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Stock Market Outlook for October 3, 2018

Gold attempting to conclude its period of seasonal strength with a bang!

 

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:

Nutrien Ltd. (TSE:NTR.TO) Seasonal Chart

Nutrien Ltd. (TSE:NTR.TO) Seasonal Chart

Sykes Enterprises, Inc. (NASD:SYKE) Seasonal Chart

Sykes Enterprises, Inc. (NASD:SYKE) Seasonal Chart

Ceva Inc. (NASD:CEVA) Seasonal Chart

Ceva Inc. (NASD:CEVA) Seasonal Chart

Synaptics, Inc. (NASD:SYNA) Seasonal Chart

Synaptics, Inc. (NASD:SYNA) Seasonal Chart

Fair Isaac & Co., Inc. (NYSE:FICO) Seasonal Chart

Fair Isaac & Co., Inc. (NYSE:FICO) Seasonal Chart

Cree, Inc. (NASD:CREE) Seasonal Chart

Cree, Inc. (NASD:CREE) Seasonal Chart

CF Industries Holdings, Inc. (NYSE:CF) Seasonal Chart

CF Industries Holdings, Inc. (NYSE:CF) Seasonal Chart

ACI Worldwide Inc  (NASDAQ:ACIW) Seasonal Chart

ACI Worldwide Inc (NASDAQ:ACIW) Seasonal Chart

NVIDIA Corporation  (NASDAQ:NVDA) Seasonal Chart

NVIDIA Corporation (NASDAQ:NVDA) Seasonal Chart

Resources Connection Inc. (NASD:RECN) Seasonal Chart

Resources Connection Inc. (NASD:RECN) Seasonal Chart

Cameco Corp. (NYSE:CCJ) Seasonal Chart

Cameco Corp. (NYSE:CCJ) Seasonal Chart

Piper Jaffray Cos. (NYSE:PJC) Seasonal Chart

Piper Jaffray Cos. (NYSE:PJC) Seasonal Chart

Textron Inc.  (NYSE:TXT) Seasonal Chart

Textron Inc. (NYSE:TXT) Seasonal Chart

 

 

The Markets

Stocks closed mixed on Tuesday as investors attempt to gauge the possibility of further trade deals between the US and other countries around the globe.  The S&P 500 Index closed down by around a point, with returns bookended by the performance of consumer discretionary and utilities, both of which moved in opposite directions on the day.  Evidence of risk aversion was apparent throughout the session.  The ratio of the S&P 500 Consumer Staples Sector Index versus the Consumer Discretionary Sector Index is attempting to chart an intermediate-term bottom following outperformance in the cyclical sector for the past couple of years.  Seasonally, the staples sector tends to outperform the discretionary sector  between the end of April and the beginning of October, but strength in the consumer in 2018 has kept investors focussed on the cyclical constituents throughout this defensive period.  The ratio provides an appropriate gauge of investor sentiment going into the “risk-on” period for stocks between October and May, therefore further monitoring is warranted.

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Flipping to the commodity market, the seasonal trade in Gold may be concluding its period of seasonal strength with a bang.  The trade has been a bust so far this year as dollar strength and subdued volatility  take a toll on this volatility hedge.  Tuesday’s 1.28% gain in the commodity indicates the first sign of support for the precious metal that we have seen all summer, bouncing from a low around $1180.  A break above resistance around the 50-day moving average could see a swift retracement of the decline realized between June and August, possibly reaching back towards previous support around the 200-day moving average around $1280.  Encouraging for the prospects of the precious metal is that the miners have been outperforming the commodity for the past few weeks, an indication of investor optimism in higher prices ahead.  The Gold miners ETF (GDX) is charting a short-term head-and-shoulders pattern with calculated upside potential towards previous resistance around $20.50.  Seasonally, gold mining stocks tend to decline through the fourth quarter, underperforming the broader market in the process.

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Gold Futures (GC) Seasonal Chart

FUTURE_GC1 Relative to the S&P 500
FUTURE_GC1 Relative to the S&P 500

FUTURE_GC1 Monthly Averages

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NYSE Gold Bugs Index Seasonality

$HUI Relative to the S&P 500
$HUI Relative to the S&P 500

Monthly Seasonal NYSE Gold Bugs Index

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.79.

 

 

 

 

Seasonal charts of companies reporting earnings today:

Acuity Brands Inc (AYI) Seasonal Chart Lennar Corporation (LEN) Seasonal Chart Pier 1 Imports, Inc. (PIR) Seasonal Chart Resources Connection, Inc. (RECN) Seasonal Chart RPM International Inc. (RPM) Seasonal Chart Synnex Corporation (SNX) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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