by Don Vialoux, Timing the Market
Economic News This Week
June Canadian Housing Starts to be released at 8:15 AM EDT on Wednesday are expected to slip to 190,000 from 198,300 in May.
FOMC Meeting Minutes from the June 18th meeting is to be released at 2:00 PM EDT on Wednesday
Weekly Initial Jobless Claims to be released at 8:30 AM EDT on Thursday are expected to slip to 312,000 from 315,000 last week.
Canadian June Employment is expected to slip to 21,000 from 25,800 in May. The June Unemployment Rate is expected to remain unchanged at 7.0% from May.
May Wholesale Inventories to be released at 10:00 AM EDT on Friday are expected increase 0.6% versus a gain of 1.1% in April.
Earnings News This Week
Alcoa is expected to report on Tuesday. Wells Fargo is expected to report on Friday.
Equity Trends
The S&P 500 Index gained 24.48 points (1.25%) last week. Trend remains up. The Index remains above its 20 day moving average. Short term momentum indicators are overbought, but have yet to show signs of peaking.
Percent of S&P 500 stocks trading above a 50 day moving average increased last week to 85.00% from 81.00%. Percent remains intermediate overbought.
Percent of S&P 500 stocks trading above their 200 day moving average increased last week to 90.00% from 85.50%. Percent remains intermediate overbought.
Bullish Percent Index for S&P 500 increased last week to 84.40% from 83.00% and remained above its 15 day moving average. The Index remains intermediate overbought.
Bullish Percent Index for TSX Composite stocks was unchanged last week at 84.08% and remained above its 15 day moving average. The Index remains intermediate overbought.
The TSX Composite Index added 120.71 points (0.80%) last week. Trend remains up (Score: 1.0). The Index remains above its 20 day moving average (Score: 1.0). Strength relative to the S&P 500 Index remains neutral (Score: 0.5). Technical score based on the above indicators remained at 2.5 out of 3.0. Short term momentum indicators returned to overbought.
Percent of TSX stocks trading above their 50 day moving average increased last week to 67.90% from 63.79%. Percent remains intermediate overbought.
Percent of TSX stocks trading above their 200 day moving average increased last week to 79.84% from 75.72%. Percent remains intermediate overbought.
The Dow Jones Industrial Average added 216.32 points (1.28%) last week. Intermediate trend remains up. The Average remains above its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remains at 2.0 out of 3.0. Short term momentum indicators have returned to overbought levels.
Bullish Percent Index for Dow Jones Industrial Average stocks was unchanged last week and remained at its 15 day moving average. The Index remains intermediate overbought.
Bullish Percent Index for NASDAQ Composite stocks increased last week to 62.78% from 60.07% and remained above its 15 day moving average. The Index remains intermediate overbought.
The NASDAQ Composite Index gained 87.99 points (2.00%) last week. Intermediate trend remains up. The Index remains above its 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 remain overbought, but have yet to show signs of peaking.
The Russell 2000 Index 18.66 points (1.57%) last week. Intermediate trend changed from neutral to up on a move above 1,212.82. The Index remains above its 20 day moving average. Strength relative to the S&P 500 Index remains positive. Technical score improved to 3.0 from 2.5 out of 3.0. Short term momentum indicators remain overbought.
The Dow Jones Transportation Average added 119.34 points (1.46%) last week. Intermediate trend remains up. The Average remains above their 20 day moving average. Strength relative to the S&P 500 Index remains neutral. Technical score remains at 2.5 out of 3.0. Short term momentum indicators have returned to overbought level.
The Australia All Ordinaries Index gained 82.71 points (1.52%) last week. Intermediate trend remains neutral. The Index remains above its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remained at 1.5 out of 3.0. Short term momentum indicators are trending up.
The Nikkei Average gained 342.13 points (2.27%) last week. Intermediate trend remains up. The Average recovered back above its 20 day moving average. Strength relative to the S&P 500 Index remains neutral. Technical score improved to 2.5 from 1.5 out of 3.0. Short term momentum indicators returned to overbought.
Europe 350 iShares added 0.77 (1.59%) last week. Units moved back above its 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score improved to 1.5 from 0.5 out of 3.0. Short term momentum indicators are trending up.
The Shanghai Composite Index added 22.81 points (1.12%) last week. Intermediate trend remains up. The Index moved back above its 20 day moving average. Strength relative to the S&P 500 Index changed from negative to neutral. Technical score improved to 2.5 from 1.0 out of 3.0. Short term momentum indicators are trending up.
iShares Emerging Markets increased $0.81 (1.87%) last week. Intermediate trend remains up. Units remain above their 20 day moving average. Strength relative to the S&P 500 Index changed from negative to neutral. Technical score improved to 2.5 from 2.0 out of 3.0. Short term momentum indicators are trending up.
Summary of Weekly Seasonal/Technical Parameters for Equity Indices/ETFs
Key:
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
Twenty Day Moving Average: Above, Below
Green: Upgrade
Red: Downgrade
Currencies
The U.S. Dollar gained 0.20 (0.25%) last week following release of a better than expected employment report on Thursday. The Dollar remains below its 20 day moving average. Short term momentum indicators are oversold and showing signs of bottoming.
The Euro slipped 0.40 (0.29%) last week. Intermediate trend remains neutral. The Euro remains above its 20 day moving average. Short term momentum indicators are trending up.
The Canadian Dollar added US 0.20 cents (0.21%) last week. Intermediate trend remains up. The Canuck Buck remains above its 20 day moving average. Short term momentum indicators are trending up, but are overbought.
