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Stock Market Outlook for December 14, 2018


Gains in defensive sectors may be capped going into the back half of December.

 

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:

Western Forest Products, Inc. (TSE:WEF) Seasonal Chart

Western Forest Products, Inc. (TSE:WEF) Seasonal Chart

USG Corporation (NYSE:USG) Seasonal Chart

USG Corporation (NYSE:USG) Seasonal Chart

BHP Billiton Limited (ADR) (NYSE:BHP) Seasonal Chart

BHP Billiton Limited (ADR) (NYSE:BHP) Seasonal Chart

Sasol Limited (ADR) (NYSE:SSL) Seasonal Chart

Sasol Limited (ADR) (NYSE:SSL) Seasonal Chart

Boston Scientific Corporation (NYSE:BSX) Seasonal Chart

Boston Scientific Corporation (NYSE:BSX) Seasonal Chart

Kansas City Southern Corp. (NYSE:KSU) Seasonal Chart

Kansas City Southern Corp. (NYSE:KSU) Seasonal Chart

Rio Tinto plc (ADR) (NYSE:RIO) Seasonal Chart

Rio Tinto plc (ADR) (NYSE:RIO) Seasonal Chart

Skechers USA Inc (NYSE:SKX) Seasonal Chart

Skechers USA Inc (NYSE:SKX) Seasonal Chart

Ford Motor Company (NYSE:F) Seasonal Chart

Ford Motor Company (NYSE:F) Seasonal Chart

Goldcorp Inc. (USA) (NYSE:GG) Seasonal Chart

Goldcorp Inc. (USA) (NYSE:GG) Seasonal Chart

TORC OIL AND GAS LTD (TSE:TOG) Seasonal Chart

TORC OIL AND GAS LTD (TSE:TOG) Seasonal Chart

EnCana Corp. (NYSE:ECA) Seasonal Chart

EnCana Corp. (NYSE:ECA) Seasonal Chart

 

 

The Markets

Stocks traded rather flat on Thursday as investors looked for the next catalyst to move markets.  The S&P 500 Index closed down by a mere two basis points, charting a rather indecisive doji candlestick.  The market appears to be coiling up around horizontal support at 2630, potentially setting up for an explosive move, one way or the other.  Major moving averages remain as hurdles overhead, including the 20-day presently hovering around 2688.

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The session had a defensive tilt as materials, consumer discretionary, and financials ended firmly in the red, while staples, utilities, and REITs saw another day of gains.  But some of these defensive plays may see their gains capped in the near-term.  The Utilities Sector ETF (XLU) is bumping up against the rising trendline resistance and the widely trade REIT ETF (IYR) is showing signs of a double- top.  Both sector ETFs have been outperformers for much of the year, recovering from the selloff related to rate fears that took a toll to start the year. Going into the end of the quarter and the end of the year, mean reversion can often play out as investors are forced to sell those sectors that they’re overweight due to market conditions and buy those that they are underweight.  This shift could see funds flow from defensive sectors and back into risk assets as the year nears a close.  Seasonally, the back half of December is typically the strongest time of the month and one of the strongest times of the year.  The slower newsflow, portfolio reallocations, and the trimming of negative bets into the holidays are all factors for this positive bias.

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Sentiment on Thursday, as gauged by the put-call ratio, ended bearish at 1.19.

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Sectors and Industries entering their period of seasonal strength:

S&P/TSX Composite index Seasonal Chart

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

$TSX Monthly Averages

 

 

Seasonal charts of companies reporting earnings today:

  • No significant earnings scheduled for today

 

S&P 500 Index

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TSE Composite

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