The Canadian Technician

When WalMart (WMT) Rises $30 Billion In Two Weeks...Whatever....

I have so many charts that feel important here. I have reviewed Walmart (WMT) before. But I haven't found many instances in recent years where the 'grocery store in every neighbourhood' stock rallies 10% on a breakout in 9 days. I find it a little hard to believe that the $270 Billion Dollar behemoth we know as Walmart put a new product at the end of the aisle that increased its market cap by $30 Billion this month! Here's the chart. Walmart is up $13.6% since the Nov 3 low and up 10 percent in 9 days.

Well, after a contemplative day rolling through a massive number of charts, I couldn't help but say, Why Walmart? What is so special about Walmart that it makes it one of the fastest relative moves in 7 years of history this week? I say relative because the $SPX was up a whole 1.52% from October 31 close. Out of all the stocks in this little ticker cloud, why Walmart? Down in the bottom left a little 'wmt' sits in the corner.

Continue reading "When WalMart (WMT) Rises $30 Billion In Two Weeks...Whatever...." »

Goldman's Commodity Index Review

I look at 6 of Goldman's Commodity Indexes. Let's take a quick look at the charts.

Here is the Precious Metals Index ($GPX). Starting at the RSI, we are still in a bear trend with the red line across the top. This is an interesting place as we try to double bounce off the 30 RSI level. In the background is the SP500 Relative Strength what I call SPURS. So the SPURS shows the $GPX or precious metals index continuing to under perform.

This price breakdown was capable of wiping out all the long positions. This is an important place to watch or invest with tight stops. If the Dollar surges this will probably continue to break down.


Here is the Energy Index ($GJX). While I have obviously front end loaded the worst charts to start your review, this is how weak charts look.  The RSI is ghastly low at 15.84. The SPURS are plummeting.

Since the price snapped the triangle, its been a one way trade. I have not seen any rallies that would get my interest in marking a low. The MACD is at the weakest level in 4.5 years. Yecch.

Next is the Industrial Metals Index ($GYX). Notice the change in behaviour of the RSI. It has pushed back up to almost 70. That could/should be a bull market signal. The RSI also continues to make higher lows. We find it today at 49.04. This is an important place on an RSI. After going up and then bouncing down near the 40 level, we would like to see this explode this to the upside if you are a commodities bull. I am not an economist but I can use an economist phrase. "But on the other hand" : ), this would be very difficult if this breaks down here. We would start to break trend lines and make lower lows which is not how bull markets start. :( 

We can see the SPURS area chart is down sloping or flat at best.

Price is at a firm support/resistance line. We would really like to see this break out to the upside for global growth. The MACD is at a cautionary area near zero. If it can bounce here, that is a beautiful confirming signal at an important place on the chart.

Here is the Agricultural Index ($GKX). This one is showing some signs of life. The RSI has made a strong double bottom and is heading up to the 50 level. This 50 level usually acts as some resistance, so we'll be watching for a more positive push through that level. We can see the SPURS is still in a big downtrend. A break above the purple line would be very bullish.  

 

We can see the price is stalled at resistance with the short green line. Price bounced off a very important support/resistance level. . The MACD has turned up from an oversold level. This is a common level to look for reversals. The last bounce made it all the way up to above the zero line and failed again. If this can get a spurious rally going, the top trend line is 10% up and to the right. However, it is still in a major downtrend with a bearish pattern everywhere. Trading bounce only until proven differently.

The next chart is the livestock chart. See anything different here? Yeah, I thought I saw a bull trend. Notice how the RSI has been holding above 40. The RSI broke down, tested 40 and bounced. The SPURS continues to hold a pattern of higher lows which is bullish till broken. 

The price is in a nice ascending channel. This high volatility recently (Big up/down spike between September high/October low) adds caution to a big uptrend. Usually an increase in volatility make uncertainty in the trade. If this goes on to make new highs, stops should remain tight. I would be watching the MACD and if it makes a lower high over the next few months, that would generally be a problem.

Goldman also publishes a Total Commodity Index ($GTX). So that would be Chart 6. This chart looks so similar to the $GJX energy chart above, I can't help but think this is masking the inputs of the other commodities.

So, the general trend is down for 4 of 5 or 5 of 6 including the total index. The Livestock chart has some hope of pushing higher. However, any longs in 4 of the 5 charts at this point would be for countertrend bounces until proven otherwise.

