Equity Clock

Stock Market Outlook for October 1, 2020

The S&P 500 Index has gained 1.2%, on average, in October with a frequency of gains at 65%.

 

 

*** 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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Piper Jaffray Cos. (NYSE:PJC) Seasonal Chart

3M Co. (NYSE:MMM) Seasonal Chart

PACCAR, Inc. (NASD:PCAR) Seasonal Chart

Korn Ferry Intl (NYSE:KFY) Seasonal Chart

Kirkland’s, Inc. (NASD:KIRK) Seasonal Chart

Hovnanian Enterprises, Inc. (NYSE:HOV) Seasonal Chart

Great Lakes Dredge & Dock Corp. (NASD:GLDD) Seasonal Chart

NLIndustries, Inc. (NYSE:NL) Seasonal Chart

Nuance Communications, Inc. (NASD:NUAN) Seasonal Chart

Resolute Forest Products Inc. (NYSE:RFP) Seasonal Chart

Lawson Products, Inc. (NASD:LAWS) Seasonal Chart

iShares MSCI Malaysia ETF (NYSE:EWM) Seasonal Chart

 

 

The Markets

Stocks gained during the last session of the third quarter as investors reacted to upbeat economic data along with news that negotiations pertaining to another economic stimulus bill were progressing.  The S&P 500 Index closed higher by just over eight-tenths of one percent, taking another stab at resistance around 20 and 50-day moving averages.  The two averages have now converged on one another for the first time since the start of March, placing a rather ominous  mark on the profile of the equity market.  Despite the close marginally above each of these hurdles, it remains difficult to conclude that the breakout was definitive.  Momentum indicators have curled higher with MACD seemingly on the verge of triggering a buy signal.  But pushing back on signs of emerging optimism is the 20-day moving average that continues to point lower, suggesting a negative short-term trend.  This has become a very headline dependent market, which makes speculating on the next move a pure gamble.  We would still like to see a more favourable risk-reward entry point to re-accumulate equity positions, but we have to be willing to declare defeat to our cautious stance should our criteria not be fulfilled and equity market momentum continues higher.

For the month ahead, the S&P 500 Index has gained 1.2%, on average, in October over the past 20 years.  Positive results have been realized in 65% of periods over the past 20 years.  The benchmark charts an average low around the middle of the month before moving higher into month-end, kicking off the best six months of the year, historically, for stocks.  We break it all down in our monthly report that was just released to subscribers.  Signup now and well send you our 82-page report, highlighting everything to look out for and how to position for the month(s) ahead. 

Just released…

Our 82-page monthly report for October has just been released to subscribers.  Here are the highlights:

• Equity market tendencies in the month of October
• The setup for the best six months of the year for stocks
• Fundamental drivers of the market then and now
• Focussed on the spread of respiratory illnesses
• Seasonal tendencies during Presidential Election years
• Stalling consumer momentum removing a tailwind behind the economy
• The dominant theme expected of the market through year-end
• Bottoming pattern on the chart of the US Dollar Index
• Strains growing in the credit market
• The technical status of the S&P 500 Index
• Positioning for the months ahead
• Sector reviews and ratings
• Notable stocks and ETFs entering their period of strength in October

Subscribe now and we’ll send you our report.

On schedule for the Wednesday session, the energy information administration released its status of petroleum inventories for the week just past.  The EIA reported that oil inventories declined by 2.0 million barrels last week, which is a divergence compared to the 1.57 million barrel injection that was expected by analysts.  Gasoline stockpiles, meanwhile, increased (**in our report, we erroneously indicated that they declined**) by 683,000 barrels, while distillates were down by 3.2 million barrels.  The result saw the days of supply of oil remain unchanged 37.0, while gasoline days of supply ticked higher by three-tenths to 26.9.  The average days of supply for each at this point in September is 21.6 and 23.5, respectively.  We sent out further insight to subscribers intraday.  Subscribe now.

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.83.

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

TSE Composite

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