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Stock Market Outlook for December 19, 2018


Looking at some key levels for the S&P 500 Capitalization Weighted and Equally Weighted Indexes.

 

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:

Iconix Brand Group, Inc. (NASD:ICON) Seasonal Chart

Iconix Brand Group, Inc. (NASD:ICON) Seasonal Chart

HFF Inc. (NYSE:HF) Seasonal Chart

HFF Inc. (NYSE:HF) Seasonal Chart

Mag Silver (TSE:MAG) Seasonal Chart

Mag Silver (TSE:MAG) Seasonal Chart

Tucows Inc. (NASD:TCX) Seasonal Chart

Tucows Inc. (NASD:TCX) Seasonal Chart

Solitario Exploration & Royalty (TSE:SLR) Seasonal Chart

Solitario Exploration & Royalty (TSE:SLR) Seasonal Chart

Detour Gold (TSE:DGC) Seasonal Chart

Detour Gold (TSE:DGC) Seasonal Chart

Texas Instruments Incorporated  (NYSE:TXN) Seasonal Chart

Texas Instruments Incorporated (NYSE:TXN) Seasonal Chart

Energy Transfer Equity LP (NYSE:ETE) Seasonal Chart

Energy Transfer Equity LP (NYSE:ETE) Seasonal Chart

 

 

The Markets

Stocks ended mixed on Tuesday as investors continue to battle with concerns pertaining to global growth.  The S&P 500 Index closed essentially flat, giving up an over one percent rally achieved intraday.  The benchmark continues to hold the February lows at 2532.  Energy was the big laggard during the session with the ETF that tracks the sector showing a loss of 2.36%.  An over 7% plunge in the price of oil was the factor.  We’ll obtain greater insight as to the state of the oil market on Wednesday when the the EIA releases its petroleum status report.  We’ll send out analysis of the results to Equity Clock Subscribers in the afternoon.

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Again, trying to keep on the theme that we started yesterday of finding the positives in the market (since the media is full of negative commentary lately), we turn to the S&P 500 Equally Weighted Index.  We’ll look past the fact that the benchmark has broken convincingly below significant support at 3850 and the the break of the long term trading range projects a downside move towards 3350, or another 11% below present levels.  Instead we’ll focus on the fact that the benchmark is presently testing its 38.2% Fibonacci retracement level of the move between the low in 2016 and high seen this past September.  Typically, these Fibonacci retracement levels can provide a good gauge of the trading activity moving forward with the smaller retracement level (38.2%) indicating an on gonging bullish trend (as long as it holds), while the 61.8% retracement level more indicative of a bearish trend.  Coincidentally, the 61.8% retracement level is around 3350, the aforementioned target of the recent breakdown.  The 200-day moving average of the benchmark is rolling over, capping any upside attempt.  We will be watching over the coming days as to whether the smaller retracement zone holds.

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On the economic front, a report on housing starts indicated that activity rebounded in the month of November. The headline print indicated that starts increased by 3.2% to a seasonally adjusted annual rate of 1.256 million. Analysts were expecting a pace of 1.221 million. Permits came in at 1.328 million, also better than the forecast of a 1.255 million pace. Stripping out the seasonal adjustments, starts actually fell by 9.6%, which is better than the average decline for this time of year of 13.1%. The result puts the year-to-date change at +17.8%, which is above the 13.4% average change by this point in the year. This is the best pace since 2015.  Seasonally, housing starts tend to decline into the winter months as weather conditions become less favourable for construction projects.  Equity Clock Subscribers were given greater insight into the metrics behind the aggregate result and why builders may be stockpiling plots of land on which to build.  Interested in receiving this intraday commentary right in your inbox.  Subscribe via the following link: https://charts.equityclock.com/subscribe

Housing Starts Seasonal Chart

Monthly Housing Starts Data

North of the border, manufacturing sales in Canada showed a weak headline result for October. The seasonally adjusted print showed a decline of 0.1% in first month of the fourth quarter, missing estimates that called for a 0.2% rise. Stripping out the seasonal adjustments, manufacturing sales actually increased by 4.6%, which is much stronger than the 1.5% increase that is average for this time of year. The year-to-date change is now 2.0% above average through the end of October, which is the best pace since 2014. October has typically marked the peak of the year for sales in this segment of the economy, but that award remains with the month of May when strong prices and robust activity fuelled above average gains through the spring.  Further insight on this report was provided to subscribers intraday.

Sales of goods manufactured (shipments) Seasonal Chart

Monthly Sales of goods manufactured (shipments) Data

Sentiment on Tuesday, as gauged by the put-call ratio, ended bearish at 1.09.

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Sectors and Industries entering their period of seasonal strength:

RUSSELL 2000 Index Seasonal Chart

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

$RUT Monthly Averages

 

 

Seasonal charts of companies reporting earnings today:

General Mills, Inc. (GIS) Seasonal Chart Herman Miller, Inc. (MLHR) Seasonal Chart NCI Building Systems, Inc. (NCS) Seasonal Chart Paychex, Inc. (PAYX) Seasonal Chart Pier 1 Imports, Inc. (PIR) Seasonal Chart  Rite Aid Corporation (RAD) Seasonal Chart  Winnebago Industries, Inc. (WGO) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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