Pre-opening Comments for Wednesday August 10th
U.S. equity index futures were higher this morning. S&P 500 futures were up 60 points in pre-opening trade.
Index futures moved higher following release of the U.S. July Consumer Price Index report at 8:30 AM EDT. Consensus was an increase of 0.2% versus a gain of 1.3% in June. Actual was unchanged from June. On a year-over-year basis consensus was an increase of 8.8% versus 9.1% in June. Actual was an increase of 8.5%. Excluding food and energy, consensus for July CPI was an increase of 0.5% versus a gain of 0.7% in June. Actual was an increase of 0.3%. On a year-over-year basis, consensus was an increase of 6.1% versus a gain of 5.9% in June. Actual was unchanged from June at 5.9%.
H&R Block added $1.58 to $41.02 after reporting higher than consensus fiscal fourth quarter earnings.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/08/clip_image0011-5.png "clip_image001[1]")
Wynn Resort dropped $3.03 to $63.00 after reporting lower than consensus second quarter revenues.
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2022/08/clip_image0021-6.png "clip_image002[1]")
Wendy’s slipped $0.11 to $21.00 after reporting lower than consensus second quarter revenues.
EquityClock’s Daily Comment
Headline reads “Investors are being observed de-risking around levels of significant resistance”.
http://www.equityclock.com/2022/08/09/stock-market-outlook-for-august-10-2022/
Technical Notes for yesterday
Vertex Pharmaceuticals $VRTX a NASDAQ 100 stock moved above $296.84 extending an intermediate uptrend.
American International Group $AIG an S&P 100 stock moved above $53.41 completing a double bottom pattern.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for August 9th 2022
Green: Increase from previous day
Red: Decrease from previous day
Commodities
Daily Seasonal/Technical Commodities Trends for August 9th 2022
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for August 9th 2021
Green: Increase from previous day
Red: Decrease from previous day
Link offered by a valued provider
Tom Bowley notes “S&P 500 short term top is here”
S&P 500 Short-Term TOP is Here | Tom Bowley | Trading Places (08.09.22) – YouTube
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 2.00 to 72.80 yesterday. It remains Overbought.
The long term Barometer dropped 2.00 to 35.60 yesterday. It remains Oversold.
TSX Momentum Barometers
The intermediate term Barometer dropped 2.52 to 57.98 yesterday. It changed from Overbought to Neutral on a move below 60.00.
The long term Barometer slipped 0.84 to 36.97 yesterday. It remains Oversold.
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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August 10th, 2022 at 9:04 am
Futures suggest a bid by SPX to clear the 4200 resistance level after a light inflation report. Everyone has been looking for a drop in the market and they are getting the opposite. If we get some short covering there could be quite a rally. Maybe.
August 10th, 2022 at 10:39 am
CP, CNR – Near their highs. Why are the railway companies rallying if we are supposedly going into a nasty recession?
F, GM – rallying – consumer spending
URI – rallying – construction industry
KBE – decisive neckline break
QQQ – downtrend line about to be broken.
SMH ?
Negative seasonal period starting. We live in interesting times.
August 10th, 2022 at 2:15 pm
Here is a chart of the $SPX with the $COMP and the DOW overlaid to show the difference in volatility along with their relationships to each other. The $SPX is trying to clear the June highs resistance of 41.77 which is also the 200ema. Price would need to “clear AND hold” above this level to be short term bullish and suggest a run up to the major downtrendline around 4325. Lots of work to do for the Indexes ahead. The key accomplishment would be for the $SPX to clear that downtrendline to suggest a run up to the January high. Lots of work to do to accomplish that feat. Meanwhile price is still below that downtrendline which is bearish. A close below 4177 in the near term would suggest a pullback to 4000. Lots of short covering today driving prices higher.
https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=2&mn=0&dy=0&id=p65198692205&a=939923011
August 10th, 2022 at 2:29 pm
tnx Larry and Ron…..missing Paula’s input….will be interested to see the AAII numbers to-morrow….
August 10th, 2022 at 4:12 pm
Energy – The correction in June got really overdone. We seem to have put in a nice bottom. Nat gas continues to be the outperformer. The companies putting out special dividends are obviously getting a lot of market favour when you have implied forward yields in excess of 10%.
August 10th, 2022 at 4:58 pm
Thanks bruce! Greetings all!
Nothing like having your name mentioned to inspire a response. Probably the same as everyone, I have been busy with family and friends – being more sociable and not watching the market as closely. BUT still checking in daily and noting closing prices.