Investors long the commodities part of the market may wish to frame their investments as countertrend trades not holds. With that framing, there may be some bounces here that are worth participating in. I feel like the price action in Gold and Silver could be a potential play as illustrated on the Don't Ignore This Chart blog from Friday November 7. If the $USD stabilizes at this level, Gold may continue to bounce. If the $USD makes new highs, this could peel the $GOLD trade off the table. Here is the picture of the UUP which tracks the dollar index intraday. This is the main reason that a potential bounce in commodities could arrive. Should this divergence repair itself to the upside, the commodities will be under more pressure.

That is how I am viewing the commodities at this point.  For all of the long term investors, the commodities are not in play yet unless the merger parade kicks into high gear.

Good trading,
Greg Schnell, CMT

Ring, Ring, Ring, Ring, Hello? New 52 Week High? Other than Apple Who Could It Be?

The technicians. We are a complex bunch. Thousands of interpretations of different indicators. But today, Telus (T.TO) rang up a new 52 week high. It can't be much simpler than someone willing to pay more for the stock than ever before. 

My iPhone cell plan is more money, the iPhone is in high demand and Telus actually have stock. Is it more than that? Maybe, but the chart tells us that the investors have found renewed interest after Telus hovered between 36 and 41 for the whole year.

The SCTR is above 75. The SPURS are sloping up. The MACD has turned up. Stops can go just below this weeks candle in case it does not hold.

If you liked this article, feel free to forward it to investing friends and family. If you didn't like the blog, please send me a note on what I could do better. The chart is printable. It should also be clickable so that you can go look at the settings.

We try to keep our articles informative and entertaining. Make sure you check out the other blog writer articles in MailbagChartwatchersTraders JournalDecisonPointDon't Ignore This ChartChip AndersonScanning Technically, and The Canadian Technician. Subscribers have access to blog articles by Arthur Hill, John Murphy, Martin Pring as well as the DecisionPoint Tracker and DecisonPoint Reports. Don't forget to look for the subscribe button for RSS feeds and email. 

On the Blogs tab, you can also see the Top Advisors Corner  in the right hand panel where other technicians post their work. If you are paying for newsletters all over the Internet, don't miss all the articles here that are included!

Good trading,
Greg Schnell, CMT

Amazon (AMZN) Breaks The Down Trend Line But Still Weak On RRG

Amazon (AMZN) has really been out of favour with all the love thrown towards the Alibaba baby (BABA). But there are some interesting reasons to look at Amazon today.

Amazon made a textbook double bottom in October. This week it is climbing above the downtrend line heading into the Christmas season. Will AMZN be able to to return to its former trend after taking a year to go sideways?

Here are the reasons I like the chart.

The textbook double bottom where the price on the right just slightly undercuts the price on the left to get rid of any weak holders.

The MACD looks like it is making a higher low on the weekly.

The UPS and FDX charts are beautiful. They seem to be anticipating a run on home deliveries with low fuel costs.

The vertical blue bar above measures AMZN up to $444 in the next year.

The seasonality of AMZN is usually pretty good heading into Christmas. With the savings on gasoline in the USA, we might expect a jump in retail spending for Christmas. 

What I don't like about AMZN:

Here is the RRG chart on a daily basis. RRG Link Daily While the momentum is improving, it is still dramatically behind in terms of relative strength to the $SPX. That is shown because it is a long way left of centre on the chart.

Here it is on the weekly. Pretty much out of favour. Here is the link for the weekly. RRG Weekly Link. We can see here that the stock is still on a very bearish vector by pointing towards the bottom left. Longer term investors may want to wait for AMZN to at least start turning towards the top right corner rather than pointing to the bottom left.

So the current signal is very short term trading with a stop nice and close. If AMZN can accelerate from here into the top right corner on the RRG, that would be a good indication to stay aboard for a nice ride.

For attending the next “Canadian Technician” Webinar, Please click here to register. My good friend Martin Pring will be presenting as well. That is a hint to register early, as it will be a full house. Only register if you can make the live call. The archive will be available shortly after.

Good trading,
Greg Schnell, CMT

Lumber's Slumber Leads Us To Wonder

So I keep noticing lumber related stocks going up, yet Lumber ($LUMBER) is not performing. First here is $LUMBER. Does this look like a chart generating breakout moves on lumber stocks? It did not to me.

Continue reading "Lumber's Slumber Leads Us To Wonder" »

Check out the RRG charts for the Canadian Sectors

The RRG Charts are going to be part of Thursday's webinar. The value of these charts is unbelievable. Here is a sample of the Canadian Sectors RRG Chart.

