Contact | RSS Feed

Stock Market Outlook for December 11, 2018

Cracks forming in the level of support below the S&P 500 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:

Cooper-Standard Holdings Inc. (NYSE:CPS) Seasonal Chart

Cooper-Standard Holdings Inc. (NYSE:CPS) Seasonal Chart

Owens & Minor Inc. Holding Co. (NYSE:OMI) Seasonal Chart

Owens & Minor Inc. Holding Co. (NYSE:OMI) Seasonal Chart

Gabriel Resources (TSE:GBU) Seasonal Chart

Gabriel Resources (TSE:GBU) Seasonal Chart

Canacol Energy (TSE:CNE) Seasonal Chart

Canacol Energy (TSE:CNE) Seasonal Chart

Charter Communications Inc. (NASD:CHTR) Seasonal Chart

Charter Communications Inc. (NASD:CHTR) Seasonal Chart

The Estee Lauder Companies Inc.  (NYSE:EL) Seasonal Chart

The Estee Lauder Companies Inc. (NYSE:EL) Seasonal Chart

Student Transportation (TSE:STB) Seasonal Chart

Student Transportation (TSE:STB) Seasonal Chart

 

 

The Markets

Stocks closed relatively flat on Monday as investors continued to debate the growing risks that trade between China and the US will impose on the economy.  The S&P 500 Index closed higher by just under two-tenths of a percent, reversing a sharp loss that was recorded during the morning session. The October/November lows remain as support on a closing basis, but they are under threat.

image

The hourly chart shows the increasing vulnerability at the October/November lows.  The benchmark broke below support at 2630 in early trade on Monday, but came back to end the day just above this level by the closing bell.  Cracks like these degrade the integrity of the level of support below, suggesting an increasing likelihood of a breakdown ahead.  But while selling pressures may escalate upon a break of the October/November lows as stops are triggered, the negative sentiment and maximum selling pressures may actually exhaust downside momentum, if they haven’t been already following Monday’s reversal.  The Relative Strength Index (RSI) on the hourly chart shows a positive divergence compared to price, which is suggestive of waning selling pressures.  Excessive bearish sentiment heading into the back half of December could provide the ideal backdrop for a rally during the Santa Claus Rally period into the new year.

image

On the economic front, a report on Job Openings continued to reiterate that opportunities are plentiful in the US economy. The headline print of the Job Openings and Labor Turnover Survey indicated that openings increased by 1.7% to 7.079 million in October. Analysts were expecting a print of 7.00 million. To put the number into perspective, the Bureau of Labor Statistics indicated that 6.075 million individuals were considered unemployed in October, suggesting that at least one job was available for each person out of work. A significant skills gap is primarily responsible from matching the supply of labor with demand. Stripping out the seasonal adjustments, openings actually increased by 4.2% to 7.32 million in October. The average increase in the month, based on the past 20 years, is 7.5%. The result puts the year-to-date change at +40.1%, which is much stronger than the 27.0% increase that is average by this point in the year. This is the best performance for openings since 2014.  Seasonally, openings tend to fall off sharply in the final two months of the year as companies limit hiring activity around the year-end holidays. Subscribers to our service were given greater insight on what is driving openings and hiring activity, as well given indication why the quit rate may be a leading indication to an economic downturn.  Interested in receiving our commentary and analysis right to your inbox?  Simply subscribe via the following link: https://charts.equityclock.com/subscribe

Job Openings: Total Nonfarm Seasonal Chart

Monthly Job Openings: Total Nonfarm Data

Sentiment on Monday, as gauged by the put-call ratio, ended bearish at 1.07.

 

 

 

 

 

Seasonal charts of companies reporting earnings today:

American Eagle Outfitters, Inc. (AEO) Seasonal Chart Arrowhead Pharmaceuticals, Inc. (ARWR) Seasonal Chart Dave & Buster's Entertainment, Inc. (PLAY) Seasonal Chart DSW Inc. (DSW) Seasonal Chart Francesca's Holdings Corporation (FRAN) Seasonal Chart Panhandle Royalty Company (PHX) Seasonal Chart 

 

 

S&P 500 Index

image

image

 

 

TSE Composite

image

image

 

Sponsored By...
Seasonal Advantage Portfolio by CastleMoore

Comments are closed.