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Stock Market Outlook for January 29, 2020


The word of the day is “gap-fill.”

 

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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Diamond Offshore Drilling, Inc. (NYSE:DO) Seasonal Chart

Diamond Offshore Drilling, Inc. (NYSE:DO) Seasonal Chart

Oceaneering Intl, Inc. (NYSE:OII) Seasonal Chart

Oceaneering Intl, Inc. (NYSE:OII) Seasonal Chart

William Lyon Homes Inc. (NYSE:WLH) Seasonal Chart

William Lyon Homes Inc. (NYSE:WLH) Seasonal Chart

 

 

The Markets

Stocks rebounded on Tuesday as investors looked for deals amidst the market rout from the past couple of sessions.  The S&P 500 Index added just over one percent, ending the session at the 20-day moving average by the closing bell.  The gain fills the gap that was opened during the previous day’s session in what looks to be typical market performance following similar gap-down events.  Reaction from here will be closely scrutinized.  A gap lower in prices typically marks a level of support that investors were unable to trade around, therefore, when prices retrace back to that “dead” zone, investors will look to sell into the hurdle.  That level of overhead resistance can be seen around 3290; the benchmark reached a high of around 3285 during Tuesday’s session before turning lower.  Resistance is resistance until it is broken, but that doesn’t mean it is impenetrable.  The short-term trend is deemed to be negative and market reaction to resistance overhead will be telling.  If the benchmark is unable to exceed the hurdle overhead, then, quite obviously, the short-term trend of lower-highs and lower-lows remains intact and the all-clear to re-accumulate risk (stocks) is not yet achieved.  The benchmark had become oversold ahead of Tuesday’s session, leading to the selling exhaustion that materialized into Tuesday’s rebound attempt.  Momentum indicators on the hourly look are starting to exhibit bearish characteristics, suggesting a more sustainable decline than just a two-day pullback.  The situation remains fluid and, given the very short-term nature of this view, can change at any moment.

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The recent uptick in volatility has caused investors to rush into the bond market, which had fallen out of favour through the fourth quarter.  The iShares 20+ Year Treasury Bond ETF broke above a triangle consolidation pattern in the past week after finding support around the 200-day moving average.  Should risk aversion persist, it would be expected that the fixed income ETF would remain above levels of variable support presented by 20 and 50-day moving averages.  Seasonally, the treasury bond ETF tends to flatline between now and May, underperforming the market in the process, therefore any deviations from this norm would be indicative of a negative perception towards stocks during this seasonally favourable timeframe for risk assets.

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On the economic front, a report on durable goods orders in the US was released before Tuesday’s session.  The headline print of December’s report indicated that new orders of durable goods in the US increased by 2.4%, a beat versus the consensus analyst estimate that called for an increase of 0.5%. Core capital goods, however, were lower by 0.9%, which was much weaker the 0.2% increase that was forecast. Stripping out the seasonal adjustments, the value of manufacturers’ new orders for durable goods industries actually increased by 7.8% in December, which is weaker than the 8.9% increase that is average for the last month of the year. For the year overall, durable goods orders were down by 3.7%, which is the weakest pace since the last recession and a negative divergence compared to the 2.1% increase that is average for the calendar year. We sent out further insight to subscribers intraday.  Signup now and we’ll send you our report.

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

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.80.

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Seasonal charts of companies reporting earnings today:

Microsoft Corporation Seasonal Chart Facebook, Inc. Seasonal Chart Mastercard Incorporated Seasonal Chart AT&T Inc. Seasonal Chart Novartis AG Seasonal Chart Boeing Company (The) Seasonal Chart McDonald's Corporation Seasonal Chart PayPal Holdings, Inc. Seasonal Chart General Electric Company Seasonal Chart Tesla, Inc. Seasonal Chart Mondelez International, Inc. Seasonal Chart Banco Santander Brasil SA Seasonal Chart Automatic Data Processing, Inc. Seasonal Chart Anthem, Inc. Seasonal Chart ServiceNow, Inc. Seasonal Chart Norfolk Southern Corporation Seasonal Chart General Dynamics Corporation Seasonal Chart Las Vegas Sands Corp. Seasonal Chart Illumina, Inc. Seasonal Chart Progressive Corporation (The) Seasonal Chart Lam Research Corporation Seasonal Chart Canadian Pacific Railway Limited Seasonal Chart Marathon Petroleum Corporation Seasonal Chart TE Connectivity Ltd. Seasonal Chart Ingersoll-Rand plc (Ireland) Seasonal Chart Canon, Inc. Seasonal Chart MPLX LP Seasonal Chart Stanley Black & Decker, Inc. Seasonal Chart Archer-Daniels-Midland Company Seasonal Chart CGI Inc. Seasonal Chart Rockwell Automation, Inc. Seasonal Chart Corning Incorporated Seasonal Chart Align Technology, Inc. Seasonal Chart AMERIPRISE FINANCIAL SERVICES, INC. Seasonal Chart Essex Property Trust, Inc. Seasonal Chart Hess Corporation Seasonal Chart Nasdaq, Inc. Seasonal Chart Mid-America Apartment Communities, Inc. Seasonal Chart Hologic, Inc. Seasonal Chart MarketAxess Holdings, Inc. Seasonal Chart Varian Medical Systems, Inc. Seasonal Chart Duke Realty Corporation Seasonal Chart Qorvo, Inc. Seasonal Chart Rollins, Inc. Seasonal Chart United Rentals, Inc. Seasonal Chart Avery Dennison Corporation Seasonal Chart Textron Inc. Seasonal Chart Banco Santander Chile Seasonal Chart Packaging Corporation of America Seasonal Chart AGNC Investment Corp. Seasonal Chart Fortune Brands Home & Security, Inc. Seasonal Chart SEI Investments Company Seasonal Chart Aspen Technology, Inc. Seasonal Chart Invesco Plc Seasonal Chart Santander Consumer USA Holdings Inc. Seasonal Chart Dolby Laboratories Seasonal Chart CACI International, Inc. Seasonal Chart Mellanox Technologies, Ltd. Seasonal Chart Prosperity Bancshares, Inc. Seasonal Chart Knight Transportation, Inc. Seasonal Chart Oshkosh Corporation Seasonal Chart Scotts Miracle-Gro Company (The) Seasonal Chart Cree, Inc. Seasonal Chart Tetra Tech, Inc. Seasonal Chart Cirrus Logic, Inc. Seasonal Chart Allegiant Travel Company Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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