Pre-opening Comments for Monday September 18th
U.S. equity index futures were lower this morning. S&P 500 futures were down 6 points at 8:30 AM EDT.
Walt Disney added $0.25 to $85.83. Raymond James launched coverage with an Outperform rating and a $97 target price.
DoorDash added $1.77 to $82.70 after Mizuho upgraded the stock from Neutral to Buy.
![clip_image002[5]](https://timingthemarket.ca/techtalk/wp-content/uploads/2023/09/clip_image0025-1.png "clip_image002[5]")
Dropbox fell $0.61 to $26.34 after William Blair downgraded the stock
Clorox dropped $2.26 to $143.94 after warning that a cyberattack will impact fiscal first quarter results.
![clip_image004[5]](https://timingthemarket.ca/techtalk/wp-content/uploads/2023/09/clip_image0045-1.png "clip_image004[5]")
EquityClock’s Daily Comment
Headline reads “Equity market looking toppy heading into the historically weakest time of year”.
https://equityclock.com/2023/09/16/stock-market-outlook-for-september-18-2023/
Technical Scoop
The Bottom Line
History suggests that short term caution is warranted for a new investment in North American equity markets. According to www.EquityClock.com , “The weakest time of year for stocks is at our doorstep, encompassing the final weeks in the third quarter. Between September 19th and the last day of the month on September 30th, the S&P 500 Index has lost an average of 1.14% per period with 32 of the past 50 (64%) periods showing a decline”
Ditto for the TSX Composite Index! During the past 20 periods, the Index has dropped by an average of 1.7% per period.
Consensus for Earnings and Revenues for S&P 500 Companies
Source: www.Factset.com
Consensus estimates for remainder of 2023 and 2024 moved slightly lower last week. Consensus for the third quarter is an earnings increase on a year-over-year basis of 0.2% (versus previous increase of 0.5%). Third quarter revenues are expected to increase 1.5% (versus previous increase of 1.6%). Fourth quarter earnings are expected to increase 8.2%. Fourth quarter revenues are expected to increase 3.7%. For all of 2023, consensus calls for an earnings increase of 1.2%. Revenues are expected to increase 2.4%.
The recovery continues into 2024, but at a slower than previous rate. Consensus for the first quarter on a year-over-year basis is an earnings increase of 8.2 % (versus previous estimate of 8.6%) and a revenue increase of 3.7% (versus previous estimate of 4.7%). Consensus for the second quarter is an earnings increase of 12.1% and a revenue increase of 5.5%. Consensus for all of 2024 is an increase in earnings of 12.0% (versus previous estimate at 12.2%) and a 5.6% increase in revenues.
Economic News This Week
Source: www.Investing.com
Focus is on results of the FOMC meeting released on Wednesday.
August Canadian Housing Starts released at 8:15 AM on Monday are expected to drop to 245,300 from 255,000 in July.
August U.S. Housing Starts released at 8:30 AM EDT on Tuesday are expected to ease to 1.440 million units from 1.452 million units in July.
Canadian August Consumer Price Index released at 8:30 AM EDT on Tuesday is expected to increase 0.2% versus a gain of 0.6% in July. On a year-over-year basis, August CPI is expected to increase 3.8% versus a gain of 3.3% in July.
FOMC Decision on interest rates released at 2:00 PM EDT on Wednesday is expected to maintain the Fed Fund Rate at 5.5%. Press conference is held at 2:30 PM EDT.
September Philly Fed Index released at 8:30 AM EDT on Thursday is expected to improve to -1.0 from -12.0 in August.
August U.S. Existing Home Sales released at 10:00 PM EDT on Thursday are expected to increase to 4.10 million units from 4.07 million units in July.
August U.S. Leading Economic Indicators released at 10:00 AM EDT on Thursday are expected to slip 0.3% versus a drop of 0.4% in July.
July Canadian Retail Sales released at 8:30 AM EDT on Friday are expected to increase 0.4% versus a gain o 0.1% in June. Excluding auto sales, July Retail Sales are expected to increase 0.5% versus a drop of 0.8% in June.
Selected Earnings News This Week
Source: www.Investing.com
Six S&P 500 companies and no TSX 60 companies are scheduled to release quarterly results this week.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for September 15th 2023
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 September 15th 2023
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for September 15th 2023
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
Links offered by valued providers
Timeless Lessons From The Godfather of Technical Analysis | The Final Bar (09.14.23)
Timeless Lessons From The Godfather of Technical Analysis | The Final Bar (09.14.23) – YouTube
Strong fundamentals anchor uranium’s rise: Sprott Securities
Sprott Uranium Report: Strong Fundamentals Anchor Uranium’s Rise
Three ETFs Suggest Further Downside SEPTEMBER 15, 2023 David Keller
Three ETFs Suggest Further Downside | The Mindful Investor | StockCharts.com
Bob Hoye Sep 15, 2023: Foreign investors losing faith in China
Foreign Investors Losing Faith in China
Josef Schachter Sep 14, 2023: $90 Crude may mean time to back off oil stocks
$90 Crude May Mean Time to Back Off Oil Stocks
Mark Leibovit Sep 14, 2023: Gold suffering from strong U.S. Dollar
Gold Suffering from Strong US Dollar
Victor Adair Sep 16, 2023: Trading Desk Notes for September 15th 2023
Trading Desk Notes For September 15, 2023
Technical Notes for Friday September 15th
S&P 500 Index closed below its 20 and 50 day moving averages on Friday.
The technology sector led the decline in U.S. equity indices on Friday. Big cap technology stocks breaking intermediate support included Netflix, Copart, KLA Inc, Microchip Technologies and Lam Research.
Netflix $NFLX a NASDAQ 100 stock moved below $398.15 extending an intermediate downtrend.
Copart $CPRT a NASDAQ 100 stock moved below $42.93 completing a Head & Shoulder pattern.
KLA Inc $KLA a NASDAQ 100 stock moved below intermediate support at $468.13 completing a double top pattern.
Microchip Technology $MCHP a NASDAQ 100 stock moved below $77.19 setting an intermediate downtrend.
Lam Research $LRCX a NASDAQ 100 stock moved $637.54 completing a double top pattern.
DexCom $DXCM a NASDAQ 100 stock moved below $98.02 extending an intermediate downtrend.
Peloton $PTON a NASDAQ 100 stock moved below $5.05 extending an intermediate downtrend.
Interesting Chart
As Apple goes, so goes major U.S. equity indices! Apple is the stock with the highest weight in the S&P 500 Index, NASDAQ 100 Index and NASDAQ Composite Index. The stock’s price change has a significant impact on the performance and trend of these major equity indices. Apple has a history of moving lower briefly after release of new product launches in mid-September. Technical signs of weakness in Apple appeared last week:
- Daily momentum indicators (Stochastics, RSI, MACD) turned down.
- Strength relative to the S&P 500 Index turned negative.
- A move below $171.96 will complete a double top pattern
- A break by Apple below $171.96 likely will have a significant negative impact on broadly based U.S. equity indices.
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 6.20 on Friday and 0.80 last week to 34.20. It remains Oversold.
The long term Barometer slipped 1.20 on Friday but added 4.20 last week to 54.40. It remains Neutral.
TSX Momentum Barometers
The intermediate term Barometer slipped 0.44 on Friday, but gained 8.41 last week to 56.64. It remains Neutral.
The long term Barometer added 2.65 on Friday and 7.08 last week to 55.31. It remains Neutral.
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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Equity Clock Publications