All 10 Sectors Overbought – Dow Trading Range Screen

Friday, March 15th, 2013

by Bespoke Investment Group

Today’s continuation of the rally has left the S&P 500 and all ten sectors in overbought territory.  You can see the across-the-board overbought levels in our trading range screen below.  Heading into tomorrow, Financials and Technology — the two largest sectors of the market — are the most overbought.

All but six of the thirty Dow stocks are trading in overbought territory as well.  Boeing (BA) is currently the most overbought Dow stock, followed closely by IBM, Du Pont (DD) and Hewlett-Packard (HPQ).  The two Dow stocks that have managed to trade into oversold territory during this gravity-defying run-up are Alcoa (AA) and Caterpillar (CAT).  These are the only two Dow stocks that are down year to date as well.

Interested in running your portfolio through our trading range screen on a regular basis?  Become a Premium Plus subscriber today!

Copyright © Bespoke Investment Group

Tags: Bespoke, dow trading range, Sectors
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Cautious Bullish Stance Appropriate – Accumulate the Stronger Seasonal Sectors

Monday, August 20th, 2012

by Don Vialoux, TechTalk

Economic News This Week

FOMC minutes for the July 31st /August 1^st meeting are released at 2:00 PM EDT on Tuesday.

June Canadian Retail Sales to be released at 8:30 AM EDT on Wednesday are expected to increase 0.1% versus a gain of 0.3% in June.

July Existing Home Sales to be released at 10:00 AM EDT on Wednesday are expected to increase to 4.55 million units from 4.37 million units in June.

Weekly Initial Jobless Claims to be released at 8:30 AM EDT on Thursday are expected slip to 365,000 from 366,000 last week.

July New Home Sales to be released at 10:00 AM EDT on Thursday are expected to increase to 368,000 from 350,000 in June.

July Durable Goods Orders to be released at 8:30 AM EDT on Friday are expected to increase 2.5% versus a gain of 1.3% in June. Excluding transportation, Goods are expected to increase 0.5% versus a decline of 1.4% in June.

Earnings Reports This Week

Equity Trends

The S&P 500 Index added 12.29 points (0.87%) last week. Intermediate trend changed from down to neutral on a break above resistance at 1,415.23. Next resistance is at 1,422.38. The Index remains above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking.

Percent of S&P 500 stocks trading above their 50 day moving average increased last week to 81.40% from 80.20%. Percent is intermediate overbought, but has yet to show signs of peaking. Percent has reached a level where an intermediate peak above the 80% level normally leads to at least a short term correction.

Percent of S&P 500 stocks trading above their 200 day moving average increased last week to 73.40% from 70.60%. Percent remains intermediate overbought, but has yet to show signs of peaking

The ratio of S&P 500 stocks in an uptrend to a downtrend (i.e. the Up/Down ratio) increased last week to (289/128=) 2.26 from 1.92. The ratio is intermediate overbought, but has yet to show signs of peaking.

Bullish Percent Index for S&P 500 stocks increased last week to 70.00% from 67.80% and remained above its 15 day moving average. The Index remains intermediate overbought, but has yet to show signs of peaking.

The Up/Down ratio for TSX Composite stocks increased last week to (139/81=) 1.72 from 1.46. The ratio is intermediate overbought, but has yet to show signs of peaking.

Bullish Percent Index for TSX Composite stocks increased last week to 60.57% from 56.91% and remained above its 15 day moving average. The Index remains intermediate overbought, but has yet to show signs of peaking.

The TSX Composite Index gained another 199.00 points (1.67%) last week. Intermediate trend changed from down to up on a break above resistance at 11,936.16. The Index remains above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index remains negative.

Percent of TSX stocks trading above their 50 day moving average increased last week to 69.92% from 66.26%. Percent is intermediate overbought, but has yet to show signs of peaking. Peaks near the 70% level normally lead to at least a short term correction by the Index.

Percent of TSX stocks trading above their 200 day moving average increased last week to 48.37% from 40.65%. Percent continues to trend higher.

The Dow Jones Industrial Average gained another 67.25 points (0.51%) last week. Intermediate trend is up. Next resistance is at 13,338.66. The Average remains above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index remains negative.

Bullish Percent Index for Dow Jones Industrial Average stocks increased last week to 86.67% from 83.33% and remained above its 15 day moving average. The Index remains intermediate overbought, but has yet to show signs of peaking.

Bullish Percent Index for NASDAQ Composite stocks increased last week to 53.69% from 52.42% and remained above its 15 day moving average. The Index continues to trend higher.