Like Ron/BC, I see lots of resistance around these levels and as a result have been taking short term profits – more concerned about giving them back than trying to capture the last penny. Taking profits equals raising cash to have available in the next over sold opportunity. Much has been said about “bear market rallies” (mostly due to short covering) and that this rally looks like a typical one. Sometimes the market is in a trading range with no clear trend and that suits my “reversion to the mean” inclination. I am very conscious that the next couple of months are traditionally a dangerous time of year and this year for all the well known reasons, perhaps more so than usual. The risk seems greater than the possible reward at these levels at this time of year. Of course everything depends on your time frame. I still have a handful of stocks/ETFs as longer term investments. I am happy to collects dividends and very happy that I stopped trading options.
Ron/BC, thanks for your comparison chart in #3. Have you ever looked at the overlay “Price (same scale)”? I wonder if this is what we should be using for comparison charts. I don’t know. I remember a stockharts article about this quite a long time ago and could not find it.
August 10th, 2022 at 5:01 pm
I miss Ana. Where is Ana?
August 10th, 2022 at 5:30 pm
Paula
Oddly enough I’ve been wondering where Ana has been also. I’ll see what I can find on same scale comparisons but I do prefer what I posted rather than some complicated version of it.
August 10th, 2022 at 5:46 pm
Ron/BC
Ok, thanks. I like the chart you posted. I don’t know if “same scale” would make it more complicated. I just wonder what it would do and what its purpose is.
Thanks for the post a couple of days ago about the Tangerine 4.5 % GIC. I will suggest this to some people who want a guaranteed investment.
August 10th, 2022 at 5:55 pm
Paula
The reason I prefer a standard chart overlay is it shows how one index rises or falls stronger each way. I’d prefer to own the strongest one one a bounce up even though it won’t necessarily make more money. At least you end up as a winner rather than failing to catch a dead cat bounce that doesn’t go anywhere.
August 10th, 2022 at 6:15 pm
Ron/BC,
Here is a chart of the UUP which is an ETF for USD. Today it had a big gap down and broke below the 50EMA and is testing the B/O level ~ 28.21 and has been in a down trend since about mid July. I think you would say this is an important level but maybe that is too short term?
https://schrts.co/vdSVIBcw
August 10th, 2022 at 6:18 pm
Ron/BC,
re #10. Thanks. If you ever find out anything about same scale, let us know. Maybe someone else here understands it.
August 10th, 2022 at 6:27 pm
Larry,
Re #2: CP and CNR are stocks that I have owned and regretted selling. I might have bought some on the recent pullback but I already had enough ETFs and a few other stocks and did not want to add more. These are ones I would consider if there is another big market drawdown BUT probably would choose CNR. Very nice long term chart:
https://schrts.co/jygjzgDm
QQQ and SMH are trading vehicles for me. I try not to look at too many different stocks/ETFs. I would lose focus.
Re #5: Energy: I avoid trading natural gas – too volatile for me BUT I do own some CNQ and SU, which both pay dividends of over 4%. CNQ announced they are paying a special dividend of $1.50/share on August 31 but you have to own it before X-dividend date August 22 if you want the dividend. That is my understanding.
https://www.theglobeandmail.com/investing/markets/stocks/TOU-T/pressreleases/9518268/canadian-natural-resources-announces-special-dividend/
Here is an interview with Eric Nuttall that you might enjoy:
https://financialpost.com/commodities/energy/oil-gas/canadian-natural-resources-doubles-profit-special-dividend
August 10th, 2022 at 7:57 pm
Paula
Here is a long term chart of the $USD. Nice breakout and is still holding above that breakout point. A few weeks ago I was going to switch my U.S.$ in my RIF back to CD$ but was preoccupied and didn’t do it despite it being at a top short term. Doesn’t really matter though as I like the U.S.$ and have no faith in CD$ with the Government we have in Canada. Rates just might not want to go higher in the short term so I was planning to lock in some fairly descent interest rates. But I still feel better with U.S.$ in my RIF account regardless. The broad stock market needs a lot of work to repair the damage done and I wouldn’t bet a lot on it to recover strongly. And I’m not a F.O.M.O. type of person so it’s not a problem.
https://stockcharts.com/h-sc/ui?s=%24USD&p=W&st=1980-01-04&id=p36047385566&a=1158185444
https://stockcharts.com/h-sc/ui?s=%24USD&p=W&st=1980-01-04&id=p36047385566&a=1158185444