Stock Market Outlook for December 11, 2019
CRB Commodity Index moving above trendline resistance as the US Dollar rolls over, seasonally typical for the last month of the year.
*** 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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Hudson Technologies, Inc. (NASD:HDSN) Seasonal Chart
Guardian Capital Group Ltd. (TSE:GCG/A.TO) Seasonal Chart
Canarc Resource Corp. (TSE:CCM.TO) Seasonal Chart
Toronto-Dominion Bank (TSE:TD.TO) Seasonal Chart
Granite Real Estate Investment Trust (TSE:GRT/UN.TO) Seasonal Chart
Knoll Inc. (NYSE:KNL) Seasonal Chart
Mullen Group Ltd. (TSE:MTL.TO) Seasonal Chart
IBI Group Inc. (TSE:IBG.TO) Seasonal Chart
FLYHT Aerospace Solutions Ltd. (TSXV:FLY.V) Seasonal Chart
Nighthawk Gold Corp. (TSE:NHK.TO) Seasonal Chart
Theratechnologies, Inc. (TSE:TH.TO) Seasonal Chart
Cooper-Standard Holdings Inc. (NYSE:CPS) Seasonal Chart
Avino Silver & Gold Mines Ltd. (TSE:ASM.TO) Seasonal Chart
Estee Lauder Cos. (NYSE:EL) Seasonal Chart
Noble Energy, Inc. (NYSE:NBL) Seasonal Chart
Universal Stainless & Alloy Products, Inc. (NASD:USAP) Seasonal Chart
Rockwell Medical Technologies, Inc. (NASD:RMTI) Seasonal Chart
Sangamo Therapeutics, Inc. (NASD:SGMO) Seasonal Chart
Wesco Aircraft Holdings Inc. (NYSE:WAIR) Seasonal Chart
The Markets
Stocks slipped for a second day as investors position themselves accordingly for the December 15th tariff deadline. The S&P 500 Index fell by just over a tenth of one percent, remaining supported at the 20-day moving average. We have cited in the past the tendency for the market to cling to major moving averages going into an uncertain event. The fact that investors feel comfortable at the short-term term 20-day moving average as opposed to longer-term hurdles at the 50 or 100 day shows the optimism of investors, suggesting that investors expect this week to be merely a short-term speed-bump on the path to further all-time highs. Any impact to investor optimism as we near the tariff deadline could still see a test of levels below, however.
Encouraging for the continuation of strength in risk assets is the recent roll-over in the US Dollar Index, which has confirmed a lower high below the early October peak. The currency benchmark is back testing long-term support at the 200-day moving average, a level that will be highly scrutinized in the coming days. A definitive break below this level of long-term support would provide a positive catalyst for stocks and commodities. Seasonally, the US Dollar Index tends to decline in the last month of the year giving lift to equity and commodity positions through the Santa Claus rally period in the back half of the month.
Looking at the CRB commodity index, the commodity benchmark has been poking its head above long-term declining trendline resistance for the past few weeks and momentum indicators have positively diverged from price since the year began. The bullish characteristics that momentum indicators are showing suggest a definitive breakout above levels of resistance is increasingly probable. Commodities, in general, tend to outperform stocks between now and the end of February, benefitting from the ramp up in demand going into the prime manufacturing season in the spring.
Sentiment on Tuesday, as gauged by the put-call ratio, ended neutral at 0.98.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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