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Stock Market Outlook for October 16, 2015


The gap between the actual days of supply of Oil and the average is now the highest of the year, almost 7 days above average.


Real Time Economic Calendar provided by


**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:

Steel Dynamics, Inc. (NASDAQ:STLD) Seasonal Chart

Sealed Air Corp. (NYSE:SEE) Seasonal Chart

Fastenal Company (NASDAQ:FAST) Seasonal Chart

CA, Inc. (NASDAQ:CA) Seasonal Chart


The Markets

Stocks surged on Thursday, despite  a weak set of economic data pertaining to manufacturing.  The S&P 500 Index gained nearly 1.5%, marginally exceeding minor resistance presented around 2020.  The key test remains overhead around horizontal resistance at 2040, along with the 200-day moving average, which is slightly higher around 2060.  This longer-term average continues to roll over, providing concerns relating to the longer-term trend as long as the benchmark holds below this important pivot point. For now, the short-term trend remains quite healthy and with the benchmark testing a potential level of intermediate support around the 50-day moving average, along with horizontal support around 1990, the intermediate implications are slowly turning positive.  Enjoy the short-term trend but remain cognizant of the longer-term risks should the benchmark fail around its long-term moving average.

On the economic front, a couple of reports pertaining to manufacturing certainly did not set an encouraging tone to the session.  The Empire State Manufacturing Survey reported another negative print, this time at –11.36, firmly below the consensus estimate of –7.0.  Similarly, the Philadelphia Fed Index showed –4.5, also firmly below the consensus estimate of –1.0.  Stripping out seasonal adjustments, the empire manufacturing survey showed –17.92, below the average for this time of year of +4.1.  As well, the Philly Fed report showed a non-seasonally adjusted print of –4.1, below the October average of +10.9.  Both reports show a year-to-date trend that is well below average; neither have shown the late summer rebound that is typical following the factory shutdown period.  Seasonally, manufacturing tends to decline through the last three months of the year, suggesting further negative pressures to come for this beaten down segment of the economy.

Meanwhile, on the commodity front, a report released during the session indicated a sharp build in oil inventories of 7.6 million barrels, pushing the days of supply back to around the highs of the year.  At 29.8 days of supply, inventories are now 6.84 days above average, the largest gap compared to the average trend recorded this year.  Inventories typically rise through to mid-November, ahead of the busy travel time related to the end of year holidays.  Despite this seemingly bearish report, the price of West Texas Intermediate Crude closed higher by 1.23%, bouncing from support around its 50-day moving average; resistance around the 200-day moving average remains the key hurdle.  Also in the report from the Energy Information Administration was inventory levels for Gasoline, which declined by 2.6 million barrels, resulting in a decline in the days of supply from 24.8 to 24.4.  Days of supply of gasoline typically declines through the month of October as refiners transition from production of summer blend to winter blend now that the summer driving season has concluded.  The price of gasoline remained unchanged on the day.

Sentiment on Thursday, as gauged by the put-call ratio, ended bearish at 1.11.




Seasonal charts of companies reporting earnings today:



S&P 500 Index



TSE Composite