The NASDAQ Composite Index gained another 57.74 points (1.81%) last week. Intermediate trend is up. Next resistance is at 3,134.17. The Index remains above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index has changed from negative to at least neutral.

The Russell 2000 Index added 18.34 points (2.29%) last week. Intermediate trend is down, but turns positive on a break above resistance at 820.44. The Index remains above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index has changed from negative to at least neutral.

The Dow Jones Transportation Average gained 130.83 points (2.58%) last week. Intermediate trend is down. Resistance is at 5,290.06. The Average moved back above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index remains negative.

The Australia All Ordinaries Composite Index added 91.02 points (2.12%) last week. Intermediate trend is down. Support is at 4,033.40 and resistance is at 4,515.00. The Index remains above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index remains neutral.

The Nikkei Average gained another 271.06 points (3.05%) last week. Intermediate trend changed from down to up on a break above resistance at 9,136.02 on Friday. The Average remains above its 20 and 50 day moving averages and moved above its 200 day moving average last week. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index has changed from negative to at least neutral.

The Shanghai Composite Index slipped another 53.92 points (2.49%) last week. Intermediate trend is down. The Index remains below its 50 and 200 day moving averages and fell below its 20 day moving averages last week. Short term momentum indicators are trending down. Strength relative to the S&P 500 Index remains negative.

The London FT Index added 0.91 (0.02%), the Frankfurt DAX Index improved 75.89 points (1.09%) and the Paris CAC Index gained 31.67 points (0.92%) last week.

The Athens Index added 21.04 points (3.40%) last week. The Index remained above its 20 and 50 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index remains slightly negative.

Currencies

The U.S. Dollar Index added 0.05 (0.06%) last week. Intermediate trend is up. Support is at 81.16 and resistance is at 84.10. The Index remains just below its 20 and 50 day moving averages. Short term momentum indicators are trending down. Stochastics already are oversold.

The Euro added 0.42 (0.34%) last week. Intermediate trend is down. Support is at 120.42 and resistance is at 126.93. The Euro remains below its 50 and 200 averages, but remains above its 20 day moving average. Short term momentum indicators are trending higher. Stochastics already are overbought.

The Canadian Dollar added 0.18 U.S. cents (0.17%) last week. Intermediate trend is neutral. Support is at 95.76 and resistance is at 102.05. The Dollar remains above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking.

The Japanese Yen fell 2.07 (1.62%) last week. Intermediate trend is down. Support is at 124.12 and resistance is at 128.77. The Yen fell below its 20, 50 and 200 day moving averages. Short term momentum indicators are trending down. Stochastics already are oversold.

Commodities

The CRB Index added 1.67 points (0.55%) last week. Intermediate trend is up. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index has turned neutral.

Gasoline dropped $0.11 (3.65%) when the futures contract rolled over. Gasoline remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive.

Crude oil gained another $2.39 per barrel (2.56%) last week. Intermediate trend is up. Crude remains above its 20 and 50 day moving averages and just below its 200 day moving average. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index remains positive.

Natural Gas fell another $0.06 per MBtu (2.15%) last week. Intermediate trend is up. Resistance has formed at $3.28. Gas remains below its 50 day moving average and fell below its 20 day moving average last week. Short term momentum indicators are trending down. Strength relative to the S&P 500 Index has changed from up to at least neutral.

The S&P Energy Index slipped 0.78 points (0.14%) last week. The Index is testing resistance at 544.25. The Index remains above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index remains positive.

The Philadelphia Oil Services Index gained 0.97 (0.42%) last week. The move above a reverse head and shoulder pattern continues. The Index remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive.

Gold slipped $4.00 per ounce (0.25%) last week. Intermediate trend is down. Support is at $1,526.70 and resistance is at $1,642.40. Gold remains above its 20 and 50 day moving averages and below its 200 day moving averages. Short term momentum indicators are neutral. Strength relative to the S&P 500 Index remains neutral.

The AMEX Gold Bug Index added 4.88 points (1.13%) last week. Intermediate trend is down. Support is at 372.74 and resistance is at 464.76. The Index remains above its 20 and 50 day moving averages. Short term momentum indicators are trending higher. Strength relative to gold remains positive.

Silver added $0.01 per ounce (0.04%) last week. Intermediate trend is down. Support is at $26.10 and resistance is at $28.44. Silver remains below its 200 day moving average and above its 20 and 50 day moving averages. Short term momentum indicators are trending higher. Strength relative to gold remains neutral.

