Pre-opening Comments for Monday June 24th
U.S. equity index futures were higher this morning. S&P 500 futures were up 3 points at 8:30 AM EDT.
Gold added $6.50 to$2,338.00 after JP Morgan noted its “structurally bullish” opinion on Gold and Silver. Target for gold in 2025 is $2,600. Target for silver is $34.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/06/clip_image0011-7.png "clip_image001[1]")
Anheuser Busch added $1.72 to $60.78 after UBS upgraded the stock to buy.
BioNTech advanced $2.05 to $86.69 after the FDA gave its cancer treatment a fast track designation.
![clip_image003[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/06/clip_image0031-7.png "clip_image003[1]")
Altimmune added $0.89 to $7.30 following positive results from its obesity trial trial.
EquityClock’s Stock Market Outlook for June 24th
Net assets on the Fed’s balance sheet has developed a declining path, no longer supportive of the upside momentum of the equity market.
https://equityclock.com/2024/06/22/stock-market-outlook-for-june-24-2024/
The Bottom Line
Focus this week is on the May Core PCE Price Index released on Friday. This report is the FOMC’s most important indicator for inflation. A drop below the 2.8% annual rate set in April will signal easing inflation pressures and will set the stage for the traditional “Summer Rally” by U.S. equity indices lasting from the last week in June to at least end of July. Average gain per period for the “Summer Rally” for the S&P 500 Index during the past 20 periods was 3.0%. The trade was profitable in 15 of the past 20 periods.
During Presidential Election years (like 2024), performance of the “Summer Rally” has been slightly different. Based on 73 years of data on the Dow Jones Industrial Average since 1950, the Summer Rally during Presidential Election years starts at the same time in the last week in June, but continues until mid-August. Average return per period was 2.5%.
The TSX Composite Index also has a history of moving higher from late June to the end of July. The trade has been profitable in 14 of the past 20 periods. Average return per period was 1.8%.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.FactSet.com
Earnings gains in 2024 on a year-over-year basis accelerate in the second and third quarters from the first quarter when earnings increased 5.9%. Consensus for the second quarter calls for an 8.8% earnings increase (versus 9.0% increase last week) and a 4.6% increase in revenues. Consensus for the third quarter calls for an 8.2% increase in earnings and a 4.9% increase in revenues.
Earnings gains accelerate further in the fourth quarter. Consensus calls for a 17.6% increase in earnings and a 5.5% increase in revenues (versus previous 5.6% increase).
For all of 2024, consensus calls for an 11.3% earnings increase and a 5.0% revenue increase.
Earnings gains accelerate further in 2025. First quarter earnings are expected to increase
15.4 % on a year-over-year basis (versus previous 15.3% increase) and revenues are expected to increase 5.8%. Second quarter earnings are expected to increase 15.5% (versus previous 15.2%) and revenues are expected to increase 5.9%. For all of 2025 earnings are expected to increase 14.4% (versus previous 14.3% increase) and revenues are expected to increase 6.0%.
Economic News This Week
Source: www.Investing.com
May Canadian Consumer Price Index released at 8:30 AM EDT on Tuesday is expected to increase 0.3% versus a 0.5% increase in April. On a year-over-year basis, May Canadian CPI is expected to increase 2.6%, unchanged from April.
May US New Home Sales released at 10:00 AM EDT on Wednesday are expected to increase to 650,000 from 634,000.
May Durable Goods Orders released at 8:30 AM EDT on Thursday are expected to increase 0.3% versus a gain of 0.7% in April.
Next estimate of US First quarter annualized real GDP growth released at 8:30 AM EDT on Thursday is expected to remain unchanged at 1.3% versus a gain of 3.4% in the fourth quarter
Core May PCE Price Index released at 8:30 AM EDT on Friday is expected to increase 0.1% versus a gain of 0.2% in April. On a year-over-year basis, Core May PCE Price Index is expected to drop to 2.6% from 2.8% in April.
