStreet
Charts Flashing "NO GO" for S&P 500!: Dave Keller and Tyler Wood
Charts Flashing "NO GO" for S&P 500! – YouTube
Top 10 Stocks to Watch April 2024: Dave Keller and Grayson Roze
Top 10 Stocks to Watch April 2024 – YouTube
Worst Week of the Year for the S&P 500 | Daily Stock Market Wrap 4/19
Worst Week of the Year for the S&P 500 | Daily Stock Market Wrap 4/19 – YouTube
Michael Campbell’s Money Talks for April 20th
Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)
Breakdown in Mega-Cap Growth Confirms Bear Phase David Keller
Breakdown in Mega-Cap Growth Confirms Bear Phase | The Mindful Investor | StockCharts.com
Important Inflection Point in FXI: Is It Time To Accumulate?
Are The Financials Sending Us A Major Warning Signal? Tom Bowley
Would a falling stock market take gold with it: Bob Hoye
Would a Falling Stock Market Take Gold With It? – HoweStreet
Federal Budget Does Nothing to Improve Productivity: Josef Schachter
Federal Budget Does Nothing to Improve Productivity – HoweStreet
Trading Desk Notes For April 20, 2024: Victor Adair
Trading Desk Notes For April 20, 2024 – HoweStreet
This is Just the Beginning of the CRASH: Jeff Huge
https://www.youtube.com/watch?v=XvddDyH3Zow
Technical Scoop from David Chapman and www.EnrichedInvesting.com
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
Consumer Discretionary SPDRs XLY moved below $169.36 extending an intermediate downtrend.
Apple $AAPL a Dow Jones Industrial Average stock moved below $165.24 extending an intermediate downtrend.
Meta Platform $META an S&P 100 stock moved below $481.78 and $476.00 setting an intermediate downtrend.
Netflix $NFLX an S&P 100 stock moved below $601.59 and $592.00 extending an intermediate downtrend.
Eli Lilly $LLY an S&P 100 stock moved below $727.62 completing a double top pattern.
ON Semiconductor $ON a NASDAQ 100 stock moved below $61.47 extending an intermediate downtrend.
Marvell Technologies $MRVL a NASDAQ 100 stock moved below $63.41 completing a Head & Shoulders pattern.
Broadcom $AVGO an S&P 100 stock moved below $1,198.91 completing a double top pattern.
S&P 500 Momentum Barometers
The intermediate term Barometer added 6.20 on Friday but dropped 7.40 last week to 37.00. It remains Oversold.
The long term Barometer added 1.80 to 70.80 on Friday, but slipped 1.00 last week to 70.80. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer added 1.79 on Friday, but slipped 1.34 last week to 52.23. It remains Neutral.
The long term Barometer added 0.45 on Friday, but dropped 2.68 last week to 65.18. It remains Overbought.
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 22nd, 2024 at 1:54 pm
The $SPX is showing the RSI 8 crossing back above the 30 line. This tends to see price bounce back to a varying amount. Could just be a dead cat bounce but is often a nice bounce back. Just something to watch……….
https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=6&dy=0&id=p92860078310&a=1592062075
April 22nd, 2024 at 3:53 pm
Ron/BC,
Bounce today, as expected.
Re your post #8 yesterday: I believe you are talking about the Fibonacci numbers which can be put on the chart by using the function that looks like a rainbow (without the colours) in the annotation menu. I applied it to your chart from today and this is what I got. Of course, the numbers you get depend on where you start and finish. I found it hard to set it so that the bottom number started at 4259.38, which looked like a good level to start from but I got closer to the top. As you can see, it makes the chart a lot more cluttered. I did not extend the lines since that would have made it even harder to read. The 38.20% and 50% retracement lines are not too far off a couple of the support lines that you drew. I find that adding these lines does not add that much to the chart and prefer to use the support and resistance lines that are obvious. But I know that a lot of traders go by these “fibs” and there are hedge funds that base their algorithms on them.
https://schrts.co/PAKepGrI
Re the ADX. This is my favourite indicator. The ADX measures the strength of the trend. When it is rising the trend is strong. The steeper the rise, the stronger the trend. Whether it is up or down is determined by whether the +DI is rising or the -DI is rising. In the example we were looking at, the -DI is currently rising so the $SPX is currently falling, which I indicate by a red vertical line. Back in November 2023, when the +DI crossed above the falling ADX, that was an early sign that the trend might be changing. When both the ADX and the +DI started rising that was a sign that the trend was moving up, which I indicate by a green vertical line. It’s like your RSI(8) crossing back above the 30 after having been below it giving a buy signal. The strength of the trend from that buy signal can be judged by the direction of the DI lines and the angle of the ADX. When the ADX is falling that indicates more of a trading range, which I indicate by blue vertical lines. I added a green box for the November buy signal and a red box for the recent sell signal. Of course, Stockcharts offers a more detailed explanation but this is how I look at it.
https://schrts.co/yhKkfIne
April 22nd, 2024 at 7:09 pm
Paula
Thanks for the explanation. I’ll have to play around with the the ADX as its been a long time since I used it. And yes, I know years ago I used to talk to commodity traders in the U.S. all the time and they always used Fib numbers for their trades. But I never really liked them. But their customers sure used them for buys and sells so couldn’t be ignored.
I see the RSI 8 is crossing above the 30 line but if tomorrow prices sell off the line will again drop below the 30 line and not show it ever crossed end of day. Too early to tell. One could just buy the short term cross up and put a stop loss below the entry price. I’m not a trading junkie so won’t bother. Thanks again……………..
April 22nd, 2024 at 8:02 pm
Paula
Here is the 6 month chart of $SPX with the ADX overlaid. I don’t see it’s value on this chart.
https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=6&dy=0&id=p33799233248&a=1592062075