Platinum jumped $68.90 per ounce (4.92%) last week following labor strife at Lonvin, the world’s third largest platinum mine. Strength relative to gold turned from negative to positive. Platinum moved above its 20 and 50 day moving average.

Palladium jumped $23.75 (4.00%) last week. Nice breakout on Friday on a Leibovit Volume Reversal! Strength relative to the S&P 500 Index had turned from negative to positive.

Copper was unchanged last week. Intermediate trend is down. Support is at $3.24 and resistance is at $3.56. Copper moved back above its 20 and 50 day moving averages on Friday. Short term momentum indicators are neutral. Strength relative to the S&P 500 Index remains negative.

The TSX Global Metals and Mining Index eased 8.48 points (0.97%) last week. Intermediate trend is down. Support is at 781.13. The Index remains above its 20 and 50 day moving averages. Short term momentum indicators are trending higher. Stochastics already are overbought. Strength relative to the S&P 500 Index has been negative and showing early signs of change.

Lumber gained another 6.89 points (2.29%) last week. Lumber remains above its 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive.

The Grain ETN slipped $0.22 (0.35%) last week. Units remain above their 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index has turned negative.

The Agriculture ETF added $0.23 (0.46%) last week. Intermediate trend is up. Units remain above their 20, 50 and 200 day moving averages. Short term momentum indicators are overbought and showing early signs of peaking. Strength relative to the S&P 500 Index remains negative.

Interest Rates

The yield on 10 year Treasuries increase 16.7 basis points (1.01%) last week. Short term momentum indicators are overbought, but have yet to show signs of peaking.

Conversely, price of the long term Treasury ETF fell another $4.10 (3.26%) last week.

Other Issues

The VIX Index fell another 1.29 (8.75%) last week. It broke support at 13.66 to reach a five year low. Short term momentum indicators are oversold, but have yet to show signs of bottoming.

Earnings reports to be released this week are unlikely to have a significant impact on equity markets.

Economic reports this week are expected to be neutral/positive this week. Next major event is the Jackson Hole Economic conference where Benanke and Draghi are scheduled to speak.

Macro news heats up this week. China and the Eurozone release their PMI reports on Thursday. Mid-east tensions continue to ramp up.

Short and intermediate technical indicators for most equity markets and sectors are overbought, but have yet to show signs of peaking.

North American equity markets have a history of moving flat to lower in mid-August. September historically is the weakest month of the year. Seasonality turns positive after mid-October.

Cash on the sidelines on both sides of the border is substantial and growing. However, political uncertainties (including the Fiscal Cliff) preclude major commitments by investors and corporation. The selection of Paul Ryan as the Republican Vice President candidate has boosted Romney’s ratings on the polls, but the polls continue to show a tight race.

The Bottom Line

Equity markets on both sides of the border have had a good ride since their lows set on June 4^th. The Dow Jones Industrial Average is up 10.3%, the S&P 500 Index has gained 12.0% and the TSX Composite has increased 7.9%. Investing in equity markets has become less attractive. Accumulation of seasonal trades on weakness continues to make sense as long as the seasonal trades are outperforming the market. Sectors in this category include agriculture, energy, leisure & entertainment, software and gold. A cautious bullish stance appears appropriate.

Tom Rogers’ Weekly Elliott Wave Blog

Following is a link:

http://www.tomrogers.net/signpost.htm

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:

ETF News

The latest weekly update on ETFs in Canada to August 17^th is available at

http://www.etfinsight.ca/

Leibovit Volume Reversal Signal on Palladium

More information on Mark’s services is available at http://www.vrtrader.com/login/index.asp

Disclaimer: Comments and opinions offered in this report at www.timingthemarket.ca 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 for Horizons Investment Management Inc. All of the views expressed herein are the personal views of the authors and are not necessarily the views of Horizons Investment Management Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by Horizons Investment Management Inc

Horizons Seasonal Rotation ETF HAC August 17^th 2012

Copyright © TechTalk

Tags: Activity Index, Advance Decline Line, Amp, August 1, Bank Of Australia, Board Minutes, Bullish Percent Index, Bullish Trend, Canadian, Canadian Market, Cap Index, Chicago Fed, Consumer Sentiment, Consumer Survey, Decline, Don Vialoux, Durable Goods Orders, Earnings, Economic News, Existing Home Sales, Head And Shoulders, Industrials, Initial Jobless Claims, Intermediate Trend, July 31st, Market Benchmarks, Market Performance, Market Strength, Momentum Indicators, Months Of The Year, Moving Averages, Nbsp, New Home Sales, Reserve Bank Of Australia, Resistance, Retail Sales, Russell 2000, Sales Numbers, Seasonal, Seasonal Trades, Seasonality, Sectors, Signs, Stocks, Transportation Goods, Uptrend, Us Dollar Index, Weighted Index
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Sector Relative Strength: Defensives Topping

