Equity Clock

Stock Market Outlook for October 30, 2020

While the price of oil plunges, the price of producers is starting to perk up relative to the commodity – positive for the commodity and positive for the sector, if continued.

 

 

 

*** 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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Norbord Inc. (TSE:OSB.TO) Seasonal Chart

Cemex SA (NYSE:CX) Seasonal Chart

Century Aluminum Co. (NASD:CENX) Seasonal Chart

DR Horton Inc. (NYSE:DHI) Seasonal Chart

Regeneron Pharmaceuticals, Inc. (NASD:REGN) Seasonal Chart

First American Corp. (NYSE:FAF) Seasonal Chart

Synnex Corp. (NYSE:SNX) Seasonal Chart

iRobot Corp. (NASD:IRBT) Seasonal Chart

Acco Brands Corp. (NYSE:ACCO) Seasonal Chart

Asure Software (NASD:ASUR) Seasonal Chart

First Trust Value Line 100 ETF (NYSE:FVL) Seasonal Chart

First Trust Industrials-Producer Durables AlphaDEX Fund (NYSE:FXR) Seasonal Chart

Industrial Select Sector SPDR Fund (NYSE:XLI) Seasonal Chart

Cummins Inc. (NYSE:CMI) Seasonal Chart

First Majestic Silver Corp. (TSE:FR.TO) Seasonal Chart

Watts Water Technologies, Inc. (NYSE:WTS) Seasonal Chart

Zoetis Inc. (NYSE:ZTS) Seasonal Chart

 

Upcoming Event:

On November 6th at 2:00pm ET, we will be presenting at the Money Show’s Virtual Expo on the topic of “Using Seasonality to Invest During a Pandemic.”  Registration is free via the following link:

 

 

The Markets

Markets snapped back on Thursday as stocks had become short-term oversold following Wednesday’s plunge.  The S&P 500 Index closed higher by 1.19%, reaching back to the gap that was opened in the prior session between 3340 and 3390.  The hurdle is just below recently broken 20 and 50-day moving averages, presenting a convergence of hurdles that are in a position to cap any near-term advance.  Thursday’s bounce closes around the 100-day moving average.  Double-top resistance is apparent around 3588, while horizontal support can be seen around 3200; until either are violated, a range-bound trade is implied.

Energy stocks also saw a large rally-back on the day, despite the plunge in oil prices to open the session.  The price of West Texas Intermediate had plunged by over 6% to test the lowest levels since the spring below $36 a barrel.  Buyers, however, stepped in to support the price into the close to keep the trading range for the commodity alive between $36 and $42.  The energy ETF (XLE) was the best performing sector on the day, closing higher by over 3% and reversing the loss that was recorded just after the opening bell.  The price of the ETF has been hovering fairly close to the lows of the year charted in March, but reversal sessions like Thursday are providing hints of selling exhaustion, possibly leading to a shift in the trajectory of the beleaguered market segment.  Momentum indicators continue to show characteristics of a bearish trend, however, early signs of momentum indicators positively diverging from price can be seen.  When stocks of the producers start to move higher as the commodity moves lower, thereby outperforming, a powerful signal is implied of growing investor interest.  Downside momentum is waning on the chart of the energy sector ETF versus the the price of oil, hinting a breakout may be imminent.  Any improvement in the energy sector would provide a big boost to overall investor sentiment.

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.90.  The dark index ticked up to the highest level in weeks at 41.9%, still below the 45% threshold that we are seeking.

 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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