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Stock Market Outlook for November 14, 2018

Bearish crossover imminent on the small-cap Russell 2000 Index.

 

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:

Cedar Fair L P (NYSE:FUN) Seasonal Chart

Cedar Fair L P (NYSE:FUN) Seasonal Chart

Rockwell Collins (NYSE:COL) Seasonal Chart

Rockwell Collins (NYSE:COL) Seasonal Chart

Embraer Aircraft (NYSE:ERJ) Seasonal Chart

Embraer Aircraft (NYSE:ERJ) Seasonal Chart

Interfor Corp (TSE:IFP) Seasonal Chart

Interfor Corp (TSE:IFP) Seasonal Chart

Smith and Nephew PLC (NYSE:SNN) Seasonal Chart

Smith and Nephew PLC (NYSE:SNN) Seasonal Chart

CGI Group, Inc. (NYSE:GIB) Seasonal Chart

CGI Group, Inc. (NYSE:GIB) Seasonal Chart

Assurant Inc. (NYSE:AIZ) Seasonal Chart

Assurant Inc. (NYSE:AIZ) Seasonal Chart

Becton, Dickinson and Co. (NYSE:BDX) Seasonal Chart

Becton, Dickinson and Co. (NYSE:BDX) Seasonal Chart

Centene Corp (NYSE:CNC) Seasonal Chart

Centene Corp (NYSE:CNC) Seasonal Chart

 

 

The Markets

Stocks closed mildly lower on Tuesday, unable to find a footing following Monday‚Äôs selloff.  The S&P 500 Index shed 0.15%, remaining below its 200-day moving average, which was broken at the start of the week.  Reverting to the hourly chart that we presented yesterday, the large-cap index had initially traded up to the level of resistance at 2755 before peeling back through the rest of the session, confirming the importance of this pivot point.  The price action is suggestive that a test of the October low, or at least the gap between 2685 and 2700, is increasingly likely.  In the Seasonal Advantage Portfolio that we manage in partnership with CastleMoore, we have held back some cash following our buying spree in the back half of October in anticipation of a retest of the low and are looking to deploy that cash upon confirmation of support.  If you would like to learn more about our three-pronged approach involving seasonal, technical, and fundamental analysis, email us at seasonalportfolio@equityclock.com.

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One of the concerning technical indicators that caught the attention of market commentators on Tuesday was the imminent bearish crossover of the 50 and 200 day moving averages on the small-cap Russell 2000 Index.  While we don’t place much merit in the crossover event itself as a timing signal, the weakness in the benchmark is very much indicative of investor sentiment.  The benchmark has been underperforming the broader equity market since June, providing indication of the risk-off sentiment that was proliferating within the market well before the eventual collapse in prices in October.  The benchmark recently tested support around 1450, a break of which could confirm a major topping pattern.  The benchmark is showing signs of resistance closer to its 200-day moving average, certainly warranting caution pertaining to the longer-term trend.  Seasonally, the benchmark starts to outperform the S&P 500 Index in the month of November, with a core period of strength centered in the last half of December.

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RUSSELL 2000 Index Seasonal Chart

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

$RUT Monthly Averages

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

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Seasonal charts of companies reporting earnings today:

Cinedigm Corp (CIDM) Seasonal Chart Cisco Systems, Inc. (CSCO) Seasonal Chart Copa Holdings, S.A. (CPA) Seasonal Chart Digital Ally, Inc. (DGLY) Seasonal Chart  Eastside Distilling, Inc. (EAST) Seasonal Chart Griffon Corporation (GFF) Seasonal Chart Macy's Inc (M) Seasonal Chart Meritor, Inc. (MTOR) Seasonal Chart Neovasc Inc. (NVCN) Seasonal Chart NetApp, Inc. (NTAP) Seasonal Chart NetEase, Inc. (NTES) Seasonal Chart NovaBay Pharmaceuticals, Inc. (NBY) Seasonal Chart Payment Data Systems, Inc. (PYDS) Seasonal Chart Sigma Labs, Inc. (SGLB) Seasonal Chart Titan Pharmaceuticals, Inc. (TTNP) Seasonal Chart Vipshop Holdings Limited (VIPS) Seasonal Chart Wheaton Precious Metals Corp. (WPM) Seasonal Chart 

 

 

S&P 500 Index

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TSE Composite

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