Friday, August 10th, 2012

by Bespoke Investment Group

The charts below show the relative strength of the ten S&P 500 sectors as well as the Dow Jones Transports and the Russell 2000 relative to the S&P 500 over the last year.  When the line is rising it indicates that the sector is outperforming the S&P 500, while a falling line indicates underperformance.  We have also shaded each sector in red or green to indicate whether the sector has outperformed (green) or underperformed (red) the S&P 500 over the last year.

As was the case the last time we looked at sector relative strength, over the last year six sectors have outperformed the S&P 500 while four have underperformed.  One shift that we have seen in the last two weeks, however, is that some of the defensive sectors have started to underperform.  Look at the charts below and you will see that Consumer Staples, Health Care, Telecom Services, and Utilities have all started to roll over to varying degrees.  For Consumer Staples and Utilities, both sectors are close to dipping into the red in terms of relative performance over the last year.  While defensives have seen slowing momentum, sectors picking up the slack include Energy, Industrials, and Technology.

Typically, when the market is in rally mode, you often see outperformance on the part of the Transports and Small Cap Stocks.  In the current leg higher, however, both indices have been lagging, and both are underperfoming the S&P 500 by a considerable margin over the last year.  In the case of the Russell 2000, the index has made a modest rebound over the last few days (post Knight Trading trade glitch), but it needs to string together another week or two of outperformance before we could confidently say that small caps are participating.

Copyright © Bespoke Investment Group

Tags: Amp, Consumer Staples, Dow Jones, Dow Jones Transports, Glitch, Industrials, Investment Group, Knight Trading, Last Time, Momentum, oil, Rally Mode, Rebound, Relative Performance, Relative Strength, Russell 2000, Sectors, Slack, Small Cap Stocks, Small Caps, Telecom Services
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Sector Relative Strength – A Bullish Trend?

Friday, June 8th, 2012

Tags: Amp, Bounce, Bullish Trend, Dow Jones, Downside, Industrials, Investment Group, Materials Sector, Nbsp, No Doubt, Outlook, Outperformance, Price Of Oil, Relative Strength, Sectors, Shaded Red, Signs, Theorists, Twelve Months
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Stocks for the Long Run?

Monday, May 28th, 2012

Tags: Amp, Barclays, Barclays Capital, Bonds, Bps, capitalism, Coupon Payments, Credit Index, Current, Dividends, Fixed Income, Government Credit, Sectors, Stocks
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Key ETF Performance QTD and YTD

Tuesday, May 15th, 2012

by Bespoke Investment Group

The second quarter of 2012 has so far been a complete reversal of the first quarter.  As of earlier this morning, just one stock-related ETF in our matrix below was up for the quarter — Utilities (XLU).  Major US index ETFs are all down 4-5% for the quarter, while sectors like Energy (XLE) and Financials (XLF) are down 7%+.

International markets have done much worse than the US.  Brazil (EWZ), France (EWQ), Germany (EWG), India (INP), Italy (EWI), Spain (EWP) and Russia (RSX) are all down double digit percentages since the start of April, and they’re down 5%+ over the last week alone.  The only asset class that is solidly in the green for the quarter is fixed income, which many investors shunned like the plague as recently as March.  Oh how quickly things change.

Tags: asset class, Brazil, Etf Performance, Ewg, Ewi, Ewp, Ewq, Ewz, First Quarter, Inp, International Markets, Investment Group, Percentages, Plague, Qtd, Rsx, Second Quarter, Sectors, Us Brazil, Xle, Xlf
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Equities Struggle Globally

Saturday, April 14th, 2012

Tags: Asset Classes, China, Consensus, Couple Weeks, Double Digits, Fixed Income, Fxi, Investment Group, Major Indices, Matrix, Nasdaq 100, Qqq, Sectors, Snapshot, Stocks, Treasury, Xle, Xlf, Xlk, Xly
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U.S. Equity Market Radar (April 9, 2012)

Sunday, April 8th, 2012

U.S. Equity Market Radar (April 9, 2012)

The S&P 500 Index fell 0.74 percent this week driven in large part by cyclical sectors as concerns mounted over a global economic slowdown.

