Tech Talk Financial Network
0
All posts from Tech Talk Financial Network
Tech Talk Financial Network in Equity Clock,

Stock Market Outlook for October 23, 2015

 

S&P 500 Index breaks through resistance at 2040, but the key test may be the 200-day average directly overhead.

 

Real Time Economic Calendar provided by Investing.com.

 

**NEW** As part of the ongoing process to offer new and up-to-date information regarding seasonal and technical investing, we are adding a section to the daily reports that details the stocks that are entering their period of seasonal strength, based on average historical start dates.   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:

Lennox International Inc. (NYSE:LII) Seasonal Chart

Agrium Inc. (TSE:AGU) Seasonal Chart

Snap-on Incorporated (NYSE:SNA) Seasonal Chart

Harris Corporation (NYSE:HRS) Seasonal Chart

Deere & Company (NYSE:DE) Seasonal Chart

American Tower Corporation (NYSE:AMT) Seasonal Chart

Abercrombie & Fitch Co. (NYSE:ANF) Seasonal Chart

Alcoa Inc. (NYSE:AA) Seasonal Chart

 

The Markets

Positive comments from ECB President Mario Draghi and several better-than-expected earnings reports from top companies provided the catalyst for the S&P 500 Index to break through resistance at 2040 on Thursday.  The only sector to finish in the red was heath care as the scrutiny around stocks in this space continues.  The “anything but health care” market is now up for a battle as major benchmarks reach 200-day moving average lines.  The S&P 500 Index, Dow Jones Industrial Average, and Nasdaq Composite are all up against what could be a significant level of resistance as the market attempts to generate a new positive trend following this summer’s correction.  The S&P 500 Index is up around 9% since charting the double-bottom low at the end of September and a round of profit-taking should be expected at some point.  The start to the favourable six months for equity markets is just days away and investors that remain on the sidelines following the significant rally over the past month are left with a dilemma as to whether to commit new capital around these intermediate highs.

On the economic front, a report on Existing Home Sales wrapped up a busy week for housing data.  The headline print showed that existing home sales grew 4.7% in September to a seasonally adjusted annual rate of 5.55 million, topping the consensus estimate that called for 5.35 million.  Stripping out seasonal adjustments, sales of existing homes fell 6.5%, much better than the 15.8% decline that has become average over the past 15 years.  The year-to-date change in sales now sits at 14.0%, above the 9.1% average through the month of September.  Strength in September was driven by less than average declines in each of the four regions as home buyers took advantage of the later than average labour day holiday to go shopping.  While sales were above average in September, so was the inventory of housing, potentially keeping a lid on price appreciation of real estate over the months ahead.  Sales and inventories seasonally dip into the end of the year as the holiday season approaches.

And finally, the weekly report on Natural Gas inventories didn’t help the prospects for the seasonal trade in the commodity.  Inventory of the energy commodity grew by 81 billion cubic feet to 3,814 billion cubic feet, the highest since November of 2013.  Year-to-date change in natural gas storage remains inline with the 20-year average.  The price of the commodity declined by 1.04%, continuing to be constrained by its declining 20-day moving average.  Seasonally, the price of natural gas typically rises through September and October, but, this is clearly a case of the fundamental factors not aligning with the seasonal influences.

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.91.

 

Sectors and Industries entering their period of seasonal strength:

S5METL Index Relative to the S&P 500

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

TSE Composite