Equity Clock

Stock Market Outlook for February 1, 2021

The path of the market, so far, is playing out exactly according to our forecasts.  Find out what comes next in our monthly report for February.

 

 

 

*** 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.

Adobe Systems, Inc. (NASD:ADBE) Seasonal Chart

Allstate Corp. (NYSE:ALL) Seasonal Chart

Chevron Corp. (NYSE:CVX) Seasonal Chart

Hartford Financial Services Group, Inc. (NYSE:HIG) Seasonal Chart

Progressive Corp. (NYSE:PGR) Seasonal Chart

Sonic Automotive, Inc. (NYSE:SAH) Seasonal Chart

ProShares Ultra Semiconductors (NYSE:USD) Seasonal Chart

Flowers Foods, Inc. (NYSE:FLO) Seasonal Chart

Core Laboratories N V (NYSE:CLB) Seasonal Chart

1-800 FLOWERS.COM, Inc. (NASD:FLWS) Seasonal Chart

Tourmaline Oil Corp. (TSE:TOU.TO) Seasonal Chart

VanEck Vectors Retail ETF (NYSE:RTH) Seasonal Chart

 

 

The Markets

Stocks dropped on Friday as investors continued to react to the distortions in the market caused by a few highly speculative names (eg. Gamestop, AMC Entertainment).  Disappointing vaccine trial data from Johnson & Johnson also weighed.  The S&P 500 Index dropped by almost 2%, capping off the weakest week for the large-cap benchmark since the end of October.  Short-term support at the rising 20-day moving average has been violated.  The benchmark closed almost precisely at its rising 50-day moving average at 3715 and is now down on the year.  While the activity over the past week was a shock to many, the price action is exactly inline with what we have been forecasting in our regular reports that we provide to subscribers.  Weakness beyond the first week of the year has been the average for the market over the past two decades and caution is typically warranted.  We will be watching for evidence that levels around intermediate support at the 50-day moving average will hold as support.  If not, downside risks move to horizontal support at 3550, representing  the upper limit of the range that the benchmark broke out from in November.

Today, in our Market Outlook to subscribers, we discuss the following:

• Tendency for the equity market in the month of February
• Silver
• Canada’s report on Gross Domestic Product (GDP) and what was notable for the fundamental theme influencing our investment decisions for the months ahead
• What to look for in investor sentiment in order to ratchet up our exposure to risk

Subscribe now and we’ll send this outlook to you.

For the month ahead, February is typically not a strong period for equity market performance.   Over the past 20 years, the S&P 500 Index has shed six-tenths of a percent in this second month of the year, matching the second weakest monthly return on the calendar.  In this second month of the year, investors have largely digested the results of earnings season and economic performance during this winter month is typically slower.  But this certainly does not mean an outright ban on equity market holdings in your portfolio.  Subscribe now to receive our monthly report for February to obtain further insight on how to position for the month(s) ahead.

Just Released…

Our 99-page monthly report for February has been distributed to subscribers providing insight on how to position for the month(s) ahead.

Highlights in the report include:

• Equity market tendencies in the month of February
• Investor Sentiment
• Bubbles and signs of excess in the market
• How economic data is comparing to forecasts
• Jump in yield spreads and how to benefit
• Treasury Bonds and when to play
• The decline in high yield spreads
• Market Volatility
• Gold and Silver
• US and Canadian dollars and where they are headed
• Emerging markets
• Commodities
• Tracking the spread of the coronavirus
• The seasonal rise in jobless claims and what it says about the labor market
• The technical status of the S&P 500 Index
• Equity market breadth and what it has to say about the sustainability of the market strength
• The change of industry ratings
• Positioning for the months ahead
• Sector reviews and ratings
• Stocks that have frequently gained in the month of February
• Notable stocks and ETFs entering their period of strength in February

Subscribe now and we’ll send this report directly to your inbox or download immediately within our report archive.

Sentiment on Friday, as gauged by the put-call ratio, ended slightly bullish at 0.93. 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

Sponsored By...