Strengths

• Within the S&P 500 Avon Products was the best performer, rising by more than 20 percent as Coty, Inc. is seeking to buy Avon for $10 billion.
• Bed Bath & Beyond was the second-best performer this week rising by more than 9 percent on a better-than-expected fourth quarter earnings report.
• The technology sector eked out a small gain as Apple, Priceline and Mastercard were among the best performers in the S&P 500 this week.

Weaknesses

• The energy sector was the worst performer this week as global macro concerns dominated, even though oil prices were roughly flat for the week.
• The financial sector was also weak as macro concerns surrounding Europe and European banks resurfaced.
• First Solar was the worst performer this week, falling by more than 16 percent as the solar industry faces many obstacles.

Opportunities

• The market continues to grind higher irrespective of recent news. The “trend is your friend” until this pattern changes.

Threats

• The S&P 500 is arguably overbought in the short term and could be vulnerable to profit-taking.

Tags: Amp, Apple, Avon Products, Bed Bath, Coty Inc, energy sector, European Banks, Financial Sector, Fourth Quarter Earnings, Global Economic Slowdown, Global Macro, Market Radar, Obstacles, Oil Prices, Pattern Changes, Priceline, Recent News, Sectors, Solar Industry, Technology Sector
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U.S. Equity Market Radar (April 2, 2012)

Sunday, April 1st, 2012

U.S. Equity Market Radar (April 2, 2012)

The S&P 500 Index rose 0.81 percent this week driven by the healthcare sector, which rallied on the prospect of a Supreme Court decision rejecting the Affordable Care Act.

Strengths

• Defensive sectors tended to outperform this week, along with healthcare, utilities and consumer staples were among the week’s best performers.
• Within the healthcare sector, managed care stocks were among the best performers with Wellpoint, Coventry Health and Aetna all rising by at least 10 percent.
• Red Hat was the best performer in the S&P 500 this week, rising by more than 15 percent as the company reported better than expected earnings and increased guidance.

Weaknesses

• With the likelihood of mergers and acquisitions disappearing for utilities, the sector was the worst performer in the S&P 500 this week.
• The energy sector was also weak as oil fell more than three percent on continued fears of an economic slowdown in China.
• Best Buy was this week’s worst performer on a stock-specific basis as the company announced disappointing results and closure of 50 big box stores.

Opportunities

• The market continues to grind higher on recent news and the “trend is your friend” until this pattern changes.

Threats

• The S&P 500 is arguably overbought in the short term and could be vulnerable to profit taking.

Tags: Aetna, Affordable Care, Amp, Best Buy, Care Act, Consumer Staples, Coventry Health, Economic Slowdown, energy sector, Fears, Healthcare Sector, Likelihood, Market Radar, Mergers And Acquisitions, Pattern Changes, Recent News, Red Hat, Sectors, Supreme Court Decision, Wellpoint
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Dividends Make Comeback, Equity Valuations Below Historical Normal (ING)

Friday, March 23rd, 2012

Dividends Make a Comeback

by Douglas Coté, Chief Market Strategist, ING Investment Management

Returning wealth to shareholders is as American as apple pie. Unfortunately, in the last few weeks American companies have been denied this right by the Federal Reserve, in a sign that the financial system still is not fully healed despite an enormous bull market that launched in earnest at the end of the third quarter 2011 as the S&P 500 crosses the 1400 threshold. Dividends though, are making a comeback across sectors and an important part of an investor’s return. Please see “Dividend Yields” on page 13 of ING Global Perspectives for a view of the attractiveness of stocks on this measure.

Equity valuations below historic normal

It is not too late. That is, it is not too late to join in on this bull market. Sure, the first quarter was the best since 1998, and for the last six months U.S. global equity markets are up near 30%, and still there is plenty of upside potential. Let’s look at it. The forward price-to-earnings ratio (P/E) is a meager 13.25 based on our forecast of $105 per share for 2012. The historic normal P/E is 15, and based on this the market, the S&P500 could increase another 13% through year end. Compare that to a near zero return on CDs, money market, and other savings vehicles. Please see “Stock vs. Bond Valuation” on page 12 of ING Global Perspectives.

You can also scan ING’s Global Perspectives Monthly Book below in the slidedeck:

039458

Tags: American As Apple Pie, Amp, Attractiveness, Bond Valuation, Chief Market Strategist, Dividend Yields, Dividends, Federal Reserve, First Quarter, Forward Price, Global Equity Markets, Global Perspectives, Ing Investment Management, Investor, Money Market, Nbsp, P500, Price To Earnings Ratio, Sectors, Shareholders, Stocks, Threshold, Valuations, Year End, Zero Return
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