Pre-opening Comments for Friday July 12th
U.S. equity index futures were mixed this morning. S&P 500 futures were unchanged at 8:35 AM EDT
S&P 500 futures were unchanged following release of the June U.S. Producer Price Index at 8:30 AM EDT. Consensus was an increase 0.1% versus downwardly revised unchanged in May. Actual was an increase of 0.2%. On a year-over-year basis, June PPI was expected to increase 2.3% versus a gain of 2.1% in May. Actual was an increase of 2.6%. Excluding food and energy, June PPI was expected to increase 0.2% versus unchanged in May. Actual was an increase of 0.4%. On a year-over-year basis, core PPI was expected to increase 2.5% versus a gain of 2.3% in May. Actual was a gain of 3.0%.
Tesla dropped $2.97 to $238.05 after the company delayed launch of its driverless system from August to October. UBS downgraded the stock.
Wells Fargo dropped $3.42 to $56.74 after second quarter earnings came in less than consensus.
Bank of New York Mellon added $0.41 to $61.88 after reporting higher than consensus second quarter revenues and earnings.
EquityClock’s Stock Market Outlook for July 12th
The revelation of the start of a disinflationary path may have been the catalyst to unleash the third quarter bond trade that is seasonally typical during the period of volatility for stocks.
See: https://equityclock.com/2024/07/11/stock-market-outlook-for-july-12-2024/
Technical Notes
TSX Composite Index closed at an all-time closing high.
MSCI EAFE $EFA moved above $80.75 to an all-time high extending an intermediate uptrend.
MSCI Israel iShares $EIS moved above $64.38 extending an intermediate uptrend
NASDAQ Biotech iShares $IBB moved above $141.03 extending an intermediate uptrend.
U.S. Broker iShares $IAI moved above $120.00 to an all-time high extending an intermediate uptrend.
Major U.S. Bank iShares $KBE moved above $47.96 extending an intermediate uptrend.
Gold Equity ETF $GDX moved above $37.47 extending an intermediate uptrend. Junior Gold ETF $GDXJ moved above $40.25 extending an intermediate uptrend.
S&P 100 and NASDAQ 100 stocks moving above resistance extending an intermediate uptrend included Philip Morris on a move above $103.50, Electronic Arts on a move above $144.31, Biogen on a move above $237.44, Bank of New York Mellon on a move above $60.87, Amgen on a move above $326.12, Regeneron on a move above $1,081.17 and Ross Stores moved above $150.36.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for July 11th 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 11th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for July 11th 2024
Green: Increase from previous day
Red: Decrease from previous day
Comments offered by valued providers
Simple RSI Trend Strategy: Entry BEFORE a Breakout! Joe Rabil
Simple RSI Trend Strategy: Entry BEFORE a Breakout! – YouTube
Powell ‘sets table’ for rate cut before 2% inflation target
Powell ‘sets table’ for rate cut before 2% inflation target – YouTube
Analyst predicts Big Tech winners and losers of Q2 earnings
Analyst predicts Big Tech winners and losers of Q2 earnings – YouTube
S&P 500 Momentum Barometers
The intermediate term Barometer jumped 11.80 to 63.40. It changed from Neutral to Overbought on a move above 60.00.
The long term Barometer added 3.00 to 71.00. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer jumped 9.29 to 73.89. It remains Overbought. Daily trend remains up.
The long term Barometer added 3.54 to 76.99. It remains Overbought. Daily trend remains up.
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 12th, 2024 at 11:47 am
BMO.to has typically bounced back from its lows around $114. The RSI 8 has been showing positive divergences for over a month now. The rally might just be mainly short covering but a rally is a rally. The point being never short a stock that is showing positive divergences.
https://stockcharts.com/h-sc/ui?s=BMO.TO&p=D&yr=0&mn=8&dy=0&id=p73172059305&a=1721017885
July 12th, 2024 at 11:56 am
BNS.to is responding the same way that BMO.to is. Price rallied back several dollars clearing its downtrendline after showing a positive divergence on the RSI 8. The point being never short a stock showing a positive divergence.
https://stockcharts.com/h-sc/ui?s=BNS.TO&p=D&yr=0&mn=6&dy=0&id=p40944320300&a=772466157
July 12th, 2024 at 12:41 pm
Canadian Banks – It’s been a two and a half year bear market that they haven’t broken out of since the ZEB peak in Feb 2022. Should ZEB break through 38.49 that would be a huge buy signal. I’m keeping this trade in my back pocket for November.
Javed Mirza technical analysis on BNN today – caught some of the program and I will go to the replay. He’s good. It’s worth a look and he went over the banks.
July 12th, 2024 at 2:08 pm
FFH – Classic four month consolidation chart with a break out today. It fits into the idea of rotation into value stocks in a broadening of the market but by no means would I say the tech rally is over at all.
July 12th, 2024 at 3:38 pm
RE: Canadian Banks: It seems they are all rallying, even TD, which is now above its 200EMA with the 50EMA turning up.
