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Stock Market Outlook for January 9, 2019


Percentage of stocks in the S&P 500 rebounding back above 20%, typically a good sign of a significant low for the benchmark.

 

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:

ITT Corporation  (NYSE:ITT) Seasonal Chart

ITT Corporation (NYSE:ITT) Seasonal Chart

Titan Machinery Inc. (NASD:TITN) Seasonal Chart

Titan Machinery Inc. (NASD:TITN) Seasonal Chart

Core Laboratories N V (NYSE:CLB) Seasonal Chart

Core Laboratories N V (NYSE:CLB) Seasonal Chart

Jack in the Box Inc.  (NASDAQ:JACK) Seasonal Chart

Jack in the Box Inc. (NASDAQ:JACK) Seasonal Chart

Chipotle Mexican Grill, Inc. (NYSE:CMG) Seasonal Chart

Chipotle Mexican Grill, Inc. (NYSE:CMG) Seasonal Chart

Cinemark Holdings Corp. (NYSE:CNK) Seasonal Chart

Cinemark Holdings Corp. (NYSE:CNK) Seasonal Chart

Kohl's Corporation  (NYSE:KSS) Seasonal Chart

Kohl’s Corporation (NYSE:KSS) Seasonal Chart

 

 

The Markets

Stocks closed firmly higher for a third straight session amidst optimism pertaining to the US-China trade negotiations.  The S&P 500 Index added just less than one percent, continuing to push towards previous support, now resistance at 2600.  Both cyclical and defensive sectors participated in the rally on the day.  The percentage of stocks in the S&P 500 Index trading above 50-day moving averages continues to rebound from one of the lowest levels in the past decade.  The indicator increased by 9% to 26.2% on Tuesday, crossing an important trigger line.  Historically, when this indicator bottoms below 20% and subsequently rebounds, tradable lows have typically followed.  The 50-day moving average is in a position of resistance across many charts, therefore it will likely take some time to heal what remains a fragile market.

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On the economic front, the report on Job Openings and Labor Turnover indicated that opportunities in the economy fell in November. The headline print pointed to a decline in job openings from 7.131 million to 6.888 million, missing the consensus analyst estimate of 7.063 million. This is just the latest in the series of datapoints that suggest economic growth is rolling over. The indicator peaked in August at 7.293 million and has gradually faded since. Stripping out the seasonal adjustments, job openings actually fell by 11.1% to 6.540 million. The average change in openings for the month is -15.3%. The result places the year-to-date change at +25.2%, which is 17.6% above the seasonal average trend and the best performance since 2014. Strength in construction, manufacturing, information, business/professional services, education, and health services openings continue to drive the growth in the aggregate result. Retail openings are the lag.  Seasonally, job openings tend to decline in the last two months of the year before rebounding sharply in January.  Equity Clock Subscribers were given greater insight into the metrics behind report, including the concerns pertaining to hiring and quit activity.  To receive this commentary right to your inbox, subscribe now at https://charts.equityclock.com/subscribe.  Need help subscribing?  Please fill out the contact form at the following link: https://charts.equityclock.com/help

Job Openings: Total Nonfarm Seasonal Chart

Monthly Job Openings: Total Nonfarm Data

North of the border, Statscan released trade data for the month of November.  The headline print indicated that the trade deficit expanded to $2.06 Billion from $850 million previous, the result of a 2.9% decline in exports and a 0.5% decline in imports..  The consensus was for a deficit of $1.9 Billion.  Stripping out the seasonal adjustments, exports actually fell by 5.7%, while imports fell by 3.8%; the average change for each in the month of November is –2.2% and –3.2%, respectively.  Both exports and imports are showing below average growth, year-to-date.  Parsing the details, the downfall in commodity prices into the end of the year looks to have taken a toll on energy and metal exports, which recorded sharp declines in the month of November.  Crude oil exports were lower by 16.7% in the month, refined petroleum energy products were down 27.9%, and metal ores/non-metallic minerals fell 19.5%.  These are pronounced moves during what is already a softer time of year for exports in these areas.  The further decline in the price of oil in month of December is unlikely to improve this dataset anytime soon.  On the import side, while weakness in some of these commodity sensitive categories is evident, there is also weakness showing up in big ticket consumer items such as vehicles and furniture.  These items tend to be core drivers of retail spending in the months ahead as consumers buy goods for the home following the colder winter period.  While vehicle sales in Canada have held up very well, furniture sales did take a notable dip in the month of October.  The activity suggests that retailers may be trimming their orders in anticipation of further weakness ahead.  We have uploaded the charts to the database at the following link: https://charts.equityclock.com/canadian-international-merchandise-trade-exports-imports

Total Canadian Exports of all merchandise Seasonal Chart

Monthly Total Canadian Exports of all merchandise Data

Total Canadian Imports of all merchandise Seasonal Chart

Monthly Total Canadian Imports of all merchandise Data

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.97.

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Seasonal charts of companies reporting earnings today:

Acuity Brands, Inc. (AYI) Seasonal Chart Bed Bath & Beyond Inc. (BBBY) Seasonal Chart Constellation Brands Inc (STZ) Seasonal Chart Franklin Covey Company (FC) Seasonal Chart Greenbrier Companies, Inc. (The) (GBX) Seasonal Chart KB Home (KBH) Seasonal Chart Lennar Corporation (LEN) Seasonal Chart MSC Industrial Direct Company, Inc. (MSM) Seasonal Chart PriceSmart, Inc. (PSMT) Seasonal Chart  Schnitzer Steel Industries, Inc. (SCHN) Seasonal Chart Simulations Plus, Inc. (SLP) Seasonal Chart VOXX International Corporation (VOXX) Seasonal Chart WD-40 Company (WDFC) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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