Tech Talk for Monday February 12th 2024

U.S. equity index futures were mixed this morning. S&P 500 futures were down 1 point at 8:30 AM EST.

Diamondback Energy gained $1.24 to $152.98 after announcing a merger with Endeavor Energy Resources in a deal valued at $26 billion. Endeavour shareholder will receive $8 billion cash and 117.3 million shares of Diamondback. Diamondback also increased its dividend by 7%.

XPO Logistics dropped $2.18 to $118.66 after Morgan Stanley downgraded the stock from Equal Weight to Underweight.

Monday.com dropped $20.96 to $214.96 after the company offered 2024 guidance below consensus.

Big Lots dropped $0.63 to $4.73 on a report that the company is seeking additional financing.

The Bottom Line

Headline reads "S&P 500 Index closes at an all-time high". The "Magnificent Four" (Microsoft, Amazon, Meta and Nvidia), recently narrowed down from the "Magnificent Seven", continued to move higher. Their extraordinary overweight in the S&P 500 Index and the NASDAQ 100 Index was the main reason why all-time highs were reached on Friday. Other broadly based U.S. equity indices (e.g. Russell 2000 Index, S&P 500 Equal Weight Index, Dow Jones Transportation Average) remain significantly below their all-time highs set in December 2021.

Ditto for the TSX Composite Index and its related TSX 60 Index! Both reached their all-time highs in the first quarter of 2022.

Note intermediate and long term momentum scores for the S&P 500 stocks and TSX Composite stocks at the end of this report. Their scores continue to roll over from Overbought levels. That does not mean that S&P 500 Index and TSX Composite Index will move lower. It does mean that intermediate upside potential for North American equities is limited. Short term performance will continue to depend on a small number of big cap U.S. equity securities.

Consensus for Earnings and Revenues for S&P 500 Companies

Source: www.FactSet.com

Earnings estimates for the fourth quarter of 2023 were raised again thanks to increased estimates by analysts for the "Magnificent Four" companies following release of their better-than expected fourth quarter results. Sixty seven percent of S&P 500 companies have reported to date. Fourth quarter earnings now are expected to increase 2.9% on a year-over-year basis (versus an increase last week of 1.6%). Estimate for fourth quarter revenues was increased to a gain of 3.9% from a gain of 3.5% last week.

A significant earnings recovery by S&P 500 companies first surfaces in the first quarter of 2024, but at a slightly lower than a previous rate. Consensus for the first quarter on a year-over-year basis calls for an earnings increase of 4.0% (versus increase last week of 4.5%) and a revenue increase of 3.6% (unchanged)

Earnings gains accelerate thereafter to the end of 2024, all-be-it at a slower pace. Consensus for the second quarter calls for a 9.1% earnings increase (versus a 9.4% increase last week) and a 4.8% increase in revenues (versus a 4.7% last week). Consensus for the third quarter calls for an 8.1% increase in earnings (versus previous 8.0% increase) and a 5.0% increase in revenues (versus a 4.7% increase last week). Consensus for the fourth quarter calls for a 17.7% increase in earnings (versus previous 19.0% increase) and a 5.6% increase in revenues. For all of 2024, consensus calls for a 10.9% increase in earnings (versus previous 11.2% increase) and a 5.4% increase in revenues.

Economic News This Week

Source: www.Investing.com

January U.S. Consumer Price Index released at 8:30 AM EST on Tuesday is expected to increase 0.2% versus a gain of 0.2% in December. On a year-over-year basis January CPI is expected to increase 3.0% versus a gain of 3.3% in December. January Consumer Price Index excluding food and energy is expected to increase 0.3% versus a gain of 0.3% in December. On a year-over-year basis January core CPI is expected to increase 3.8% versus a gain of 3.9% in December.

January U.S. Retail Sales ex auto sales released at 8:30 AM EST on Thursday are expected to increase 0.2% versus a gain of 0.4% in December.

February Philly Fed Index released at 8:30 AM EST on Thursday is expected to improve to -8.0 from -10.6 in January.

February Empire State Manufacturing Survey released at 8:30 AM EST on Thursday is expected to improve to -12.50 from -43.70 in January.

