Equity Clock

Stock Market Outlook for September 18, 2020

The year-to-date change in housing starts is now the weakest since 2008 as the real estate market becomes bifurcated.

 

 

 

*** 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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Park Lawn (TSE:PLC.TO) Seasonal Chart

Orocobre Ltd. (TSE:ORL.TO) Seasonal Chart

Transportadora De Gas Sur (NYSE:TGS) Seasonal Chart

China Biologic Products (NASD:CBPO) Seasonal Chart

Loral Space & Communications, Inc. (NASD:LORL) Seasonal Chart

iShares Core Dividend Growth ETF (AMEX:DGRO) Seasonal Chart

DB Gold Double Short ETN (NYSE:DZZ) Seasonal Chart

Vanguard S&P 500 Value ETF (NYSE:VOOV) Seasonal Chart

ProShares UltraShort Silver (NYSE:ZSL) Seasonal Chart

WestJet Airlines Ltd. (TSE:WJA.TO) Seasonal Chart

PHX Energy Services Corp. (TSE:PHX.TO) Seasonal Chart

Northfield Bancorp, Inc. (NASD:NFBK) Seasonal Chart

Power Integrations, Inc. (NASD:POWI) Seasonal Chart

TFS Financial Corp. (NASD:TFSL) Seasonal Chart

Orange (NYSE:ORAN) Seasonal Chart

Pampa Energia SA (NYSE:PAM) Seasonal Chart

Sierra Wireless, Inc. (NASD:SWIR) Seasonal Chart

HomeStreet, Inc. (NASD:HMST) Seasonal Chart

Berry Plastics Group Inc. (NYSE:BERY) Seasonal Chart

iShares Canadian Government Bond Index ETF (TSE:XGB.TO) Seasonal Chart

 

 

The Markets

Stocks dipped on Thursday, following through with Wednesday afternoon’s selloff that coincided with the conclusion of the FOMC announcement.  The S&P 500 Index shed just over eight-tenths of one percent, ending off of the lows of the day.  The benchmark remains constrained between support at the 50-day moving average and resistance at the 20-day, a break, one way or the other, is likely imminent.  Recall, our previous comments have related to believing in the intermediate trend until support at the 50-day moving average is violated.  While the hurdle has not been broken, yet, resistance at the 20-day presents a threatening signal as it points to a hurdle that investors are more inclined to sell.  Throughout the rebound rally, points of resistance have been few and far between, providing the framework for the unhindered rise in prices.  Should the 50-day moving average break, the downside move is likely to be swift and pronounced, shaking investors loose of positions.  Momentum indicators on the daily chart are starting to adopt characteristics of a bearish trend with RSI below 50 and MACD falling towards 0.  MACD currently sits at the lowest level since April and the negative divergence that has been recorded with respect to this indicator has suggested a lack of buying demand.  Seasonally, mean-reversion is notorious in the month of September, a phenomena that is playing out in a big way this year given the recent froth that was charted in some the of the technology oriented segments in recent months.

On the economic front, a report on housing starts in the US was released before Thursday’s opening bell.  The headline print of August’s report indicated that activity declined by 5.1% last month to a seasonally adjusted annualized rate of 1.416 million.  Analysts were expecting a decline of a mere 0.4% to a rate of 1.486 million.  Stripping out the adjustments, starts actually declined by 8.5% in August, which is weaker than the 4.2% decline that is average for this time of year.  The year-to-date change is now higher by 17.5% through the first eight months of the year, which is 15.2% below the seasonal average trend.  This is the weakest year-to-date performance since 2008.  We sent out further insight to subscribers intraday.  Signup now to be included on our timely insight.

Sentiment on Thursday, as gauged by the put-call ratio, ended close to neutral at 0.96

 

 

 

 

Seasonal charts of companies reporting earnings today:

• No significant reports scheduled for today

 

 

S&P 500 Index

 

 

TSE Composite

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