by Don Vialoux, EquityClock.com
Pre-opening Comments for Monday December 15th
U.S. equity index futures were higher this morning. S&P 500 futures were up 12 points in pre-opening trade.
Index futures eased slightly following release of the December Empire State Manufacturing Index. Consensus was an increase to 12.0 from 10.6 in November. Actual was a decline of 3.7.
PetSmart jumped $3.73 to $81.40 after the company received a takeover offer valued at $8.3 billion. Price of the offer is $83 per share.
Allergan slipped $0.47 to $208.00 after Goldman Sachs and Stifel Nicolaus downgraded the stock to Hold from Buy.
Ford eased $0.09 to $14.90 after Deutsche Bank downgraded the stock to Hold from Buy. Target is $16.
Oracle added $0.85 to $40.80 after Morgan Stanley upgraded the stock to Overweight from Equal Weight. Target is $50
UPS (UPS $110.00) is expected to open lower after Deutsche Bank downgraded the stock to Hold from Buy. Target is $116.
Exxon Mobil added $0.87 to $87.47 after BMO Capital upgraded the stock to Market Perform from Underperform. Target is $95.
EquityClock’s Daily Market Comment
Following is a link:
http://www.equityclock.com/2014/12/15/stock-market-outlook-for-december-15-2014/
Note comment on performance of the TSX Composite from December 18th to March 7th
Economic News This Week
December Empire Manufacturing Index to be released at 8:30 AM EST on Monday is expected to increase to14.0 from10.2 in November
November Industrial Production to be released at 9:15 AM EST on Monday is expected to increase 0.7% versus a decline of 0.1% in October. November Capacity Utilization is expected to increase to 79.3% from 78.9% in October
November Housing Starts to be released at 8:30 AM EST on Tuesday are expected to increase to 1,035,000 units from 1,009,000 in October.
November Consumer Price Index to be released at 8:30 AM EST on Wednesday is expected to decline 0.1% versus no change in October. Excluding food and energy, CPI is expected to increase 0.1% versus a gain of 0.2% in October.
FOMC meeting decision to be released at 2:00 PM EST on Wednesday is expected to maintain the overnight lending rate to major banks at 0%-0.25%. Watch for signs about timing of the first increase in the overnight lending rate.
Weekly Initial Jobless Claims to be released at 8:30 AM EST on Wednesday are expected to dip to 292,000 from 294,000 last week
December Philadelphia Fed Index to be released at 10:00 AM EST on Thursday is expected to fall to 26.5 from 40.8 in October.
November Leading Economic Indicators to be released at 10:00 AM EST on Thursday are expected to increase 0.5% versus a gain of 0.9% in October.
November Canadian Consumer Price Index to be released at 8:30 AM EST on Friday is expected to decline 0.2% versus a gain of 0.1% in October. On a year-over-year basis, November CPI is expected to increase 2.3% versus a gain of 2.4% in October.
October Canadian Retail Sales to be released at 8:30 AM EST on Friday are expected to decline 0.4% versus a gain of 0.8% in September.
Earnings News This Week
Summary of Weekly Seasonal/Technical Parameters for Equity Indices/ETFs
Seasonal: Positive, Negative or Neutral on a relative basis applying EquityClock.com charts
Trend: Up, Down or Neutral
Strength relative to the S&P 500 Index: Positive, Negative or Neutral
Momentum based on an average of Stochastics, RSI and MACD: Up, Down or Mixed
Green: Upgrade
Red: Downgrade
The S&P 500 Index dropped 73.04 points (3.52%) last week. Intermediate trend remains up. Units fell below their 20 day moving average. Short term momentum indicators are trending down.
Percent of S&P 500 stocks trading above their 50 day moving average plunged last week to 66.00% from 83.60%. Percent is intermediate overbought and trending down.
Percent of S&P 500 stocks trading above their 200 day moving average dropped to 68.80% from 79.60%. Percent is intermediate overbought and trending down.
Bullish Percent Index for S&P 500 stocks fell last week to 72.60% from 76.20% and fell below its 20 day moving average. The Index is intermediate overbought and trending down.
Bullish Percent Index for TSX Composite stocks dropped last week to 46.02% from 51.79% and remained below its 20 day moving average. The Index remains in an intermediate downtrend.
The TSX Composite Index plunged 741.80 points (5.13%) last week. Intermediate trend changed to neutral from up on a move below 14,327.02 (Score: 0.5). The Index remains below its 20 day moving average (Score: 0.0). Strength relative to the S&P 500 Index remains negative (Score: 0.0). Technical score slipped to 0.5 from 1.0 out of 3.0. Short term momentum indicators are trending lower, but are oversold.
Percent of TSX stocks trading above their 50 day moving average dropped last week to 31.87% from 43.33%. Percent continues to trend down.
Percent of TSX stocks trading above their 200 day moving average dropped last week to 32.27% from 38.25%. Percent continues to trend down.