January U.S. Capacity Utilization released at 9:15 AM EST on Thursday is expected to increase to 78.8 from 78.6 in December. January Industrial Production is expected to increase 0.3% versus a gain of 0.1% in December.

December U.S. Business Inventories released at 10:00 AM EST on Thursday are expected to increase 0.3% versus a decline of 0.1% in November.

January U.S. Producer Price Index released at 8:30 AM EST on Friday are expected to increase 0.1% versus a decline of 0.1% in December. Excluding food and energy, January PPI is expected to increase 0.1% versus unchanged in December On a year-over-year basis core PPI is expected to increase 1.7% versus a gain of 1.8% in December.

February Michigan Consumer Sentiment released at 10:00 AM EST on Friday is expected to increase to 80.0 from 79.0 in January.

Selected Earnings News This Week

Source: www.Investing..com

Trader's Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for Feb.9th 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 Feb.9th 2024

Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for Feb.9th 2024

Green: Increase from previous day

Red: Decrease from previous day

Technical Notes for Friday

Chevron $CVX an S&P 100 stock moved above $154.35 resuming an intermediate uptrend.

Synopsys $SNPS a NASDAQ 100 stock moved above $573.77 to an all-time high extending an intermediate uptrend.

Kinross Gold a TSX 60 stock moved below Cdn$5.30 and US$7.14 completing a Head & Shoulders pattern.

Simon Property $SPG an S&P 100 stock moved above $146.91 extending an intermediate uptrend.

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

Your Questions, Answered! Price Gaps, Bull Flags, Inverse Patterns and MORE: David Keller

https://www.youtube.com/watch?v=0roUFdkeHgI

The Bull Case For Stocks as S&P Hits 5,000 with @LukeGromenFFTTLLC: Guy Adami

https://www.youtube.com/watch?v=s485QZIPyEY

Mike's Money Talks for February 10th

February 10th Episode (mikesmoneytalks.ca)

Best Way To Participate in Stronger Areas of The Market: Mary Ellen McGonagle

https://www.youtube.com/watch?v=-YVJgNev8_4

Master Momentum Using Price Swings and Fibonacci: Joe Rabil

https://www.youtube.com/watch?v=RUMev2kyeYI

Beware the Hindenburg Omen! David Keller

Beware the Hindenburg Omen! | The Mindful Investor | StockCharts.com

Generals March On, but Fewer Troops are Following – Get the Essential Breadth Indicator ChartList

Generals March On, but Fewer Troops are Following – Get the Essential Breadth Indicator ChartList | Art’s Charts | StockCharts.com

Sentiment Lopsided – Is It a Problem? Erin Swenlin

Sentiment Lopsided – Is It a Problem? | DecisionPoint | StockCharts.com

Lower Interest Rates Do Not Equal Good Times: Bob Hoye

Lower Interest Rates Do Not Equal Good Times - HoweStreet

Is the Stock Market Too Hot? Mark Leibovit

Is the Stock Market Too Hot? - HoweStreet

Trading Desk Notes for February 10th: Victor Adair

Trading Desk Notes For February 10, 2024 - HoweStreet

Danielle Park presents at VRIC 2024: Capital Prospects in 2024

Danielle presents at VRIC 2024: Capital Prospects in 2024 - HoweStreet

Technical Scoop from David Chapman and www.EnrichedInvesting.com

https://enrichedinvesting.com/wp-content/uploads/2024/02/Ostensible-rosiness-market-highs-continued-magnificence-miserable-metals-geopolitical-drivers2.pdf

S&P 500 Momentum Barometers

The intermediate term Barometer slipped 1.80 on Friday and dropped 3.40 last week to 63.00. It remains Overbought. Daily trend remains down.

The long term Barometer was unchanged on Friday and dropped 1.80 last week to 70.80. It remains Overbought. Daily trend remains down.

TSX Momentum Barometers

The intermediate term Barometer added 2.67 on Friday, but dropped 9.34 last week to 53.33. It changed from Overbought to Neutral on a drop below 60.00. Daily trend remains down.

The long term Barometer slipped 1.33 on Friday and dropped 6.22 last week to 56.89. It changed from Overbought to Neutral on a drop below 60.00, Daily trend remains down.

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