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Stock Market Outlook for November 20, 2018

S&P 500 Index back to support around 2685, possibly the neckline to a short-term head-and-shoulders pattern.

 

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:

Houston Wire & Cable Co. (NASD:HWCC) Seasonal Chart

Houston Wire & Cable Co. (NASD:HWCC) Seasonal Chart

Vale (ADR) (NYSE:VALE) Seasonal Chart

Vale (ADR) (NYSE:VALE) Seasonal Chart

United Rentals, Inc.  (NYSE:URI) Seasonal Chart

United Rentals, Inc. (NYSE:URI) Seasonal Chart

Taseko Mines Limited  (TSE:TKO) Seasonal Chart

Taseko Mines Limited (TSE:TKO) Seasonal Chart

United States Steel Corporation  (NYSE:X) Seasonal Chart

United States Steel Corporation (NYSE:X) Seasonal Chart

Century Aluminum Co (NASDAQ:CENX) Seasonal Chart

Century Aluminum Co (NASDAQ:CENX) Seasonal Chart

GSE Systems, Inc. (AMEX:GVP) Seasonal Chart

GSE Systems, Inc. (AMEX:GVP) Seasonal Chart

Teck Resources Limited (TSE:TCK-b) Seasonal Chart

Teck Resources Limited (TSE:TCK-b) Seasonal Chart

M-I Homes, Inc. (NYSE:MHO) Seasonal Chart

M-I Homes, Inc. (NYSE:MHO) Seasonal Chart

Arconic, Inc. (NYSE:ARNC) Seasonal Chart

Arconic, Inc. (NYSE:ARNC) Seasonal Chart

CBRE Group, Inc. (NYSE:CBG) Seasonal Chart

CBRE Group, Inc. (NYSE:CBG) Seasonal Chart

Olympic Steel, Inc. (NASD:ZEUS) Seasonal Chart

Olympic Steel, Inc. (NASD:ZEUS) Seasonal Chart

Fluor Corp. (NYSE:FLR) Seasonal Chart

Fluor Corp. (NYSE:FLR) Seasonal Chart

 

Upcoming BNN Appearance:

I will be on BNN’s Market Call Tonight at 6:00pm ET this Friday, November 23rd taking your calls on Technical Analysis and Seasonal Investing.  CALL TOLL-FREE 1-855-326-6266,  EMAIL marketcall@bnnbloomberg.ca,  or TWEET @MarketCall.

 

The Markets

Stocks sold off on Monday as the weakness in technology sector continued.  This follows a meeting of Asian-Pacific leaders over the weekend that failed to reach an agreement on a communiqué amidst trade tensions between the US and China.  The S&P 500 Index ended down by 1.66%, once again testing support around 2685.  A break of this level would likely have significant negative implications for stocks  The negative start to the week comes as traders typically start step away from their desks for the Thanksgiving festivities.  Markets in the US are closed on Thursday and close early on Friday, which typically provides the ideal environment for stocks to drift higher.   The S&P 500 Index has averaged a gain of 0.73% in this week with 69% of periods showing gains.  The days surrounding the holiday Thursday provide the meat of the return, gaining 0.34% in each session and showing gains around 75% of the time.  Monday’s performance certainly leaves some unease going into this typically positive period ahead.  As long as the highlighted level of support on the S&P 500 Index holds, the weakness could provide an ideal entry point to the frequently positive holiday trade ahead.

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Defensive sectors managed to buck the losses on the day with utilities and REITs closing higher in a negative tape.  The weakness was primarily isolated in the momentum stocks within the technology sector as the growth play unwinds amidst doubt over the strength of the economy.  The S&P 500 Technology Sector Index plunged 3.8%, moving back to the low charted at the end of October.  Resistance around major moving averages has been apparent over the past few weeks.  Momentum indicators continue to chart a trend of lower-lows and lower-highs, a trend that has been in place since the summer.  The move is peculiar from a seasonal perspective as technology is typically one of the best performing segments of the market in the fourth quarter.  A rise in consumer and business spending typically gives lift to sector constituents, but clearly the market has other motives.

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Technology Sector Seasonal Chart

TECHNOLOGY Relative to the S&P 500
TECHNOLOGY Relative to the S&P 500

TECHNOLOGY Monthly Averages

While there was plenty to be discouraged of, from a seasonal perspective, in Monday’s session, there were some glimmers of hope.  Homebuilding stocks closed higher despite an unexpected dip in homebuilder sentiment for November.  The housing market index fell eight points to 60 in the current month, well below the consensus analysts estimate of 68.  Readings above 50 are an indication of homebuilder optimism  Reports on housing starts and existing home sales will be released in the days ahead, likely to influence price action in the near-term, but the ability of investors to digest the negative headline is suggestive that a tradable low may be upon us.  Seasonally, homebuilding stocks rise through the beginning of February, just as the spring home buying season begins.

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Home Building Industry Seasonal Chart
S5HOME Index Relative to the S&P 500S5HOME Index Relative to the Sector

S5HOME Index Monthly Averages

Sentiment on Monday, as gauged by the put-call ratio, ended close to neutral at 0.96.

 

 

 

 

 

Seasonal charts of companies reporting earnings today:

21Vianet Group, Inc. (VNET) Seasonal Chart Analog Devices, Inc. (ADI) Seasonal Chart Autodesk, Inc. (ADSK) Seasonal Chart Best Buy Co., Inc. (BBY) Seasonal Chart   Caleres, Inc. (CAL) Seasonal Chart Campbell Soup Company (CPB) Seasonal Chart  Copart, Inc. (CPRT) Seasonal Chart Dycom Industries, Inc. (DY) Seasonal Chart Esterline Technologies Corporation (ESL) Seasonal Chart Foot Locker, Inc. (FL) Seasonal Chart Gap, Inc. (The) (GPS) Seasonal Chart Golden Ocean Group Limited (GOGL) Seasonal Chart Hormel Foods Corporation (HRL) Seasonal Chart Jacobs Engineering Group Inc. (JEC) Seasonal Chart Keysight Technologies Inc. (KEYS) Seasonal Chart Kohl's Corporation (KSS) Seasonal Chart LATAM Airlines Group S.A. (LTM) Seasonal Chart Lowe's Companies, Inc. (LOW) Seasonal Chart Maximus, Inc. (MMS) Seasonal Chart Medtronic plc (MDT) Seasonal Chart Navios Maritime Holdings Inc. (NM) Seasonal Chart NewJersey Resources Corporation (NJR) Seasonal Chart QAD Inc. (QADA) Seasonal Chart Ross Stores, Inc. (ROST) Seasonal Chart  Ship Finance International Limited (SFL) Seasonal Chart Stage Stores, Inc. (SSI) Seasonal Chart Star Bulk Carriers Corp. (SBLK) Seasonal Chart Target Corporation (TGT) Seasonal Chart TJX Companies, Inc. (The) (TJX) Seasonal Chart  Vascular Biogenics Ltd. (VBLT) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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