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Stock Market Outlook for November 9, 2018

Energy sector index charting an outside reversal candlestick at previous trendline support.

 

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:

Lowe's Companies, Inc.  (NYSE:LOW) Seasonal Chart

Lowe’s Companies, Inc. (NYSE:LOW) Seasonal Chart

Premier Financial Bancorp, Inc. (NASD:PFBI) Seasonal Chart

Premier Financial Bancorp, Inc. (NASD:PFBI) Seasonal Chart

Ag Growth International Inc. (TSE:AFN) Seasonal Chart

Ag Growth International Inc. (TSE:AFN) Seasonal Chart

Two Harbors Investment Corp. (NYSE:TWO) Seasonal Chart

Two Harbors Investment Corp. (NYSE:TWO) Seasonal Chart

Avid Technology, Inc. (NASD:AVID) Seasonal Chart

Avid Technology, Inc. (NASD:AVID) Seasonal Chart

The Home Depot, Inc.  (NYSE:HD) Seasonal Chart

The Home Depot, Inc. (NYSE:HD) Seasonal Chart

KB Home  (NYSE:KBH) Seasonal Chart

KB Home (NYSE:KBH) Seasonal Chart

Sotheby's  (NYSE:BID) Seasonal Chart

Sotheby’s (NYSE:BID) Seasonal Chart

Pulte Homes, Inc.  (NYSE:PHM) Seasonal Chart

Pulte Homes, Inc. (NYSE:PHM) Seasonal Chart

Xerox Corporation  (NYSE:XRX) Seasonal Chart

Xerox Corporation (NYSE:XRX) Seasonal Chart

Capital Sr Living Corp. (NYSE:CSU) Seasonal Chart

Capital Sr Living Corp. (NYSE:CSU) Seasonal Chart

Avery Dennison Corporation (NYSE:AVY) Seasonal Chart

Avery Dennison Corporation (NYSE:AVY) Seasonal Chart

The Walt Disney Company  (NYSE:DIS) Seasonal Chart

The Walt Disney Company (NYSE:DIS) Seasonal Chart

 

 

The Markets

Stocks closed mildly lower on Thursday as investors digested the gains from the past few sessions.  The S&P 500 Index ended lower by a quarter of one percent, dragged down by weakness in the energy sector as the price of oil plunged to a new multi-month low.  The S&P 500 Energy Sector Index fell by 2.2%, charting an outside reversal candlestick around its declining 20-day moving average.  The sector has been underperforming the market since the end of the last major period of seasonal strength in the Spring, breaking below a long-term ascending triangle pattern, which would have otherwise presented a bullish setup for the beleaguered market segment.  The weight on the benchmark now threatens a break of support around 480, as opposed to the break of resistance around 580, which seemed like an increasingly likely outcome this past summer.  While forecasts for lower oil prices are beginning to appear, which some are suggesting would be a boost to the consumer during the holiday season, the near-term benefits could turn into a significant headwind if the weakness is sustained.  Recall in 2015 and into 2016 when the plunge in the price of oil took a toll on not just the energy industry, but the manufacturing economy as a whole.  Manufacturing has been the bright spot in the economy, therefore we would be more concerned that the longer-term risks to the broader economy far outweigh the near-term reward.  Seasonally, oil prices weaken through to the start of December, on average.

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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

On the economic front, vehicle sales for the month of October were weaker than average.  Total Vehicle Sales were down by 5.1% in the month, which is below the 0.8% decline that is average for this time of year.  The result puts the year-to-date change 8.1% below the seasonal average trend.  While showing a better result than last year, the performance this year is still the third weakest since the end of the last recession.  The justification for the peak auto argument is clear.  Weakness in the month was fuelled by truck sales, which negatively diverged from seasonal norms in the month.  Domestic light-weight truck sales were down by 6.1% and foreign light-weight truck sales were lower by 5.9%.  Each category has averaged a gain of 1.1% and 2.2%, respectively, in October over the past 20 years.  Small truck sales are typically a good gauge of the strength of small business activity, therefore the sluggish result in the month certainly presents some concern.  Seasonally, vehicle sales continue to weaken into the month of November, then gain sharply in December as end of year purchases “drive” activity.

Total Vehicle Sales Seasonal Chart

Monthly Total Vehicle Sales Data

Total Vehicle Sales Seasonal Chart

Motor Vehicle Retail Sales: Domestic Autos Seasonal Chart Motor Vehicle Retail Sales: Domestic Light Weight Trucks Seasonal Chart Motor Vehicle Retail Sales: Heavy Weight Trucks Seasonal Chart Motor Vehicle Retail Sales: Foreign Autos Seasonal Chart Motor Vehicle Retail Sales: Foreign Light Weight Trucks Seasonal Chart

Sentiment on Thursday, as gauged by the put-call ratio, ended neutral at 0.98.

 

 

Sectors and Industries entering their period of seasonal strength:

S&P/TSX Capped Health Care Seasonal Chart

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

$SPTHC Monthly Averages

 

 

Seasonal charts of companies reporting earnings today:

Asure Software Inc (ASUR) Seasonal Chart athenahealth, Inc. (ATHN) Seasonal Chart  China Automotive Systems, Inc. (CAAS) Seasonal Chart E.W. Scripps Company (The) (SSP) Seasonal Chart Enerplus Corporation (ERF) Seasonal Chart  Essent Group Ltd. (ESNT) Seasonal Chart  GNC Holdings, Inc. (GNC) Seasonal Chart McClatchy Company (The) (MNI) Seasonal Chart  Moneygram International, Inc. (MGI) Seasonal Chart Motorcar Parts of America, Inc. (MPAA) Seasonal Chart Natural Resource Partners LP (NRP) Seasonal Chart  Omeros Corporation (OMER) Seasonal Chart Oxford Immunotec Global PLC (OXFD) Seasonal Chart Performant Financial Corporation (PFMT) Seasonal Chart PLx Pharma Inc. (PLXP) Seasonal Chart Potbelly Corporation (PBPB) Seasonal Chart  RadNet, Inc. (RDNT) Seasonal Chart Revlon, Inc. (REV) Seasonal Chart Rockwell Medical, Inc. (RMTI) Seasonal Chart STARWOOD PROPERTY TRUST, INC. (STWD) Seasonal Chart Superior Industries International, Inc. (SUP) Seasonal Chart Surmodics, Inc. (SRDX) Seasonal Chart TC PipeLines, LP (TCP) Seasonal Chart TerraForm Power, Inc. (TERP) Seasonal Chart TG Therapeutics, Inc. (TGTX) Seasonal Chart Tribune Media Company (TRCO) Seasonal Chart Ubiquiti Networks, Inc. (UBNT) Seasonal Chart  UTStarcom Holdings Corp (UTSI) Seasonal Chart 

 

 

S&P 500 Index

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TSE Composite

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