Equity Clock

Stock Market Outlook for November 5, 2021

Treasury yields firmly lower, interest rate sensitive equities down sharply, and the US Dollar is jumping…What is going on?!

 

 

 

*** 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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Gildan Activewear, Inc. (TSE:GIL.TO) Seasonal Chart

Monster Beverage Corp. (NASD:MNST) Seasonal Chart

Old Dominion Freight Line, Inc. (NASD:ODFL) Seasonal Chart

Teradata Corp. (NYSE:TDC) Seasonal Chart

VanEck Vectors Pharmaceutical ETF (NASD:PPH) Seasonal Chart

 

 

The Markets

Stocks maintained their relentless rise higher on Thursday as investors transitioned back to growth amidst a sharp drop in the cost of borrowing following the latest Fed announcement.  The S&P 500 Index gained four-tenths of one percent, led by the go-to growth sectors of technology and consumer discretionary.  The benchmark continues to push further into overbought territory with the Relative Strength Index now sitting at a lofty 75.04.  Levels above 70 reach the threshold of an overbought classification.  While this status may have implications of a stretched market or one that is about to imminently correct, overbought indications are characteristic of bullish trending markets, which we certainly find ourselves in.  While a retracement back to levels of short and intermediate support at 20 and 50-day moving averages at 4524 and 4472, respectively, is reasonable and healthy within any bull market trend, the bottom line is that the trends on intermediate and long-term timescales remain positive and there is little in the way of resistance that is set to stand in the way. 

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

• The jump in the US Dollar and the level that would get us concerned given the negative impact it is imposing on risk assets
• US Banks and the level this bank ETF needs to hold in order to maintain a positive bias
• Weekly Jobless Claims and the health of the labor market
• Preview of what to expect of October’s Nonfarm Payroll report
• Natural gas inventories

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Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.69.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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