The Dow Jones Industrial Average plunged 677.96 points (3.78%) last week. Intermediate trend remains up. The Average fell below its 20 day moving average. Strength relative to the S&P 500 Index remains neutral. Technical score dropped to 1.5 from 2.5 out of 3.0. Short term momentum indicators are trending down.
Bullish Percent Index for Dow Jones Industrial Average stocks slipped last week to 80.00% from 86.67% and fell below its 20 day moving average. The Index is intermediate overbought and showing signs of rolling over.
Bullish Percent Index for NASDAQ Composite stocks slipped last week to 54.31% from 55.76%.and fell below its 20 day moving average. The Index is intermediate overbought and showing signs of rolling over.
The NASDAQ Composite Index fell 127.15 points (2.66%) last week. Intermediate trend remains up. The Index fell below its 20 day moving average. Strength relative to the S&P 500 Index remains positive. Technical score slipped to 2.0 from 3.0 out of 3.0. Short term momentum indicators are trending down.
The Russell 2000 Index lost 29.99 points (2.54%) last week. Intermediate trend remains neutral. The Index fell below its 20 day moving average. Strength relative to the S&P 500 Index changed to positive from neutral. Technical score slipped to 1.5 from 2.0 out of 3.0. Short term momentum indicators are trending down.
The Dow Jones Transportation Average lost 315.12 points (3.46%) last week. Intermediate trend remains up. The Average fell below its 20 day moving average. Strength relative to the S&P 500 Index remains neutral. Technical score slipped to 1.5 from 2.5 out of 3.0. Short term momentum indicators are trending down.
The Australia All Ordinaries Index dropped 116.70 points (2.20%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remained at 0.0 out of 3.0. Short term momentum indicators are trending down.
The Nikkei Average dropped 548.87 points (3.06%) last week. Intermediate trend remains up. The Average fell below its 20 day moving average. Strength relative to the S&P 500 Index remains positive. Technical score dropped to 2.0 from 3.0 out of 3.0 Short term momentum indicators are trending down.
iShares Europe plunged $2.43 (5.41%) last week. Intermediate trend changed to neutral from up on a move below $43.20. Units fell below their 20 day moving average. Strength relative to the S&P 500 Index changed to negative from neutral. Technical score dropped to 0.5 from 2.5. Short term momentum indicators are trending down.
The Shanghai Composite Index added 0.52 (0.02%) last week. Intermediate trend remains up. The Index remains above their 20 day moving average. Strength relative to the S&P 500 Index remains positive. Technical score remains at 3.0 out of 3.0. Short term momentum indicators are overbought and showing early signs of trending down.
iShares Emerging Markets dropped $2.54 (6.21%) last week. Trend changed to down from neutral on a move below $39.68. Units remain below their 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score dropped to 0.0 from 0.5 out of 3.0. Short term momentum indicators are trending down and are oversold.
Currencies
The U.S. Dollar Index fell 1.03 (1.15%) last week. Intermediate trend remains up. The Index remains above its 20 day moving average. Short term momentum indicators are trending down. Early signs of an intermediate peak have appeared.
The Euro gained 1.67 points (1.36%) last week. Intermediate trend remains down. The Euro moved above its 20 day moving average. Short term momentum indicators are trending up. Early signs of a bottom have appeared.
The Canadian Dollar lost US 1.04 cents (1.19%) last week. Intermediate trend remains down. The Canuck Buck remains below its 20 day moving average. Short term momentum indicators are trending down, but are oversold.
The Japanese Yen added 1.91 (2.32%) last week. Intermediate trend remains down. The Yen remains below its 20 day moving average. Short term momentum indicators are trending up.
Commodities
Summary of Weekly Seasonal/Technical Parameters for Commodity Indices/ETFs
Seasonal: Positive, Negative or Neutral on a relative basis applying EquityClock.com charts
Trend: Up, Down or Neutral
Strength relative to the S&P 500 Index: Positive, Negative or Neutral
Momentum based on an average of Stochastics, RSI and MACD: Up, Down or Mixed
Green: Upgrade
Red: Downgrade
The CRB Index dropped 8.58 points (3.40%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remains at 0.0 out of 3.0.
Gasoline dropped $0.16 per gallon (9.09%) last week. Trend remains down. Gas remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative.
Crude oil dropped another $8.03 per barrel (12.20%) last week. Intermediate trend remains down. Crude remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Short term momentum indicators are trending down, but are oversold.
Natural gas added $0.02 per MBtu (0.53%) last week. Intermediate trend remains neutral. “Natty” remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remains at 0.5 out of 3.0. Short term momentum indicators are trending down, but are oversold and showing early signs of bottoming.
The S&P Energy Index plunged 47.63 points (8.05%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remained at 0.0 out of 3.0. Short term momentum indicators are trending down, but are oversold.
The Philadelphia Oil Services Index dropped 15.45 points (7.33%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remains at 0.0 out of 3.0. Short term momentum indicators are trending down, but are oversold.
