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Stock Market Outlook for January 9, 2020


Gold and Oil prices reverse strong overnight gains, however, positive intermediate uptrends remain intact.

 

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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Toromont Industries Ltd. (TSE:TIH.TO) Seasonal Chart

Toromont Industries Ltd. (TSE:TIH.TO) Seasonal Chart

Vanguard Small-Cap Growth ETF (NYSE:VBK) Seasonal Chart

Vanguard Small-Cap Growth ETF (NYSE:VBK) Seasonal Chart

Jack In The Box, Inc. (NASD:JACK) Seasonal Chart

Jack In The Box, Inc. (NASD:JACK) Seasonal Chart

Gap, Inc. (NYSE:GPS) Seasonal Chart

Gap, Inc. (NYSE:GPS) Seasonal Chart

Westlake Chemical Corp. (NYSE:WLK) Seasonal Chart

Westlake Chemical Corp. (NYSE:WLK) Seasonal Chart

Helios Technologies, Inc. (NASD:HLIO) Seasonal Chart

Helios Technologies, Inc. (NASD:HLIO) Seasonal Chart

La Z Boy, Inc. (NYSE:LZB) Seasonal Chart

La Z Boy, Inc. (NYSE:LZB) Seasonal Chart

Chipotle Mexican Grill Inc. (NYSE:CMG) Seasonal Chart

Chipotle Mexican Grill Inc. (NYSE:CMG) Seasonal Chart

Cinemark Holdings Corp. (NYSE:CNK) Seasonal Chart

Cinemark Holdings Corp. (NYSE:CNK) Seasonal Chart

Kohls Corp. (NYSE:KSS) Seasonal Chart

Kohls Corp. (NYSE:KSS) Seasonal Chart

 

 

The Markets

Stocks posted gains on Wednesday as investors shook off sharp overnight losses attributed to the Iranian missile strikes of Iraqi military bases that housed US troops.  S&P 500 Index futures were down by around 1.6% at the lows of the overnight session, but, as a sense of calm emerged between the US and Iran, stock futures eliminated their losses and market participants kept up the buying pressures into Wednesday’s session.  The S&P 500 Index added just less than half of one percent, well off of the high of the session, but nowhere near where future markets expected the benchmark to open at the height of the overnight panic.  The benchmark charted a new all-time intraday high at 3267, however, the previous all-time closing high of 3257.85 charted in the first session of the year remains intact.  The large-cap benchmark triggered momentum sell signals on Tuesday amidst the flaring geopolitical turmoil as investors question the lofty valuations of US indices given the rising uncertainties.  Major moving averages remain in a position of support, providing logical levels to pick up equity exposure should prices pullback.

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Among the more notable reversals over the past 24 hours were apparent in the price of gold and oil, both of which traded firmly lower following significant gains realize in the overnight session.  The price of Gold topped $1600 at the peak of the panic, charting the highest level in about seven years.  The price of oil topped $65, moving toward the highs of the past year.  Despite the long-wick candlestick on the charts of each, indicative of an intermediate peak, the trends for both, as gauged by major moving averages, continue to point higher.  The 50-day moving average for West Texas Intermediate (WTI) hovers around $58, a logical level for buyers to gain exposure to the positive intermediate path, while the equivalent level for the price of gold is around $1480.  Both had become significantly overbought in recent sessions, vulnerable to a retracement should tensions de-escalate.  Seasonally, the price of oil tends to gain between the middle of February and the beginning of May, while gold sees positive seasonal tendencies between the middle of December and the end of February.

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Gold Futures (GC) Seasonal Chart

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Crude Oil Futures (CL) Seasonal Chart

Not helping the price of the energy commodity during Wednesday’s session was the weekly US inventory report released from the Energy Information Administration (EIA).  The EIA indicated that inventories of oil expanded by 1.2 million barrels, while gasoline and distillates expanded by 9.1 million barrels and 5.3 million barrels, respectively.  The result left the days of supply of oil unchanged at 25.5, while the days of supply of gasoline expanded by well over a full day to 28.1.  The average level for each at this time of year is 21.9 and 24.8, respectively.  There is often a lot of gyrations around stockpiles of energy commodities at the end of the year as activity is impacted by the holidays, therefore, we’ll refrain from providing further comment until at least the middle of the month, once the data settles.

Weekly U.S. Days of Supply of Crude Oil excluding SPR  (Number of Days) Seasonal Chart

Also released on Wednesday was December’s payroll tally from ADP, which sets the stage for the official report that will be released on Friday.  ADP indicates that 202,000 payrolls were added last month, beating the 157,000 increase that was forecasted by analysts.  Analysts have now pegged Friday’s report to reveal 158,000 additional payrolls, which is down from the 266,000 reported for November.  Prior to the seasonal adjustments, December tends to be a soft month for payrolls, falling by 0.2%, on average, over the past 20 years.  This suggests an actual decline of 307,000 in the month.  In the year prior, the December decline was 172,000.  We’ll have the breakdown of the results, from a seasonal perspective, available in our intraday report that will be sent to subscribers on Friday.

Total Nonfarm Seasonal Chart

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.76.

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Seasonal charts of companies reporting earnings today:

Synnex Corporation Seasonal Chart Acuity Brands, Inc. Seasonal Chart KB Home Seasonal Chart WD-40 Company Seasonal Chart AZZ Inc. Seasonal Chart Lindsay Corporation Seasonal Chart Simulations Plus, Inc. Seasonal Chart Franklin Covey Company Seasonal Chart Saratoga Investment Corp Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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