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Stock Market Outlook for December 3, 2019


S&P 500 Index has broken below its short-term rising trend channel and daily momentum indicators have triggered renewed sell signals.

 

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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Canfor Pulp Products Inc. (TSE:CFX.TO) Seasonal Chart

Canfor Pulp Products Inc. (TSE:CFX.TO) Seasonal Chart

Spectral Medical, Inc. (TSE:EDT.TO) Seasonal Chart

Spectral Medical, Inc. (TSE:EDT.TO) Seasonal Chart

Keg Royalties Income Fund (TSE:KEG/UN.TO) Seasonal Chart

Keg Royalties Income Fund (TSE:KEG/UN.TO) Seasonal Chart

Aecon Group Inc. (TSE:ARE.TO) Seasonal Chart

Aecon Group Inc. (TSE:ARE.TO) Seasonal Chart

Excelsior Mining Corp. (TSE:MIN.TO) Seasonal Chart

Excelsior Mining Corp. (TSE:MIN.TO) Seasonal Chart

 

Upcoming BNN Appearance:

I will be on BNN’s Market Call Tonight at 6:00pm ET on Wednesday, December 4th taking your calls on Technical Analysis and Seasonal Investing.  CALL TOLL-FREE 1-855-326-6266,  EMAIL marketcall@bnnbloomberg.ca,  or TWEET @MarketCall.

 

The Markets

Stocks sold off on Monday following the release of weak manufacturing data in the US.  The S&P 500 Index fell by just less than nine-tenths of one percent, pulling back to levels around the rising 20-day moving average.  A second set of momentum sell signals have been triggered following our initial observation prior to the Thanksgiving holiday trade.  Stochastics and the Relative Strength Index (RSI) fell out of overbought territory; MACD crossed below its signal line, showing a short-term negative divergence versus price in the process.  The technical framework is in place for a pullback in the broader equity market as investors shuffle the deck following healthy gains in recent weeks that allowed the market to break free of its summer trading range.  Logical target on a retracement attempt is to previous horizontal resistance at 3025, also close to the rising 50-day moving average at 3030.  Subscribers received in-depth information pertaining to the tendencies for December and how to take advantage in our monthly report.  Subscribe now and we’ll send you our 71-page report.

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Diving deeper, the decline on the large-cap benchmark on Monday violates the lower limit of a rising trend channel that had supported the market benchmark for at least the past month.  The benchmark moved below its 50-hour moving average, a level that the benchmark knocked its head on in the middle of the session.  Momentum indicators on this short-term look have moved into bearish territory.  A number of wildcards are likely to add uncertainty over the next few weeks.  The next tariff deadline of December 15th is at the forefront of the minds of investors.  The UK general election will be on December 12, an unknown variable in the Brexit process.  And rounding off these major events are further economic reports, such as non-farm payrolls, likely to keep investors on their toes.

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The uncertainties over the next couple of weeks was sufficient to elevate the volatility index on Monday.  The index has spiked from a low below 12 last week to almost 15 on as of Monday’s close.  Followers of our work will be aware of the simple sell signal that we’ve presented in the past pertaining to such an event.  When the VIX bottoms below 12 and subsequently rebounds above it, the equity market has typically declined as market complacency is worn off.  Pervious instances this year were observed in the middle of April and the end of July, each prior to a market pullback of around 5% from peak to trough.

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On the economic front, a report on US construction spending was released  during Monday’s session.  The headline print of October’s report indicates that activity declined by 0.8%, which was much weaker than the consensus estimate that called for a 0.4% rise. The year-over-year change now sits at +1.1%. Stripping out the seasonal adjustments, construction spending in the US actually declined by 2.1% in October, which is weaker than the 1.1% decline that is average for this time of year. The year-to-date change is higher by 21.1%, which is weaker than the 23.7% increase that is average with just two months left in the year to report.  We sent our further insight to subscribers intraday.  Didn’t receive our distribution?  Signup now and we’ll send you our report that provides valuable input to our three-pronged approach to seasonal investing.

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

Sentiment on Monday, as gauged by the put-call ratio, ended neutral at 0.99.

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Seasonal charts of companies reporting earnings today:

Salesforce.com Inc Seasonal Chart Bank Of Montreal Seasonal Chart Workday, Inc. Seasonal Chart Marvell Technology Group Ltd. Seasonal Chart Donaldson Company, Inc. Seasonal Chart HealthEquity, Inc. Seasonal Chart AeroVironment, Inc. Seasonal Chart Lands' End, Inc. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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