Pre-opening Comments for Tuesday July 23rd 2024
U.S. equity index futures lower this morning. S&P 500 futures were down 6 points at 8:30 AM EDT.
Nucor dropped $1.63 to $161.71 after lowering its third quarter earnings outlook.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/07/clip_image0011-8.png "clip_image001[1]")
Cleveland Cliffs added $0.19 to $15.40 after reporting better than consensus second quarter results.
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/07/clip_image0021-8.png "clip_image002[1]")
Zion Bancorp gained $1.79 to $51.27 after reporting higher than consensus second quarter earnings.
![clip_image003[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/07/clip_image0031-7.png "clip_image003[1]")
NXP Semiconductor dropped $22.81 to $261.00 after offering a lower than consensus third quarter outlook.
![clip_image004[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/07/clip_image0041-7.png "clip_image004[1]")
EquityClock’s Stock Market Outlook for July 23rd
The period of average volatility for stocks starts today and so too does the optimal holding period for a wide range of inverse ETFs.
https://equityclock.com/2024/07/22/stock-market-outlook-for-july-23-2024/
Technical Notes
BMO Equal Weight Canadian Banks ETF $ZEB.TO moved above Cdn$36.73 to a 27 month high extending an intermediate uptrend.
Commerce Bank $CM.TO a TSX 60 stock moved above Cdn$68.60 to a 27 month high extending an intermediate uptrend
Platinum ETN $PPLT moved below $86.63 setting an intermediate downtrend..
CrowdStrike $CRWD a NASDAQ stock moved below $280.88 extending an intermediate downtrend.
Hydro One $H.TO a TSX 60 stock moved above Cdn$41.29 to an all-time high extending an intermediate uptrend.
Seasonality Chart of the Day
Courtesy of www.equityclock.com
Analysis of the BMO S&P/TSX Equal Weight Banks Index ETF (TSE:ZEB.TO) seasonal charts above shows that a Buy Date of July 22 and a Sell Date of October 24 has resulted in a geometric average return of 1.83% above the benchmark rate of the S&P 500 Total Return Index over the past 14 years. This seasonal timeframe has shown positive results compared to the benchmark in 13 of those periods. This is an excellent rate of success and the return strongly outperforms the relative buy-and-hold performance of the stock over the past 14 years by an average of 4.38% per year.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for July 22nd 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 July 22nd 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for July 22nd 2024
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
Biden’s Exit and the Trump Trade: What it means for markets: Guy Adami and Dan Nathan
Biden’s Exit & The Trump Trade: What It Means for Markets – YouTube
Expect BoC to cut interest rate on Wednesday: Holt
Expect BoC to cut interest rate on Wednesday: Holt – YouTube
Why Ed Yardeni Sees an Ongoing Bull Market
Why Ed Yardeni Sees an Ongoing Bull Market – YouTube
S&P 500 Momentum Barometers
The intermediate term Barometer added 4.40 to 69.60. It remains Overbought.
The long term Barometer added 1.00 to 76.00. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer added 4.42 to 78.76. It remains Overbought.
The long term Barometer added 1.33 to a three year high at 82.74. It remains Overbought. Daily uptrend 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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July 23rd, 2024 at 10:51 am
RY.TO just saw the RSI 8 cross below the 70 line for a sell signal. Doesn’t mean one has to take it but is worth paying attention to. Apparently the Bank of Canada will “Likely” cut interest rates Wednesday. That supposedly will suggest Bank stocks will rally. Technically they don’t like like they plan on rallying. Seasonal Trend charts show August weak and September the weakest time of the year.
https://stockcharts.com/h-sc/ui?s=RY.TO&p=D&yr=0&mn=6&dy=0&id=p12147340215&a=1729489965
https://stockcharts.com/freecharts/seasonality.php?symbol=RY.TO
July 23rd, 2024 at 12:59 pm
Not sure if this link will work but the Equal Weight Bank Stock ETF:ZEB.to is very overbaought plus at price resistance (triple top) of 36.70 area. Not a positive looking chart right now. Especially with an expected interest rate cut by the B.O.C. Wednesday.
https://schrts.co/sZdkrzWn
July 23rd, 2024 at 1:26 pm
Morning Ron
Yeah, there looks to be a storm brewing for the banks in Canada based on the overbought positions. I am hoping this opens a buying opportunity similar to last Oct for a longer term hold going long. The other area that is starting to break down is energy, specifically E&P which would be interested in what your thoughts are. I am seeing not much support for oil till it gets to $70 which should push the energy sector down another 15%. Technicals look to be similar to the banks?
