Contact | RSS Feed

Stock Market Outlook for December 18, 2019


Consumer Discretionary ETF moving above an ascending triangle pattern, typically a continuation setup.

 

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:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

Boralex, Inc. (TSE:BLX.TO) Seasonal Chart

Boralex, Inc. (TSE:BLX.TO) Seasonal Chart

Heska Corp. (NASD:HSKA) Seasonal Chart

Heska Corp. (NASD:HSKA) Seasonal Chart

Central Garden & Pet Co. (NASD:CENT) Seasonal Chart

Central Garden & Pet Co. (NASD:CENT) Seasonal Chart

BBX Capital Corp. (NYSE:BBX) Seasonal Chart

BBX Capital Corp. (NYSE:BBX) Seasonal Chart

CVS Health Corp. (NYSE:CVS) Seasonal Chart

CVS Health Corp. (NYSE:CVS) Seasonal Chart

Companhia Energetica de Minas Gerais (Cemig) (NYSE:CIG) Seasonal Chart

Companhia Energetica de Minas Gerais (Cemig) (NYSE:CIG) Seasonal Chart

US Concrete, Inc. (NASD:USCR) Seasonal Chart

US Concrete, Inc. (NASD:USCR) Seasonal Chart

Western Copper Corp. (AMEX:WRN) Seasonal Chart

Western Copper Corp. (AMEX:WRN) Seasonal Chart

Zargon Oil & Gas Ltd. (TSE:ZAR.TO) Seasonal Chart

Zargon Oil & Gas Ltd. (TSE:ZAR.TO) Seasonal Chart

Hess Corp. (NYSE:HES) Seasonal Chart

Hess Corp. (NYSE:HES) Seasonal Chart

Transocean, Inc. (NYSE:RIG) Seasonal Chart

Transocean, Inc. (NYSE:RIG) Seasonal Chart

PFB Corp.  (TSE:PFB.TO) Seasonal Chart

PFB Corp. (TSE:PFB.TO) Seasonal Chart

Aura Minerals Inc. (TSE:ORA.TO) Seasonal Chart

Aura Minerals Inc. (TSE:ORA.TO) Seasonal Chart

Valeura Energy Inc. (TSE:VLE.TO) Seasonal Chart

Valeura Energy Inc. (TSE:VLE.TO) Seasonal Chart

Photon Control Inc. (TSE:PHO.TO) Seasonal Chart

Photon Control Inc. (TSE:PHO.TO) Seasonal Chart

InterRent Real Estate Investment Trust (TSE:IIP/UN.TO) Seasonal Chart

InterRent Real Estate Investment Trust (TSE:IIP/UN.TO) Seasonal Chart

Magellan Aerospace Corp. (TSE:MAL.TO) Seasonal Chart

Magellan Aerospace Corp. (TSE:MAL.TO) Seasonal Chart

George Weston Ltd. (TSE:WN.TO) Seasonal Chart

George Weston Ltd. (TSE:WN.TO) Seasonal Chart

Powell Industries, Inc. (NASD:POWL) Seasonal Chart

Powell Industries, Inc. (NASD:POWL) Seasonal Chart

Suncor Energy, Inc. (NYSE:SU) Seasonal Chart

Suncor Energy, Inc. (NYSE:SU) Seasonal Chart

 

 

The Markets

Stocks closed with fractional gains on Tuesday as investors continue to reallocate portfolios now that a number of uncertainties are behind us.  The S&P 500 Index closed higher by a mere three basis points, ending at another record high.  The benchmark is back into overbought territory, according to a number of metrics, but signs of peaking have yet to become apparent.  Seasonally, the back half of December is typically stronger than the first half, which, if proven to be the case this year, could see the market benchmark climb another 2% to 3% by the start of the new year.  The performance of the equity market this year is one for the books, but next year could be a different story should certain elements of the economy fail to turn around.  We lay it all out in our intraday and monthly reports.  Not signed up yet?  What are you waiting for?  Monthly and yearly subscription options are available – now the number one wished for holiday gift by investment portfolios around the globe.

image

Topping the leaderboard on Tuesday were shares of consumer discretionary companies as stocks that have largely sat out of the recent broad market advance start to break out.  The Consumer Discretionary ETF (XLY) edged above resistance at $124, charting a new record high for the first time since July.  The move represents a positive resolution to an ascending triangle pattern, typically a continuation setup that projects an upside target towards $134.  Momentum indicators are curling higher, moving further into bullish territory as buying demand returns to the market segment.  Seasonally, the sector remains in a period of seasonal strength through to April. 

image

Consumer Discretionary Sector Seasonal Chart

On the economic front, a report on housing starts was released before Tuesday’s opening bell.  The headline print of November’s report indicated that activity increased by 3.2% last month to a seasonally adjusted annualized rate of 1.365 million. Analysts were expecting an increase of 1.3% to a rate of 1.34 million. Stripping out the adjustments, starts actually declined by 9.0% in November, which is stronger than the 13.1% decline that is average for this time of year. The result places the year-to-date change 23.2% above the seasonal average trend, which remains the best pace since 2012.  We sent out further insight to subscribers intraday.  Signup now and we’ll send it to you.

Housing Starts Seasonal Chart

Also on the economic front, the Fed’s official assessment of the state of the manufacturing economy was released.  The headline print of November’s report indicates that industrial production increased by 1.1% last month, a beat versus expectations for a rise of 0.9%. The manufacturing component was also higher by 1.1%, a beat versus the consensus analyst estimate of +0.7%. Stripping out the seasonal adjustments, industrial production in the US actually increased by 0.5% in November, which is a positive divergence compared to the 0.7% decline that is average for the second to last month of the year. The result still maintains a below average pace on the year, however, the gap is closing. Industrial production is down by 0.9% through the eleven months ending in November, which is well below the 0.9% increase that is average by this point in the year. This is the weakest pace since 2015 and only the second negative year-to-date performance through November in this present economic recovery.  We broke down the results for subscribers in our proprietary seasonal framework.  Subscribe now.

Industrial Production: Total Seasonal Chart

Sentiment on Tuesday, as gauged by the put-call ratio, ended overly bullish at 0.63.  This is the lowest reading since December 13 of 2016, suggestive of an overwhelming bias towards bullish bets in the market.  Low put-call ratios are typically an indication of complacency, which makes stocks vulnerable should a shock event be realized.  As we have stated in the past, complacency in itself is not necessarily indication to sell, but it does skew the risk-reward of the market in an asymmetric manner, making it difficult to commit new capital under such a backdrop.

image

 

 

 

Seasonal charts of companies reporting earnings today:

Micron Technology, Inc. Seasonal Chart General Mills, Inc. Seasonal Chart Paychex, Inc. Seasonal Chart Toro Company (The) Seasonal Chart Herman Miller, Inc. Seasonal Chart ABM Industries Incorporated Seasonal Chart RF Industries, Ltd. Seasonal Chart

 

 

S&P 500 Index

image

image

 

 

TSE Composite

image

image

 

Sponsored By...
Seasonal Advantage Portfolio by CastleMoore

Comments are closed.