Pre-opening Comments for Tuesday January 2^nd 2024

U.S. equity index futures were lower this morning. S&P 500 futures were down 40 points at 8:30 AM EST.

Apple dropped $3.28 to $189.25 after Barclay’s downgraded the stock to from Equal Weight to Under Weight. Target was reduced to $160.

Inspire Medical dropped $2.48 to $200.95 after Stifel Nicloaus downgraded the stock from Buy to Hold.

Helmrich & Payne slipped $0.22 to $36.23 after Seaport Research downgraded the stock from Buy to Neutral.

Exact Sciences added $0.49 to $74.47 after Benchmark upgraded the stock from Hold to Buy.

 

The Bottom Line

For 2024, look for North American equity markets to follow the U.S. Presidential Election cycle. The Dow Jones Industrial Average in the fourth year of the U.S. Presidential Election years since 1930 has a history of moving higher. Average return per period is 8.0%. However, “Mind the Gap”. The 8% gain also includes a period of weakness averaging 1.8% from January 4^th to March 14^th. Given current extremely overbought levels (based on Percent of S&P 500 stocks trading above their 50 and 200 day moving averages), probability of a mild correction between January 4^th and March 14^th this year is high. See Momentum Barometers for S&P 500 and TSX stocks at the end of this report. Weakness into the correction will provide a renewed buying opportunity.

Chart courtesy of www.equityclock.com

 

Economic News This Week

November Construction Spending released at 10:00 AM EST on Tuesday is expected to increase 0.5% versus a gain of 0.6% in October.

December ISM Manufacturing PMI released at 10:00 AM EST on Wednesday is expected to increase to 47.1 from 46.7 in November

December Non-farm Payrolls released at 8:30 AM EST on Friday is expected to drop to 158,000 from 199,000 in November. December Unemployment Rate is expected to increase to 3.8% from 3.7% in November. December Average Hourly Earnings are expected to increase 0.3% versus a gain of0.4% in November. On a year-over-year basis, December Average Hourly Earnings are expected to increase 3.9% versus a gain of 4.0% in November.

December Canadian Employment Change released at 8:30 AM EST on Friday is expected to increase 13,200 versus a gain of 24,900 in November. December Unemployment Rate is expected to increase to 5.9% from 5.8% in November.

November Factory Orders released at 10:00 AM EST on Friday are expected to increase 1.5% versus a drop of 3.6% in October.

December ISM Non-Manufacturing PMI released at 10:00 AM EST on Friday is expected to slip to 52.5 from 52.7 in November.

 

Selected Earnings News This Week

 

Trader’s Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for Dec.29^th 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 Dec.29^th 2023

Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for Dec.29^th 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

 

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 from Friday

Travelers $TRV a Dow Jones Industrial Average stock moved above $190.15 to an all-time high extending an intermediate uptrend.

Loblaw Companies $L.TO a TSX 60 stock moved above Cdn$127.82 to an all-time high extending an intermediate uptrend.

 

Links offered by valued providers

Mark Leibovit comment on December 28^th

https://www.howestreet.com/2023/12/new-excitement-in-the-bond-market-mark-leibovit/

 

Michael Campbell’s Money Talks Year-end Special

The MoneyTalks Year End Special (mikesmoneytalks.ca)

 

These Stocks Are Looking Good As We Move Into 2024: Tom Bowley

These Stocks Are Looking Good As We Move Into 2024 | Trading Places with Tom Bowley | StockCharts.com

 

Intermediate-Term Participation Levels Are Very Overbought, and They Are Weak Long-Term: Carl Swenlin

Intermediate-Term Participation Levels Are Very Overbought, and They Are Weak Long-Term | DecisionPoint | StockCharts.com

 

IWM Shares Outstanding Rises With Small-Cap Interest: Tom McClellan

IWM Shares Outstanding Rises With Small-Cap Interest | Top Advisors Corner | StockCharts.com

 

STRONG Indicators for 2024! | Moxie Indicator Minutes (12.29.23)

STRONG Indicators for 2024! | Moxie Indicator Minutes (12.29.23) – YouTube

 

Don’t Miss These! TOP Sector and Industry PICKS for 2024 | The MEM Edge (12.29.23)

https://www.youtube.com/watch?v=Dn9tlSMd4yI

 

Is it Time to Get Into Gold Again? Bob Hoye

Is it Time to Get Into Gold Again? – HoweStreet

 

Market Performance by Major North American Indices in 2023

 

S&P 500 Momentum Barometers

The intermediate term Barometer added 0.40 on Friday and was unchanged last week at 90.00. It remains extremely Overbought.

The long term Barometer slipped 0.60 on Friday, but added 2.00 last week to 78.40. It remains Overbought.

 

TSX Momentum Barometers

The intermediate term Barometer added 1.33 on Friday and was unchanged last week at 74.67. It remains Overbought.

The long term Barometer slipped 0.44 on Friday and dropped 1.34 last week. 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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