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Stock Market Outlook for October 16, 2019


Gold miners ETF breaking below the neckline of a head-and-shoulders topping pattern as defensive bets unwind.

 

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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Spirit Airlines, Inc. (NYSE:SAVE) Seasonal Chart

Spirit Airlines, Inc. (NYSE:SAVE) Seasonal Chart

Northern Dynasty Minerals Ltd. (TSE:NDM.TO) Seasonal Chart

Northern Dynasty Minerals Ltd. (TSE:NDM.TO) Seasonal Chart

Audiovox Corp. (NASD:VOXX) Seasonal Chart

Audiovox Corp. (NASD:VOXX) Seasonal Chart

Home Capital Group, Inc. (TSE:HCG.TO) Seasonal Chart

Home Capital Group, Inc. (TSE:HCG.TO) Seasonal Chart

Dorel Industries Inc. - Class B (TSE:DII/B.TO) Seasonal Chart

Dorel Industries Inc. – Class B (TSE:DII/B.TO) Seasonal Chart

 

 

The Markets

Stocks closed firmly higher on Tuesday following a solid start to earnings season with better than expected reports from JP Morgan, United Health and Johnson & Johnson.  Financial and health care stocks topped the leaderboard as a result.  The S&P 500 Index gained 1.00%, testing the psychologically important 3,000 level at the highs of the session.  Gradually, the large-cap benchmark is making its way back to the highs of the year, supported by its 200-day moving average, which has been pointing higher over the past month and a half.  While the risk of a double-top observed at the end of last month threatened a downside move, the simple fact is that the previous intermediate low at 2825  has not been violated, mitigating a negative intermediate path, characterized by lower-lows and lower-highs.  Next hurdle is the previous peak at 3021.99, which, if broken, would break the benchmark out of this consolidation range from the past few months.

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Encouraging of the prospect of a breakout above the trading range on the S&P 500 Index is the continued adoption of risk-on plays as defensive bets are unwound.  Consumer staples and utilities, two of this summer’s hot sector plays, closed lower on the day, while technology, financials, and communications services produced gains in excess of one percent.  The price of gold took a leg lower, resulting in a multi-month low in the gold miners ETF (GDX).  And treasury bond funds continued their push lower, still suggesting a lower-high below the August peak and concluding a trend of higher-highs and higher-lows.  The crowded defensive bets have plenty of fuel to power the next leg higher in stocks, assuming investors adopt a bullish bias.  Earnings reports ahead will be key.

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Sentiment on Tuesday, as gauged by the put-call ratio, ended bearish at 1.01.

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Seasonal charts of companies reporting earnings today:

Bank of America Corporation Seasonal Chart Abbott Laboratories Seasonal Chart International Business Machines Corporation Seasonal Chart Netflix, Inc. Seasonal Chart ASML Holding N.V. Seasonal Chart U.S. Bancorp Seasonal Chart PNC Financial Services Group, Inc. (The) Seasonal Chart Crown Castle International Corporation Seasonal Chart CSX Corporation Seasonal Chart Kinder Morgan, Inc. Seasonal Chart Progressive Corporation (The) Seasonal Chart Bank Of New York Mellon Corporation (The) Seasonal Chart Ally Financial Inc. Seasonal Chart Comerica Incorporated Seasonal Chart United Rentals, Inc. Seasonal Chart Crown Holdings, Inc. Seasonal Chart SL Green Realty Corp Seasonal Chart Commerce Bancshares, Inc. Seasonal Chart Steel Dynamics, Inc. Seasonal Chart First Horizon National Corporation Seasonal Chart RLI Corp. Seasonal Chart Wintrust Financial Corporation Seasonal Chart Alcoa Corporation Seasonal Chart Umpqua Holdings Corporation Seasonal Chart Cathay General Bancorp Seasonal Chart Texas Capital Bancshares, Inc. Seasonal Chart Cohen & Steers Inc Seasonal Chart Eagle Bancorp, Inc. Seasonal Chart Triumph Bancorp, Inc. Seasonal Chart Great Southern Bancorp, Inc. Seasonal Chart Preferred Bank Seasonal Chart TriState Capital Holdings, Inc. Seasonal Chart Heritage-Crystal Clean, Inc. Seasonal Chart Limelight Networks, Inc. Seasonal Chart Consolidated-Tomoka Land Co. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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