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Stock Market Outlook for November 22, 2019


S&P 500 Index: MACD crossed below its signal line on Thursday.  Previous instances this year have seen a pullback of 2% to 7%.

 

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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Velan, Inc. (TSE:VLN.TO) Seasonal Chart

Velan, Inc. (TSE:VLN.TO) Seasonal Chart

Douglas Emmett Inc. (NYSE:DEI) Seasonal Chart

Douglas Emmett Inc. (NYSE:DEI) Seasonal Chart

Cemex SA (NYSE:CX) Seasonal Chart

Cemex SA (NYSE:CX) Seasonal Chart

American Superconductor Corp. (NASD:AMSC) Seasonal Chart

American Superconductor Corp. (NASD:AMSC) Seasonal Chart

Cliffs Natural Resources Inc. (NYSE:CLF) Seasonal Chart

Cliffs Natural Resources Inc. (NYSE:CLF) Seasonal Chart

Esperion Therapeutics, Inc. (NASD:ESPR) Seasonal Chart

Esperion Therapeutics, Inc. (NASD:ESPR) Seasonal Chart

Arrow Electronics Inc. (NYSE:ARW) Seasonal Chart

Arrow Electronics Inc. (NYSE:ARW) Seasonal Chart

Cognizant Technology Solutions Corp. (NASD:CTSH) Seasonal Chart

Cognizant Technology Solutions Corp. (NASD:CTSH) Seasonal Chart

Oracle Corp. (NYSE:ORCL) Seasonal Chart

Oracle Corp. (NYSE:ORCL) Seasonal Chart

First Solar Inc. (NASD:FSLR) Seasonal Chart

First Solar Inc. (NASD:FSLR) Seasonal Chart

Fomento Econmico Mexicano SAB (NYSE:FMX) Seasonal Chart

Fomento Econmico Mexicano SAB (NYSE:FMX) Seasonal Chart

Bausch Health Cos. Inc. (NYSE:BHC) Seasonal Chart

Bausch Health Cos. Inc. (NYSE:BHC) Seasonal Chart

Frequency Electronics, Inc. (NASD:FEIM) Seasonal Chart

Frequency Electronics, Inc. (NASD:FEIM) Seasonal Chart

Veeco Instruments, Inc. (NASD:VECO) Seasonal Chart

Veeco Instruments, Inc. (NASD:VECO) Seasonal Chart

Sealed Air Corp New (NYSE:SEE) Seasonal Chart

Sealed Air Corp New (NYSE:SEE) Seasonal Chart

Regency Realty Corp. (NASD:REG) Seasonal Chart

Regency Realty Corp. (NASD:REG) Seasonal Chart

Host Hotels & Resorts Inc. (NYSE:HST) Seasonal Chart

Host Hotels & Resorts Inc. (NYSE:HST) Seasonal Chart

Credit Suisse Group (NYSE:CS) Seasonal Chart

Credit Suisse Group (NYSE:CS) Seasonal Chart

Maui Land & Pineapple Co., Inc. (NYSE:MLP) Seasonal Chart

Maui Land & Pineapple Co., Inc. (NYSE:MLP) Seasonal Chart

 

 

The Markets

Stocks traded slightly lower on Thursday as investors digest the gains  from the past few weeks while monitoring the headlines of the day.  The S&P 500 Index was lower by less than two-tenths of one percent, falling back towards previous psychological resistance at 3100.  Following many indications of waning buying pressures over recent days, MACD finally crossed below its signal line, providing a sell signal in the process.  This is the fifth significant daily bearish MACD crossover this year, each one, so far, resulting in a drawdown of between 2% to 7% in the weeks that followed.  RSI crossed below 70 in the prior session and the full stochastic oscillator crossed below 80 on Thursday, providing another sell signal.  Signs of a short-term peak are being presented.  Downside risk is currently thought to be around previous horizontal resistance at 3025, but it is typically best not to target within technical analysis and rather just obey the trends.  The longer-term trend is clearly that of higher-highs and higher-lows, by the shorter-term trend looks to be lower, given the weight of the evidence in front of us.

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On the economic front, a report on existing home sales was released during Thursday’s session.  The headline print of October’s report indicated that activity increased by 1.9% last month to a seasonally adjusted annualized rate of 5.46 million. Analysts were expecting a rate of 5.48 million. The year-over-year change ticked higher from 3.5% to 4.6%. Stripping out the seasonal adjustments, existing home sales actually increased by 2.9% in October, which is a positive divergence compared to the 0.9% decline that is average for the month. The year-to-date trend is now hovering 15.0% above average, which is the best pace in the past decade.  We sent out further insight to subscribers intraday.  Signup now to receive our report on this important gauge of housing activity in the US.

Existing Home Sales Seasonal Chart

Also on the economic front, the latest read of jobless claims was provided before Thursday’s opening bell.  This coincident indicator of employment activity provides a prudent read of the health of the labor market.  The headline print was that initial claims were unchanged last week at 227,000, which is higher than the 217,000 that was forecasted by analysts.  The change in initial claims had been trending below average through the middle of the year, but recently the trend started to progress above the seasonal norm, indicating that there have been more layoffs than average for this time of year.  The shift is not enough to be considered significant, as of yet, particularly when continuing claims are still trending below the seasonal norm, but certainly the path of initial claims warrants attention.  Presently, the results point to weakness in the labor market in November, something that is certainly not desired when the consumer is in the driver’s seat of the economy through the end of the year. 

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Sentiment on Thursday, as gauged by the put-call ratio, ended bearish at 1.21.  This is the highest level since October 3rd when the ratio hit a multi-month high of 1.37, providing an excellent contrarian buy signal for equities ahead of the breakout above summer trading ranges.  Thursday’s bearish print mitigates recent reads of complacency, which suggested that stocks were vulnerable to a shock event. 

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Sectors and Industries entering their period of seasonal strength:

Banks Industry Seasonal Chart
S5BANKX Index Relative to the S&P 500S5BANKX Index Relative to the Sector

S5BANKX Index Monthly Averages

 

 

Seasonal charts of companies reporting earnings today:

J.M. Smucker Company (The) Seasonal Chart Foot Locker, Inc. Seasonal Chart Buckle, Inc. (The) Seasonal Chart Hibbett Sports, Inc. Seasonal Chart IEC Electronics Corp. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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