The Japanese Yen fell 0.71 (0.72%) last week. Intermediate trend remains down. The Yen remains below its 20 day moving average. Short term momentum indicators have rolled over from overbought levels.
Commodities
The CRB Index fell 5.27 points (1.69%) last week. Intermediate trend remains up. The Index fell below its 20 day moving average. Strength relative to the S&P 500 Index changed from neutral to negative. Technical score fell to 1.0 from 2.5 out of 3.0.
Gasoline dropped $0.05 per gallon (1.63%) last week. Intermediate trend remains up. Gas fell below its 20 day moving average. Strength relative to the S&P 500 Index changed from neutral to negative. Technical score dropped to 1.0 from 2.5 out of 3.0.
Crude Oil dropped $1.65 per barrel (1.56%) last week. Intermediate trend remains up. Crude fell below its 20 day moving average. Strength relative to the S&P 500 Index changed from neutral to negative. Technical score fell to 1.0 from 2.5 out of 3.0. Short term momentum indicators are trending down.
Natural Gas slipped $0.02 (0.45%) last week. Intermediate trend remains up. Natty 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 and are oversold.
The S&P Energy Index added 2.86 points (0.39%) last week. Intermediate trend remains up. The Index remains above its 20 day moving average. Strength relative to the S&P 500 Index changed from positive to neutral. Technical score fell to 2.5 from 3.0 out of 3.0. Short term momentum indicators are trending down.
The Philadelphia Oil Services Index added 1.95 points (0.63%) last week. Intermediate trend remains up. The Index remains above its 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 trending up, but are overbought.
Gold added $0.40 per ounce (0.03%) last week. Intermediate trend remains neutral. Gold remains above its 20 day moving average. Strength relative to the S&P 500 Index changed from positive to neutral. Technical score slipped to 1.5 from 2.0 out of 3.0. Short term momentum indicators are trending up, but are overbought and showing early signs of rolling over.
Silver added $0.09 per ounce (0.43%) last week. Intermediate trend remains up. Silver remains above its 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 trending up, but are overbought. Strength relative to Gold remains positive.
The AMEX Gold Bug Index added 3.14 points (1.33%) last week. Intermediate trend remains up. The Index remains above its 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 trending up, but are overbought and showing early signs of rolling. Strength relative to gold remains positive.
Platinum gained $22.80 per ounce (1.54%) last week. Uptrend was confirmed on a move above $1,497.80. Platinum remains above its 20 day moving average. Strength relative to the S&P 500 Index remains positive. Strength relative to Gold changed from negative to neutral.
Palladium added $16.20 per ounce (1.92%) last week. Trend remains up. PALL remains above its 20 day moving average. Strength relative to S&P500 and Gold is neutral.
Copper added $0.12 per lb. (3.81%) last week. Intermediate uptrend was confirmed on a move above $3.193. Strength relative to the S&P 500 Index changed from neutral to positive. Technical score improved to 3.0 from 2.5 out of 3.0. Short term momentum indicators are trending up, but are overbought.
The TSX Metals & Mining Index jumped 68.25 points (8.17%) following the breakout by copper prices. Trend changed from down to up on a move above 893.52. The Index moved above its 20 day moving average. Strength relative to the S&P 500 Index changed from negative to positive. Technical score improved to 3.0 from 0.0 out of 3.0. Short term momentum indicators are overbought.
Lumber added 0.80 (0.24%) last week. Trend remains down. Lumber remains above its 20 day moving average. Strength relative to the S&P 500 Index remains positive.
The Grain ETN plunged $2.95 (6.47%) last week. Intermediate trend now is down. Strength relative to the S&P 500 Index remains negative. Technical score fell to 0.0 from 1.0.
The Agriculture ETF added $0.53 (0.96%) last week. Intermediate trend remains up. Units remain above their 20 day moving average. Strength relative to the S&P 500 Index remains negative. Technical score remains at 2.0 out of 3.0. Short term momentum indicators have recovered to overbought levels.
Interest Rates
The yield on 10 year Treasuries added 11.6 basis points last week following release of the June employment report. Trend changed from down to up on a move above 2.659% on Thursday. Yield moved above its 20 day moving average. Short term momentum indicators are trending up.
Conversely, price of the long term Treasury ETF fell $2.56 (2.26%) last week. Units fell below their 20 day moving average.
Other Issues
The VIX Index fell 0.93 (8.27%) last week. Trend remains down. The Index remains below its 20 day moving average.
Economic news this week is quiet. Focus is on the FOMC Meeting Minutes on Wednesday
Second quarter earnings reports start to trickle in this week. Consensus earnings estimate for the Dow 30 companies is an average (median) gain of 3.4% over the same period last year. Consensus for the TSX 60 companies is an average (median) gain of 6.8%).
The U.S. Independence Day Holiday trade is “off to a good start”. The trade normally starts two trading days before the end of June and ends five trading days after the July 4th holiday. However, the trade occasionally can extend to July 18th during years when responses to second quarter results are positive.
Liquidity in North American equity markets is expected to remain below normal.
Short and intermediate technical indicators returned to overbought levels following release of the U.S. employment report.
The Bottom Line
Enjoy the U.S. Independence Day Holiday trade while it lasts.
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:
Technology Sector Seasonal Chart
TECHNOLOGY Relative to the S&P 500  |
Note that the sector has a history of reaching a seasonal peak in mid-July
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 July 4th 2014
Copyright © Don Vialoux, Jon Vialoux, Brooke Thackray