Thanks
July 23rd, 2024 at 1:49 pm
Bman/Van
Here is a chart with some info on it re:CL and XEG.to and XLE.
https://schrts.co/HjcZkJYM
July 23rd, 2024 at 1:55 pm
Bman/Van
Ignore #4 chart as CL without the contract month is not Crude. I’ll see what I can come up with.
July 23rd, 2024 at 2:02 pm
Bman/Van
Here is WTIC which is the continuous contract for Crude. I’ve overlaid ZEB.to which is the equal banks ETF. They do have a similar price pattern. Never considered that myself. I guess one could overlay the U.S. bank ETF as well but should be similar.
https://schrts.co/VIRxIBbm
July 23rd, 2024 at 2:07 pm
Bman/Van
Here is another one to consider.
https://schrts.co/XcPNfpms
July 23rd, 2024 at 3:55 pm
I have been watching XBM.TO, which holds FCX as well as TECK. With the downdraft in copper, it is becoming very oversold. Problem with this ETF is the low liquidity. It had a nice reversal at the 200e EMA today but this also looks like a possible head and shoulders pattern.
I have traded it in the past.
https://schrts.co/cdyICtce
July 23rd, 2024 at 4:30 pm
Ron/BC and Bman/Van,
Re the discussion on Cdn banks, it seems that you are at odds with the opinion on this site. See Seasonality Chart of the Day above.
July 23rd, 2024 at 6:10 pm
Hi Paula
I know that I am off side on the seasonality chart with regards to the banks, but seasonality does not always happen. My view is also very counter to what the talking heads are saying on BNN. I agree with their points that the banks should benefit later this year, but between now and then is the real question. At this point thinking the technicals were supported by the uptick in prices from the mini summer rally, but it will get harder for the bulls to keep running in the face of weak economic data and we are overdue for a market pullback (5%) or correction (10%+). Brian Belski (BMO) among others some this as a reasonable chance. Some combination will likely pull them down which like the oil companies will allow a buy placement in the next 60-75 days (timing could be off +/- 2 months given the US election / weakness into Oct). If you are a subscriber here, Don has been mentioning be prepared for volatility and there is risk in equities over bonds so my route is somewhat aligned, but counter to the bank seasonals. Expect by the end of next week all the CAD banks have peaked and are in some retreat, how long that will last will depend on the data. I will wait for the technicals to tells the next story.
July 23rd, 2024 at 6:28 pm
Bman/Van
Re:10 Post
I couldn’t have said it better myself. I’ve never bet a lot on what the experts are saying but always believed the charts and what they indicate. I’ll post seasonals on a chart but the chart’s technicals have always taken priority over anything or anyone’s opinion. No offence but the charts give a better indication of what’s going on. If they didn’t one would have to ask why they are all overbought. But yes, price can “break out” and run higher and I don’t think they will but that thought wont cost me any money either. I’m just not a believer in stories. And everyone “just knows” the B.O.C. will cut rates Wednesday. I wouldn’t “assume” bank prices will rally strongly even if they do.
July 23rd, 2024 at 6:50 pm
Bman/Van
I also value contrary opinion. When everyone is on one side of the fence I tend to favour the other side. Or stand aside. But I’ve never liked to be with the crowd. That attitude has saved me financially and personally countless times.
July 23rd, 2024 at 7:35 pm
For those wishing to park some cash at a 5.05% interest rate EQBank is still paying that amount for a one year GIC. MCAN Wealth is paying 5.10% but I don’t know anything about them. That GIC cash can be put into a TFSA for a tax free investment. This rate will likely drop very soon.
July 23rd, 2024 at 8:02 pm
Paula
Here is a chart of TECK/B.to with XBM.to overlaid XBM.to has next to no volume on it so not too much interest in it. TECK/B.to has a lot of volume and trades much the same. Always best to have a lot of volume to get in and out safely. As a side note see the RSI 6 in April give a buy signal but the RSI 8 did not as it was too large. Not that it matters as you would just not have made a trade then with the RSI 8. But TECK/B.TO is at price support now and a little oversold. Even the RSI 6 is only slightly below the 30 line. Bottom line price is at support so trades will be made there by other traders who trade price support levels. Just thought I’d mention this fwiw………..
https://schrts.co/aCfsMSvt
https://schrts.co/RCqGbkFy