May Personal Income released at 8:30 AM EDT on Friday is expected to increase 0.4% versus a gain of 0.3% in April. May Personal Spending is expected to increase 0.3% versus a gain of 0.2% in April.
June Michigan Sentiment released at 10:00 AM EDT on Friday is expected to drop to 67.6 from 69.1 in May.
Selected Earnings News This Week
Source: www.Investing.com
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for June 21st 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 June 21st 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for June 21st 2024
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
SUMMER SOLSTICE AND THE FULL MOON: Mark Leibovit
https://www.howestreet.com/2024/06/summer-solstice-appears-to-be-affecting-markets-mark-leibovit/
Why Technical Analysis Does NOT Work for Leveraged ETFs: David Keller
Why Technical Analysis Does NOT Work for Leveraged ETFs – YouTube
Market Concentration Concerns with Cameron Dawson and Guy Adami
Market Concentration Concerns with Cameron Dawson – YouTube
Seasonality and Positive News Push These Stocks into an Uptrend: Mary Ellen McGonagle
Seasonality and Positive News Push These Stocks into an Uptrend | The MEM Edge | StockCharts.com
Gold Top? Focus on These Potential Price Objectives : Stewart Taylor
Mike’s Money Talks for June 22nd
Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)
Is Copper Really in a “Super Cycle”? Bob Hoye
Is Copper Really in a “Super Cycle”? – HoweStreet
Trading Desk Notes For June 22, 2024: Victor Adair
Trading Desk Notes For June 22, 2024 – HoweStreet
Canadian Financial Weakness Stands Out: Danielle Park
Canadian Financial Weakness Stands Out – HoweStreet
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
South Africa iShares $EZA moved above $43.78 extending an intermediate uptrend.
Corn ETN $CORN moved below $19.56 and $19.41 setting an intermediate downtrend.
S&P 500 Momentum Barometers
The intermediate term Barometer added 1.40 on Friday and gained 10.00 last week to 53.60. It remains Neutral.
The long term Barometer added 1.20 on Friday and gained 3.80 last week to 70.80. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer dropped 4.96 on Friday and dropped 5.86 last week to 30.63. It remains Oversold. Daily trend remains down.
The long term Barometer slipped 1.35 on Friday and dropped 4.50 last week to 57.21. It changed from Overbought to Neutral on a drop below 60.00. Daily trend remains 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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June 24th, 2024 at 11:24 am
Ron
What would ZEB have to say about levels of support?
Thanks
June 24th, 2024 at 1:48 pm
Bman/Van
ZEB.TO has a similar pattern.Looks like a breakdown but the RSI 8 is recrossing back above the 30 line which tends to be a good signal for a bounce back. If price can clear 35 and hold it should be good for a run up of a couple of bucks.Not at my COMPUTER right now so no chart to post. The 200ema needs to hold here.
June 24th, 2024 at 2:40 pm
CNQ – Could it finally be that it has broken that painful downtrend that touched on the 200dayMA? XOP and XLE also bounced off their 200 day MAs. I’d like to see a couple more up days and a decisive break of the upper end of the trading channels XOP and XLE formed during their downtrend. We’re close.
June 24th, 2024 at 2:41 pm
Bman/Van
Here is a Daily chart of ZEB.to. Chart patterns like this can be explosive both up or down. Great chart to use Option Strangles on. But this tight price pattern below 35 which is technically a breakdown is also testing the 200ema support with the RSI 8 recrosing back above the 30 line. Lots of potential with this. Price needs to clear 35 to suggest another run up now. A break below the 200ema now would suggest much further selling.
https://stockcharts.com/h-sc/ui?s=ZEB.TO&p=D&yr=1&mn=0&dy=0&id=p71956118516&a=1040472218
June 25th, 2024 at 12:00 am
Ron
Thanks for the feedback and charts. Upcoming month should resolve the direction you have noted, fingers crossed for a buying opportunity. Although, based on the economic updates and data, it kind of feels like we will break to the downside which may then set us up for another strong winter rally.