Tech Talk for Monday October 2nd 2023

October 02, 2023 / www.timingthemarket.ca / Article Link

U.S. equity index futures were lower this morning. S&P 500 futures were down 7 points at 8:30 AM EDT.

Nvidia advanced $5.21 to $440.20 after Goldman Sachs upgraded the stock to its Conviction List.

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FedEx added $10.7 to $265.79 after Susquehanna included the stock on its Positive List.

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Toast dropped $0.42 to $18.31 after Mizuho downgraded the stock from Buy to Neutral.

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Chubb dropped $3.23 to $204.95 after JP Morgan downgraded the stock from Overweight to Neutral.

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EquityClock's Daily Comment

Headline reads "October, while volatile, has historically been a positive month for stocks with the S&P 500 Index averaging a return of 1.3%".

https://equityclock.com/2023/09/30/stock-market-outlook-for-october-2-2023/

Technical Scoop from David Chapman and www.EnrichedInvesting.com

https://enrichedinvesting.com/wp-content/uploads/2023/10/Fraying-markets-strong-energy-deep-divisions-Dollar-domination-precious-optimism-spending-pushh.pdf

 

The Bottom Line

North American equity markets continue to track their seasonal pattern that calls for weakness into the last week in September and the first week in October followed by start of the traditional fourth quarter rally. Lots of "noise" continues to negatively influence equity prices including the auto worker strike and a likely shut down of Federal government services until an agreement on the debt ceiling limit is reached.

Despite the "noise", analysts have maintained their favourable outlook for corporate revenues and earnings: Consensus calls for third quarter results on a year-over-year basis to show virtually no change followed by a significant recovery in the fourth quarter followed by strong gains in the first half of 2023.

Patience by traders during the "noisy" period is required. Now is a good time to line up possible list of purchase candidates based on their improving technical and fundamental prospects to the end of the year.

 

Consensus for Earnings and Revenues for S&P 500 Companies

Source: www.FactSet.com

Consensus estimates for remainder of 2023 increased slightly last week. Consensus for the third quarter is an earnings decrease on a year-over-year basis of 0.1% (versus previous decrease of 0.2%). Third quarter revenues are expected to increase 1.6% (versus previous increase of 1.5%). Fourth quarter earnings are expected to increase 8.3% (versus previous increase of 8.2%) Fourth quarter revenues are expected to increase 3.9% (versus a 3.8% increase last week). For all of 2023, consensus calls for an earnings increase of 1.1%. Revenues are expected to increase 2.4%.

The recovery continues into 2024. No changes were made last week. Consensus for the first quarter on a year-over-year basis is an earnings increase of 8.6 % and a revenue increase of 4.7%. Consensus for the second quarter is a 12.1% earnings increase and a 5.5% revenue increase. Consensus for all of 2024 is an increase in earnings of 12.2% and a 5.6% increase in revenues.

 

Economic News This Week

Source: www.Investing.com

September ISM Manufacturing PMI released at 8:30 AM EDT on Monday is expected to improve to 47.8 from 47.6 in August.

August Construction Spending released at 10:00 AM EDT on Monday is expected to increase 0.5% versus a gain of 0.7% in July

August Factory Orders are released at 10:00 AM EDT on Wednesday

September ISM Non-Manufacturing PMI released at 10:00 AM EDT on Wednesday is expected to slip to 54.0 from 54.5 in August.

August U.S. Trade Deficit released at 8:30 AM EDT on Thursday is expected to increase to $65.10 billion from $65.00 billion in July.

August Canadian Trade is released at 8:30 AM EDT on Thursday

September Non-Farm Payrolls released at 8:30 AM EDT on Friday is expected to drop to 150,000 from 175,000 in August. September Unemployment Rate is expected to slip to 3.7% from 3.8% in August. September Hourly Earnings are expected to increase 0.3% versus a gain of 0.2% in August.

September Canadian Employment is released at 8:30 AM EDT on Friday.

 

Selected Earnings News This Week

Source: www.Investing.com

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Trader's Corner

Equity Indices and Related ETFs

Daily Seasonal/Technical Equity Trends for September 29th 2023

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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 September 29th 2023

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Green: Increase from previous day

Red: Decrease from previous day

Sectors

Daily Seasonal/Technical Sector Trends for September 29th 2023

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Green: Increase from previous day

Red: Decrease from previous day

 

Links offered by valued providers

3 Things You NEED to Stay On Right Side Of The Market | Your Daily Five (09.29.23)

3 Things You NEED to Stay On Right Side Of The Market | Your Daily Five (09.29.23) - YouTube

 

Beware of Shorts in EXTREME Cycle Lows For The Market | Moxie Indicator Minutes (09.29.23)

Beware of Shorts in EXTREME Cycle Lows For The Market | Moxie Indicator Minutes (09.29.23) - YouTube

 

Michael Campbell's Money Talks for September 30th

(includes an interview with Martin Armstrong)

Michael Campbell's MoneyTalks - Complete Show (mikesmoneytalks.ca)

 

Mark Leibovit: How to Protect Investments With Unpredictable US Government – Sept. 28, 2023

https://www.howestreet.com/2023/09/mark-leibovit-how-to-protect-investments-with-unpredictable-us-government-mark-leibovit/

 

The Worst Month of the Year is Behind Us — Here’s What We Need to See for Better Times Ahead

The Worst Month of the Year is Behind Us — Here’s What We Need to See for Better Times Ahead | The MEM Edge | StockCharts.com

 

3 Things You NEED to Stay On Right Side Of The Market | Your Daily Five (09.29.23

3 Things You NEED to Stay On Right Side Of The Market | Your Daily Five (09.29.23) – YouTube

We’re in BIG TROUBLE If Large Tech Stocks Rollover | GoNoGo Charts (09.29.23)

We’re in BIG TROUBLE If Large Tech Stocks Rollover | GoNoGo Charts (09.29.23) - YouTube

 

New Tables Show Intermediate-Term Overview is Negative

New Tables Show Intermediate-Term Overview is Negative | DecisionPoint | StockCharts.com

 

What is a "normal" interest rate? Bob Hoye

What is a "Normal" Interest Rate? - HoweStreet

 

Trading Desk Notes from Victor Adair

Trading Desk Notes For September 30, 2023 - HoweStreet

 

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

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Technical Notes

Gasoline ETN $UGA moved below intermediate support at $68.84

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Berkshire Hathaway $BRK.B an S&P 100 stock moved below intermediate support at $349.61

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IBM $IBM a Dow Jones Industrial Average stock moved below intermediate support at $139.76.

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Kinross Gold $KGC a TSX 60 stock moved below US$4.51 setting an intermediate downtrend.

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S&P 500 Momentum Barometers

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The intermediate term Barometer dropped 4.00 on Friday and 3.80 last week to 15.40. It remains Oversold. Daily trend remains down.

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The long term Barometer slipped 0.40 on Friday and dropped 3.20 last week to 40.60. It remains Neutral. Daily trend is down.

 

TSX Momentum Barometers

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The intermediate term Barometer slipped 2.64 on Friday and dropped 7.04 last week to 21.59. It remains Oversold. Daily trend remains down.

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The long term Barometer slipped 0.88 on Friday and dropped 4.41 last week. It changed from Neutral to Oversold on a move below 40.00. 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


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