The $TSX is the benchmark in the box above the green area of the chart. So it is the average. That means the Energy and Materials have sold off so hard, that they can balance the other 2/3's of the index weighting. The table below the rotational chart shows you the ticker name and the detailed name of the sector. The Utilities are about to accelerate into the positive momentum and positive relative strength so they might be a sector to drill into.

Here is the link to the live chart.

Based on this chart it is still way too early to look for success in the energy and gold sectors. 

Now let's compare it to the $SPX in Chart 2. Here is the link.  Notice a few major things. Financials, Consumer Discretionary, Industrial are all losing momentum (because they are moving down) and losing relative strength (because they are moving from the right towards the left). When they start to under perform both in terms of momentum and relative strength that is an important time. So the only sector with improving momentum is the Utilities and the relative strength is also improving on the Utilities but the $SPX is still outperforming so this appears to the left of centre. The Technology, Health Care and Consumer Staples are losing momentum( moving down)  but they are still outperforming the $SPX (Moving to the right). 

I spent a few hours with Julius De Kempenaar in Amsterdam and I plan on demonstrating some of my analysis on how I would use this to help pick stronger areas of the market.

So for the webinar tomorrow afternoon, we would love to have you attend. You can Click Here To Register. Please click to register only if you are attending live. You do not have to register to watch the webinar later.

The start time for the webinar will be Thursday October 30 at 4:30 EDT, 1:30 PDT.

It will be posted on  the lower part of the home page for viewing afterward. See the example below. Notice the last line.

Good trading,
Greg Schnell, CMT

 

$NATGAS Fails To Stay Above Support

It seems Natural Gas ($NATGAS) is failing. It really needed to hold $3.72. I spoke about it in the webinar but it continues to break down.

Investors in the Natural Gas stocks that were looking for a bounce like I was have been disappointed.  We will have to wait for a better signal.

Good trading,
Greg Schnell, CMT

 

Oil Stocks Bounce..But Wait..There's One More Thing..

The Canadian oil stocks have been traumatized by the recent plunge in crude. If you like to take advantage of deep pullbacks in price, these charts have been severely hit. This was just a screen shot of the most actives from the home page $TSX hot box. 

How else can we hunt for great stocks after this pullback? Well, the SCTR is a great place to look. Some of these stocks are already back in the top quartile of Canadian stocks. The last column is the SCTR ranking.

Even if you just want to find all the oil and gas producers, you can click on the SCTR report button on the home page, select Toronto stocks in the drop down menu at the top,  click on the SCTR column heading to make sure the 99% ones are at the top, then click on industry. You can scroll down and see any industry with the stocks in SCTR ranking order. You can use the same list with gold miners as an example. I posted a strong list of high SCTR rated gold miners in the Market Roundup yesterday. Here is the same posting, in case you missed it.

With the push off the recent lows, I will try to highlight some great looking industry groups and high SCTR rankings on the weekly webinar that will be on Friday this week. October 24th, 4:30 EST. Click here to register.

I also wanted to take a minute to point out some fantastic Technical Analysis events coming up in Canada in the next few weeks. If you register soon, it will make a difference for your pricing and helps the organizer line up food and room arrangements. I sit on the board of the Canadian Society of Technical Analysts in Canada. This is a shout out for a major meeting coming up in November that I am one of the key organizers for. We are hosting a simulcast meeting at 5 locations across Canada with remote and on site presenters all day Saturday November 8th. If you are interested, you can follow this link for way more information. Two world class authors will do a National presentation and each location will have on site presenters for the rest of the day. It is the annual national meeting for CSTA members and newcomers. 

As well, I was in London for the IFTA conference. Chatting with Alex Elder, he mentioned he was doing a one day seminar in Toronto on November 9. He only had 3 spots left, the last I talked to him. You can find more information on his web page at Elder.com. Click here for the Link to the Toronto meeting. I use the Elder Impulse system candles on StockCharts.com all the time. They add strength to the presentation of information and clarity to changes in momentum. I also saw his newest book in London which is a major rewrite of his most famous work, Trading For A Living. The new version is called ...you guessed it...The New Trading For A Living. Here is a photo of Chip receiving a copy from Alex in London.  

PS. You will be able to get Alex's book at the StockCharts.com bookstore as we should have it in stock over the next few weeks. 

As the market rebounds with conviction here, there are some fast moving stocks. Using the SCTR rankings can really help you pick strong stocks in different industry groups and sectors. Hopefully you'll join me on a walk through the strong sectors, industries and stocks on Friday's webinar.

