Stock Market Outlook for November 21, 2019
The Relative Strength Index (RSI) of the S&P 500 Index crossed below 70, by some strategies a signal to sell.
*** 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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Pier 1 Imports, Inc. (NYSE:PIR) Seasonal Chart
Norbord Inc. (TSE:OSB.TO) Seasonal Chart
EnPro Industries, Inc. (NYSE:NPO) Seasonal Chart
KB Financial Group, Inc. (NYSE:KB) Seasonal Chart
Copper Mountain Mining Corp. (TSE:CMMC.TO) Seasonal Chart
Brinker Intl, Inc. (NYSE:EAT) Seasonal Chart
Titan Machinery Inc. (NASD:TITN) Seasonal Chart
iShares Dow Jones US Real Estate (NYSE:IYR) Seasonal Chart
Camtek Ltd. (NASD:CAMT) Seasonal Chart
Simon Property Group, Inc. (NYSE:SPG) Seasonal Chart
The Markets
Stocks were lower on Wednesday as headlines suggested that a Phase 1 trade deal may not be achieved this year. Stocks sold off sharply following the news, adding volatility to was was initially a quiet session. The S&P 500 Index ended the day lower by around four-tenths of one percent, still clinging to levels around the all-time peak. Momentum indicators are turning lower from overbought levels with some triggering sell signals. The daily Relative Strength Index (RSI) is one such indicator. The momentum indicator for the large-cap benchmark moved below 70 during Wednesday’s session, traditionally a sell signal by many theories. In addition, MACD is increasingly converging on its signal line, suggesting a sell signal with respect to this indicator is imminent. Downside risks are towards levels between 20 and 50-day moving averages, including previous horizontal resistance around 3025. We sent out a special report to subscribers on Tuesday detailing the seasonal tendencies for the broad equity market over the next couple of weeks and the prudent course of action during this timeframe. Subscribe now and we’ll send it to you.
On the economic front, a report on consumer prices in Canada was released before the opening bell. The headline and seasonally adjusted print indicated that the Consumer Price Index (CPI) increased by 0.3% in October, which is stronger than the unchanged result that is average for the month. The year-to-date change is now hovering three-tenths of one percent above the seasonal average trend, suggesting a calendar-year pace of 2.2%. If achieved, this would mark the strongest inflation rate since 2011. Subscribers can login and view the seasonal charts for this report via the following link: https://charts.equityclock.com/canada-consumer-price-index-cpi
On Wednesday we released another warning pertaining to the health of the US manufacturing economy. Subscribe now to receive this insight.
Sentiment on Wednesday, as gauged by the put-call ratio, ended neutral at 1.00.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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