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Stock Market Outlook for December 12, 2019


Gold Miners ETF breaking above a flag consolidation pattern, entering its next phase of higher-highs and higher-lows.

 

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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Gildan Activewear, Inc. (NYSE:GIL) Seasonal Chart

Gildan Activewear, Inc. (NYSE:GIL) Seasonal Chart

RadNet, Inc. (NASD:RDNT) Seasonal Chart

RadNet, Inc. (NASD:RDNT) Seasonal Chart

Suburban Propane Partners LP (NYSE:SPH) Seasonal Chart

Suburban Propane Partners LP (NYSE:SPH) Seasonal Chart

Western Copper Corp. (TSE:WRN.TO) Seasonal Chart

Western Copper Corp. (TSE:WRN.TO) Seasonal Chart

Artis Real Estate Investment Trust (TSE:AX/UN.TO) Seasonal Chart

Artis Real Estate Investment Trust (TSE:AX/UN.TO) Seasonal Chart

Strongco Corp. (TSE:SQP.TO) Seasonal Chart

Strongco Corp. (TSE:SQP.TO) Seasonal Chart

Canacol Energy Ltd. (TSE:CNE.TO) Seasonal Chart

Canacol Energy Ltd. (TSE:CNE.TO) Seasonal Chart

iShares S&P/TSX 60 Index Fund  (TSE:XIU.TO) Seasonal Chart

iShares S&P/TSX 60 Index Fund (TSE:XIU.TO) Seasonal Chart

PLDT Inc. (NYSE:PHI) Seasonal Chart

PLDT Inc. (NYSE:PHI) Seasonal Chart

Reliance Steel & Aluminum (NYSE:RS) Seasonal Chart

Reliance Steel & Aluminum (NYSE:RS) Seasonal Chart

Treasury Metals Inc. (TSE:TML.TO) Seasonal Chart

Treasury Metals Inc. (TSE:TML.TO) Seasonal Chart

CRH, PLC (NYSE:CRH) Seasonal Chart

CRH, PLC (NYSE:CRH) Seasonal Chart

goeasy Ltd. (TSE:GSY.TO) Seasonal Chart

goeasy Ltd. (TSE:GSY.TO) Seasonal Chart

 

 

The Markets

Stocks drifted higher on Wednesday as investors reacted positively to the latest announcement from the FOMC.  The committee indicated that it will likely not raise rates in the next year, alleviating concerns that the central bank would retrench on recent policy accommodations.  The S&P 500 Index added just less than three-tenths of one percent, continuing to hug its rising 20-day moving average.  Despite a rise in bond prices on the day, the session was notably risk-on as industrial, material, and technology stocks topped the leaderboard.  REITs ended firmly in the red, even with the decline in yields.  The S&P/TSX Capped REIT Index ETF (XRE) fell by 2.73%, realizing the largest one-day decline since August 24th of 2015.  The ETF had been a steady performer in 2019, up around 26% as of Tuesday’s close.  The ETF is now below intermediate support presented by its 50-day moving average.  Momentum indicators have rolled over, triggering sell signals in the process.  Seasonally, the underperformance of the sector in the fourth quarter typically leads to appealing buying opportunities in the space in the month of December.  Wednesday’s downturn certainly appears threatening, presenting risks, at least for the short-term, that the typically upbeat seasonal pattern may not materialize as investors book profits in their winners and buy into some depressed/under-allocated areas of the market.

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http://charts.equityclock.com/seasonal_charts/indexes/$SPTRE_RelativeToSPX.PNG

The areas that performed best on Wednesday were those areas that are particularly sensitive to the US Dollar, such as materials.  The US Dollar Index fell by just over a third of one percent following the FOMC announcement, sending the currency benchmark below rising trend channel support that was highlighted in our last report.  Mining stocks flourished as metal prices moved higher.  GDX, the gold mining ETF, added over 2%, bouncing from a convergence of support around 20 and 50-day moving averages.  The ETF appears to be breaking out of a flag consolidation pattern, suggesting that the next leg higher is underway.  Metals (gold, silver, copper, etc.) tend to gain between the middle of December and the end of February, influencing the stocks of the producers at the same time.  The decline in the US Dollar and the outperformance of the stocks relative to the commodities suggests that the trade this year could be a good one.

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http://charts.equityclock.com/seasonal_charts/indexes/$HUI_RelativeToSPX.PNG

On the economic front, the Consumer Price Index (CPI) was released before Wednesday’s opening bell.  The headline print of November’s report showed an increase of 0.3%, elevating the year-over-year increase to 2.1%, marginally stronger than the 2.0% increase that was forecast by analysts. Less food and energy, the inflation gauge ticked higher by two-tenths of a percent, which kept the year-over-year change unchanged at 2.3%. Stripping out the seasonal adjustments, the consumer price index for all urban consumers declined by 0.1% in November, which is stronger than the 0.2% decline that is average for this time of year. The year-to-date change now sits higher by 2.4%.  We sent out further insight to subscribers intraday.  Subscribe now to be included on all of our distributions.

Consumer Price Index for All Urban Consumers: All Items Seasonal Chart

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.98.

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Seasonal charts of companies reporting earnings today:

Oracle Corporation Seasonal Chart Adobe Inc. Seasonal Chart Costco Wholesale Corporation Seasonal Chart Broadcom Inc. Seasonal Chart Ciena Corporation Seasonal Chart Panhandle Royalty Company Seasonal Chart Veru Inc. Seasonal Chart Good Times Restaurants Inc. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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