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Stock Market Outlook for November 15, 2017

Price of oil breaks parabolic trend, pressuring the energy sector.

 

Real Time Economic Calendar provided by Investing.com.

 

*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.   As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.

Stocks Entering Period of Seasonal Strength Today:

Pilgrim's Pride Corporation (NASDAQ:PPC) Seasonal Chart

Pilgrim’s Pride Corporation (NASDAQ:PPC) Seasonal Chart

Skechers USA Inc (NYSE:SKX) Seasonal Chart

Skechers USA Inc (NYSE:SKX) Seasonal Chart

Suncor Energy Inc.  (TSE:SU) Seasonal Chart

Suncor Energy Inc. (TSE:SU) Seasonal Chart

 

 

The Markets

Another mild down day for stocks as investors continue to take down risk at these all-time high levels.  The S&P 500 Index shed just over two-tenths of one percent, maintaining support at its rising 20-day moving average.  The session provided another opportunity to the “buy-the-dip” crowd, who stepped in to support the benchmark at the lows of the day.  Overall, despite the over 24% rise in the volatility index (VIX) during the past week, the market index remains very stable, unwilling to move more than a fraction of a percent in a single day.  A close below the 20 and 50-day moving averages could change things, but, until that occurs, there is very little at present to shake investors loose of their long exposure to stocks.

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One of the reasons that stocks have remained as stable as they are this year is the ongoing rotation that has enticed investors from one sector to another.  Defensive sectors of consumer staples and utilities are presently the flavour of the day, while the previously hot energy sector abruptly turns lower.  The S&P 500 energy sector index was lower by 1.54% by Tuesday’s closing bell, testing its 50-day moving average for the second time in the past month.  A negative divergence with respect to MACD suggests waning buying pressures, possibly capping upside potential over the near-term as investors harvest their losses in this sector before the year is complete.  A retracement in the price of oil is acting as a catalyst following a parabolic rise in the commodity over the past couple of months.  The commodity is presently testing previous resistance around $55.  Seasonally, the price of oil tends to decline into early December, resulting in underperformance for the energy sector benchmark over the same timeframe.

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Energy Sector Seasonal Chart

ENERGY Relative to the S&P 500
ENERGY Relative to the S&P 500

ENERGY Monthly Averages

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Crude Oil Futures (CL) Seasonal Chart

FUTURE_CL1 Monthly Averages

The pressure imposed by the energy sector is taking a bite out of the strength of the TSX Composite, which gapped below its 20-day moving average during the session.  Momentum indicators have been negatively diverging from price for the past month.   Previous horizontal resistance at 15,800 provides the next level of support, followed by the 50-day moving average around 15,665.  Seasonally, the Canadian equity benchmark enters its period of strength relative to the S&P 500 Index around the start of December.

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S&P/TSX Composite index Seasonal Chart

^GSPTSE Relative to the S&P 500
^GSPTSE Relative to the S&P 500

^GSPTSE Monthly Averages

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.90.

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Seasonal charts of companies reporting earnings today:

Aegean Marine Petroleum Network Inc. (ANW) Seasonal Chart Children's Place, Inc. (The) (PLCE) Seasonal Chart Cisco Systems, Inc. (CSCO) Seasonal Chart Hillenbrand Inc (HI) Seasonal Chart JA Solar Holdings, Co., Ltd. (JASO) Seasonal Chart L Brands, Inc. (LB) Seasonal Chart Meritor, Inc. (MTOR) Seasonal Chart NetApp, Inc. (NTAP) Seasonal Chart NetEase, Inc. (NTES) Seasonal Chart Sally Beauty Holdings, Inc. (SBH) Seasonal Chart Semiconductor Manufacturing International Corporation (SMI) Seasonal Chart Smart (SFS) Seasonal Chart Spire Inc. (SR) Seasonal Chart Target Corporation (TGT) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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