Ron/BC, I just substituted TD for BMO in your chart.
https://schrts.co/UBzUrDBI
Which, along with the oils and golds is allowing XIU.TO to make a new all time high:
https://schrts.co/eUAXHweV
July 12th, 2024 at 4:24 pm
Paula
Thanks for the charts. The expression of: “If it’s obvious, it’s obviously wrong.” Has always been a great guide for all my investments including real estate. Combine that with the charts and you can’t go too far wrong with both.
July 12th, 2024 at 4:36 pm
Ron/BC,
Re: #6: Please elaborate. It’s not obvious to me what you mean in this case.
July 12th, 2024 at 7:47 pm
Paula
Well when everyone and the news media is raving about a stock and it has become “The Bell of the Ball” stock, that tends to be at the very least a price high in the stock. The reason is everyone is on board the stock especially “dumb money” which is the general public. There is no one left to buy, or rather no rational persons left to buy. Many people like to fall in love with a winning stock and consider buying more of that stock much like a love affair rather than a rational purchase. They need to tell everyone how smart they are by owning the stock everyone is raving about. The stock then tends to sell off as smart money sees this and shorts the stock heavily. Lots of smart traders on Wall Street and elsewhere that can spot b.s. in a heart beat. The stock sells off and dumb money tends to exit the stock then to save some of their money. Plus they don’t look so smart anymore to their piers. Or they’ll hang on to the stock as it plunges and say ‘they are in it for the long haul”. Can’t be criticized for that so they think. The higher the stock goes the smarter they look and less cautious they become.. Remember NORTEL and dozens of others like that???? Or real estate at a price high. EVERYONE just has to buy a condo or house then with prices soaring regardless of price or interest rates. Then it all comes crashing down. It’s just plain human nature. They just can’t help themselves. Think about how you feel when stocks or real estate is soaring. Our emotions are all the same.. You just have to recognize the feelings you have for what they are. They are an excellent signal to invest in or exit in.
July 12th, 2024 at 8:04 pm
Paula
As far as the Banks go notice the RSI 8 rising with falling prices. That is telling you the price momentum is improving with a falling price even if slightly. That is dumb money getting stopped out at a low price as they can’t mentally hold on anymore. Don’t blame them for reducing their losses but a bit late in the game for them. To prove this to your self look at any chart and mark the RSI 8 when below 30 and then re-crossing back above the 30 line with a vertical line over the chart there. Not perfect but often is a price low in that stock. If you play around with it there are likely other indicators you prefer to use to time the signals even better. Some signals are not that great but that’s what stop losses are for. And there are better looking charts that are more obvious than others.
July 13th, 2024 at 2:51 pm
Paula
Here is a large 2 year chart of TD.to. If all you did was buy when the RSI 8 was re-crossing back above the 30 line and sold when that line re-crossed back below the 70 line, how bad would things have been. Answer: not all that bad……………..
July 13th, 2024 at 2:52 pm
Paula
Here is the chart RE: #10 Post.
https://stockcharts.com/h-sc/ui?s=TD.TO&p=D&yr=2&mn=0&dy=0&id=p56622604997&a=683824460
July 13th, 2024 at 4:35 pm
Ron/BC
Thanks for your comments and the TD.TO chart. Once again you have shown that the RSI 8 is a valuable indicator when used in conjunction with some patience and commonsense (stoploss). I have never liked to talk to people about stocks I have made money on. It is bragging which brings about a downfall, one way or another. I have also never liked to jump on board a momentum stock. I don’t believe in “stories” and I expect it to fall to earth, eventually, which has led to me missing out on a lot of gains. I have tried and am still trying to stay with a winning trade but at heart, I am more of a reversion to the mean trader than a momentum trader. So, your RSI 8 indicator suits me.
July 13th, 2024 at 7:51 pm
Paula
I am tempted to short TD.to now with the RSI 8 well over the 70 line. But price can go higher and the signal is not generated until it crosses back below the 70 line. I do have a problem with perfection and I could easily short it here and not be concerned with perfection. Odds are it has had a run most traders will be happy with. And the short sellers out there will likely be interested in shorting it here. That’s what the chart is saying. But I don’t like to over think it either. I am a trader at heart and not a long term investor. In the long term we are all dead too…………. Notice how well the sell signals work on the RSI 8 when crossing back below the 70 line. The best charts to use are stocks that are not complete basket cases and tend to trend up and down and have a steady following. Banks are good.
July 14th, 2024 at 9:44 pm
Ron/BC
Interesting to hear how you think through a potential trade. Thanks.
July 14th, 2024 at 10:19 pm
Paula
The next time you go to buy some expensive item or condo make them an offer 10% to 20% less than the asking price. Worst that can happen is they will counter offer a little higher than your low ball offer. Most people will accept your offer especially if it’s cash or very simple. My last condo I saved $25K doing that which paid for any renovations needed. Just don’t fall in love with the place or it will cost you far too much. Works especially well with anything 2nd hand.You won’t hurt their feelings as they want your money and to get rid of their stuff.