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Stock Market Outlook for October 10, 2019


Price of oil hugging the lower limit of its multi-month trading range, but the fundamentals may not be negative enough to see a break below the range, despite negative seasonal tendencies through the fourth quarter.

 

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:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

Consumer Portfolio Services, Inc. (NASD:CPSS) Seasonal Chart

Consumer Portfolio Services, Inc. (NASD:CPSS) Seasonal Chart

Rocky Brands Inc. (NASD:RCKY) Seasonal Chart

Rocky Brands Inc. (NASD:RCKY) Seasonal Chart

Home Depot, Inc. (NYSE:HD) Seasonal Chart

Home Depot, Inc. (NYSE:HD) Seasonal Chart

Xilinx, Inc. (NASD:XLNX) Seasonal Chart

Xilinx, Inc. (NASD:XLNX) Seasonal Chart

Morgan Stanley (NYSE:MS) Seasonal Chart

Morgan Stanley (NYSE:MS) Seasonal Chart

Chemed Corp. (NYSE:CHE) Seasonal Chart

Chemed Corp. (NYSE:CHE) Seasonal Chart

Lattice Semiconductor Corp. (NASD:LSCC) Seasonal Chart

Lattice Semiconductor Corp. (NASD:LSCC) Seasonal Chart

Investors Title Co. (NASD:ITIC) Seasonal Chart

Investors Title Co. (NASD:ITIC) Seasonal Chart

Sinclair Broadcast Group, Inc. (NASD:SBGI) Seasonal Chart

Sinclair Broadcast Group, Inc. (NASD:SBGI) Seasonal Chart

ASML Holding NV (NASD:ASML) Seasonal Chart

ASML Holding NV (NASD:ASML) Seasonal Chart

China Distance Education Holdings Ltd. (NYSE:DL) Seasonal Chart

China Distance Education Holdings Ltd. (NYSE:DL) Seasonal Chart

Heico Corp. (NYSE:HEI) Seasonal Chart

Heico Corp. (NYSE:HEI) Seasonal Chart

International Paper Co. (NYSE:IP) Seasonal Chart

International Paper Co. (NYSE:IP) Seasonal Chart

 

 

The Markets

Stocks continued to “yo-yo” ahead of the trade talks between the US and China, recouping much of the loss recorded in the prior session.  The S&P 500 Index added just over nine-tenths of one percent on Wednesday, testing the gap that was opened during Tuesday’s session.  A move above 2960 is required to break the short-term trend of lower-lows and lower-highs.  Technology stocks topped the leaderboard as investors place their bets on some kind of resolution to the trade woes in the days ahead.  Seasonally, the technology sector enters its period of seasonal strength on October 9th, on average, as investors purchase sector constituents ahead of the prime consumer and business spending period through the remainder of the fourth quarter.

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On schedule for the Wednesday’s session, the petroleum status report for the week just past was released.  The EIA indicated that oil inventories increased by 2.9 million barrels, while gasoline stockpiles declined by 1.2 million barrels.  The result saw the days of supply of oil expand almost by a full day to 26.2, while gasoline days of supply expanded by a tenth of a day to 24.8.  The average for each at this time of year is 21.9 and 23.9, respectively.  Subscribers can login and view the seasonal charts showing the change in petroleum inventories via the following link: https://charts.equityclock.com/u-s-eia-weekly-petroleum-status-report

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

The excess level of supply of oil has kept the price of the commodity down throughout the third quarter, typically a high demand period attributed to summer driving.  The price of West Texas Intermediate has found support at $50, marking the lower limit to a range that topped out around the low $60’s.  A move into the $40’s, as we saw in December of last year, would suggest negative implications for the economy overall.  With the strength in the consumer, the economy is not at that stage yet that would warrant a price of the energy commodity below $50, yet, despite the fact that seasonal tendencies for price are negative through the fourth quarter. Last week, we sent subscribers a way to maintain exposure to the energy sector through the seasonally weaker time of year.  The link to the report is available in the report archive on the chart database home page, once logged in: https://charts.equityclock.com/

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On the economic front, the Job Openings and Labor Turnover Survey was released during Wednesday’s session.  The headline print of August’s report indicated that openings declined by 1.7% in the month to 7.051 million. Analysts were expecting an increase of 0.2% to 7.186 million. There were 6.044 million individuals that were declared unemployed in August, according to the Bureau of Labor Statistics, suggesting that at least one opportunity was available for everyone seeking a job. Stripping out the seasonal adjustments, openings actually declined by 5.5% to 7.034 million, which is weaker than the 3.9% decline that is average for August. The year-to-date change is now barely higher on the year, up by 1.6%, far less than the 16-year average increase through the end of August of 22.7%.  We sent out further insight to subscribers intraday.  Be sure to subscribe to be included on this analysis when it is released.

Job Openings: Total Nonfarm Seasonal Chart

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

 

 

Sectors and Industries entering their period of seasonal strength:

Technology Sector Seasonal Chart

TECHNOLOGY Relative to the S&P 500
TECHNOLOGY Relative to the S&P 500

TECHNOLOGY Monthly Averages

 

 

Seasonal charts of companies reporting earnings today:

Delta Air Lines, Inc. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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