Good trading,
Greg Schnell, CMT

 

 

 

Is IBM A Big Blue Bubble Or Is Tech In Techno Trouble

Listening to the news is always a bad way to decide what is really going on. However, today offered more. IBM announced earnings that were considered lacklustre. When you miss revenue by a b-b-billion dollars, somebody notices these small changes!

So I had seen a comment that SAP missed earlier in the day and then IBM missed and it started to make me ponder. Well, I wasn't exactly going to pull out 30 tech companies earnings reports to see what was going on. A picture is worth a 1000 words so lets go to the technical museum of fine art, the charts.

Here is IBM (IBM). Remember today it opened in the high 160's. I have marked the generous zone of support in red. Regardless of the Zone of support, the trend line is as generous as possible. There is only one other trend line and that is horizontal. You can see the SCTR has suggested avoiding the stock for almost 3 full years now. The green area is top quartile performance. It has not been there in three years. IBM has been buying back stock rather than doing acquisitions. 

So IBM is a firm that consults to many of the worlds largest companies. Who else does that? Well ORCL is a big financial systems provider for enterprise wide software.

Here is a chart I posted a month ago in the Subscribers blogs for the Market Roundup with Martin Pring.(20140919) Market Roundup  Oracle had under performed the S&P 500 ($SPX) for quite a while ...when Larry Ellison stepped down. Hummm, thats odd. We also had a chart of SAP in the same Market Roundup but more on that later.

Well, here is the chart of Oracle (ORCL) with the SCTR and the SPURS or purple relative strength area at the top.We can see the stock has not been able to keep up with the $SPX in purple. We can see the SCTR ranking really started to drop in June when the highs were put in.

So here is the SAP Software (SAP) company chart. They just did a big acquisition. Hum, that was an Oracle strategy for continuing the revenue growth. SAP bought Concur Technologies the week the $SPX topped at 2019.

Here it is in the same view for SAP with the same settings. Under performing the $SPX and the SCTR is very low. The 5 year trend line is broken. 

When I looked at Amazon (AMZN) which is also a large cloud company, here is what showed up. Same traits.

Here is Google (GOOGL). Same trait. Just recently broke the long trend line on outperformance compared to the $SPX. Look at the negative divergence on the MACD relative to the price. Double top in price, huge loss of momentum on the MACD.

 

Here is Adobe (ADBE). I have been weary about their ability to produce gains for a long time. They kept proving me wrong. Today, this shows up in the charts.

Okay, I have left room for a little optimism.  Here is Microsoft (MSFT). Chart looks great. Be cautious on it starting to under perform the $SPX here. There seems to be a trend in the charts above that should infect MSFT at some point.

Lastly, Apple. While not a big industry cloud provider, definitely a leader in the XLK.

So, when I scan these charts, I get very worried about the broader trend in large cap tech. You should be able to click on these charts and see the settings. You can check out ASML, INTC, CSCO, QCOM, MU, PCLN, EXPE, EBAY, NFLX,P and see what you think. Looking at this list of charts would suggest to me being long the XLK without protection close below( Stops, Puts etc) is ignoring some very weak looking major charts. Lastly, it looks like SAP, IBM and ORCL are finding it very difficult to keep growing revenue and bottom line profits. But that is my view based on the charts, not the earnings calls. We'll know in the months ahead if this trend continues.

Good trading,
Greg Schnell, CMT

 

Energy Stocks Shoot Up Like Oil From A New Well

The energy stocks have been deeply oversold. I have mentioned them in the webinars and then spoke specifically about Cenovus (CVE.TO) coming down to support. Well, the broader energy sector is also rebounding looking at the Canadian Energy Sector ( $SPTEN) chart. If Investors were trying to buy the dip, this one has been a deep one.  It's like the dip we all want the Chocolate Dipped Ice Cream cone to get at our Ice Cream store.

This has been very oversold and the bounce is already back at the 50 DMA. I would expect the sector to try to bounce up to the 200 DMA over the next few weeks and then we'll see how the momentum holds up.

For now, it's like a roughneck getting soaked in oil on a drilling rig floor! Volatility is big coming off the lows, so this might not be a straight shot up. Caution is warranted.

If anyone hasn't seen yesterday's webinar, here is the link. Thursday October 16, 2014. Next weeks webinar will be on Friday October 24th.

Good trading,
Greg Schnell, CMT 

 

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