Gold gained $29.90 per ounce (2.51%) last week. Intermediate trend remains down. Gold remains above its 20 day moving average. Strength relative to the S&P 500 Index changed to positive from neutral. Technical score improved to 2.0 from 1.5. Short term momentum indicators are trending up.
Silver jumped $0.78 (4.79%) last week. Intermediate trend changed to up from neutral after Silver moved above $16.69. Silver remains above its 20 day moving average. Strength relative to the S&P 500 Index changed to positive from neutral. Technical score increased to 3.0 from 1.5 out of 3.0. Short term momentum indicators are trending up. Strength relative to Gold changed to positive from neutral.
The AMEX Gold Bug Index slipped 0.62 (0.37%) last week. Intermediate trend remains down. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains neutral. Technical score remained at 0.5 out of 3.0. Short term momentum indicators remains mixed. Strength relative to Gold changed to negative from neutral.
Platinum added $2.10 per ounce (0.07%) last week. Trend remains down. PLAT remains above its 20 day MA. Relative strength changed to positive. Strength to Gold turned negative.
Palladium gained $14.90 per ounce (1.86%) last week. Trend remains up. PALL remains above its 20 day MA. Strength relative to the S&P 500 Index and Gold remains positive. Technical score remains at 3.0 out of 3.0. Short term momentum indicators changed to positive
Copper added $0.02 per lb. (0.68%) last week. Intermediate trend remains down. Copper remains below its 20 day moving average. Strength relative to the S&P 500 Index changed to positive from negative. Technical score improved to 1.0 from 0.0 out of 3.0. Short term momentum indicators are trending up.
The TSX Metals and Mining Index dropped 61.19 points (8.92%) last week. Intermediate trend changed to down from up on a move below 654.09. The Index remains below its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Short term momentum indicators are trending down, but are oversold.
Lumber gained $2.30 (0.68%) last week. Intermediate trend remains down. Lumber remains above its 20 day moving average. Strength relative to the S&P 500 Index remains positive.
The Grain ETN added $0.74 (1.90%) last week. Intermediate trend remains up. Units remain above their 20 day moving average. Strength relative to the S&P 500 Index changed to positive from neutral. Technical score improved to 3.0 from 2.5 out of 3.0.
The Agriculture ETF fell $2.14 (3.89%) last week. Intermediate trend remains up. Units fell below their 20 day moving average. Strength relative to the S&P 500 Index remains negative. Short term momentum indicators are trending down.
Interest Rates
The yield on 10 year Treasuries fell 20.4 basis points (8.84%) last week. Intermediate trend remains down. Yield remains below its 20 day moving average. Short term momentum indicators are trending down.
Conversely, price of the long term Treasury ETF gained $5.21 (4.30%) last week. Intermediate trend remains up. Units remain above their 20 day moving average.
Other Issues
The VIX Index jumped 9.26 (78.34%) last week. Intermediate trend remains up. The Index moved above its 20 day moving average.
Earnings news for most Canadian and U.S. companies has entered the quiet period prior to release of fourth quarter results. Focus this week is on FedEx and Oracle with honorable mention to Blackberry.
Economic focus this week is on the FOMC meeting on Wednesday. Traders are waiting for guidance on timing of the inevitable increase in the Fed Fund rate. Other news is expected to confirm a steady improvement in the U.S. economy.
Tax loss selling pressures reach their maximum this week. Energy and mining stocks are most vulnerable.
The strongest period of strength for the year starts this week and continues until the first week in January. Here comes Santa Claus! Following is a link to a report released on Friday at www.equityclock.com that provides background:
http://www.equityclock.com/2014/12/11/stock-market-outlook-for-december-12-2014/
Short and intermediate technical indicators for most markets and sectors are trending down.
The Bottom Line
Preferred strategy is to hold seasonally attractive equity positions and to add to positions on weakness (including precious metals and precious metals equities). Other preferred sectors include Consumer Discretionary, Industrials and Technology. A new sector to watch is the Small Cap sector, a sector that turns seasonally positive this week for a move into early March.
Special Free Services available through www.equityclock.com
Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices. To login, simply go to http://www.equityclock.com/charts/
Following is an example:
^RUT Relative to the S&P 500 |
Monitored List of Technical/Seasonal Ideas
Green: Increased score
Red: Decreased score
A score of 1.5 or higher is needed to maintain a position
Disclaimer: Comments, charts and opinions offered in this report by www.timingthemarket.ca and 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. Don and Jon Vialoux are Research Analysts with Horizons ETFs Management (Canada) Inc. All of the views expressed herein are the personal views of the authors and are not necessarily the views of Horizons ETFs Management (Canada) Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by Horizons ETFs Management (Canada) Inc.
Individual equities mentioned in StockTwits are not held personally or in HAC.
Horizons Seasonal Rotation ETF HAC December 12th 2014
Copyright © Don Vialoux, EquityClock.com
