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Stock Market Outlook for October 8, 2019


Short-term trend of lower-lows and lower-highs remains intact.

 

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:

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ZixIt Corp. (NASD:ZIXI) Seasonal Chart

ZixIt Corp. (NASD:ZIXI) Seasonal Chart

Open Text Corp. (NASD:OTEX) Seasonal Chart

Open Text Corp. (NASD:OTEX) Seasonal Chart

Matrix Service Co. (NASD:MTRX) Seasonal Chart

Matrix Service Co. (NASD:MTRX) Seasonal Chart

Capitol Federal Financial (NASD:CFFN) Seasonal Chart

Capitol Federal Financial (NASD:CFFN) Seasonal Chart

CRA International, Inc. (NASD:CRAI) Seasonal Chart

CRA International, Inc. (NASD:CRAI) Seasonal Chart

DXC Technology Company (NYSE:DXC) Seasonal Chart

DXC Technology Company (NYSE:DXC) Seasonal Chart

First National Financial Corp. (TSE:FN.TO) Seasonal Chart

First National Financial Corp. (TSE:FN.TO) Seasonal Chart

 

 

The Markets

Stocks gyrated around the flatline on Monday as investors wait for the outcome of negotiations between China and the US.  The S&P 500 Index shed just less than half of one percent, dancing around the 50-day moving average throughout the session.  Resistance around the 20-day moving average, now at 2975, has become defined following last week’s selloff to start the week.  The rebound to end the week is now arguably a test of resistance at the 50-day, give or take a few points, which, if confirmed as a cap, presents intermediate concerns.  Defensive areas of the market led the weakness during the session, perhaps an indication that investors are neutralizing portfolios ahead of what could be a binary event over the coming days when the results of the trade negotiations are released.

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The short-term view of the large-cap benchmark shows, quite simply, a trend a lower-highs and lower-lows; declining trendline resistance has provided a cap for the past three weeks.  We are now in search of signs of selling exhaustion given that the path is clearly leaning from the upper left to the lower right.  The market is in need of a catalyst, either to break through resistance overhead or send the market lower outside of the trading range that has dominated through the summer months.

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Despite the uncertainty amidst the apparent binary event with respect to trade, investors are not buying gold, typically the go-to volatility hedge.  The price of gold fell by over eight-tenths of a percent on Monday, according to the SPDR Gold Shares ETF (GLD).  The precious metal is typically weak in the month of October, peaking following its summer rally that spans the third quarter.  The short-term trend for the metal is that of lower-lows and lower-highs as the market shows buying exhaustion following the breakout move realized back in June.  A consolidation of gains back to levels around the breakout point around $130 would provide investors another appealing risk-reward point to enter the trade, which has broken above a long-term basing pattern.  Seasonally, the next period of seasonal strength clicks in around the middle of December, on average, running through the first couple of months of the new year.

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http://charts.equityclock.com/seasonal_charts/futures/FUTURE_GC1_RelativeToSPX.PNG

On the economic front, vehicle sales for September were released around the end of last week.  The seasonally adjusted print indicates that vehicle sales ticked higher to an annualized rate of 17.689 million, up from the 17.541 million reported previously. Analysts were expecting no change month-over-month. Stripping out the seasonal adjustments, total vehicle sales actually fell by 22.3% last month, which is approximately double the average percent decline for this time of year of 11.7%. At 1.312 million units sold, this is the lowest level since February, a period known for slower activity amidst unfavourable winter weather. The result places the year-to-date change 13.7% below the seasonal average trend, which is the weakest pace since 2008.  We sent out further analysis to subscribers intraday.  Signup now to be included on our distributions.

http://charts.equityclock.com/seasonal_charts/economic_data/TOTALNSA_seasonal_chart.PNG

Sentiment on Monday, as gauged by the put-call ratio, ended bearish at 1.08.

 

 

 

Seasonal charts of companies reporting earnings today:

Domino's Pizza Inc Seasonal Chart Helen of Troy Limited Seasonal Chart AZZ Inc. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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