Equity Clock

Stock Market Outlook for October 21, 2020

While stocks and bonds struggle with resistance, the price of copper just broke out to a new 52-week high.

 

 

 

*** 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:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

Callaway Golf Co. (NYSE:ELY) Seasonal Chart

Canfor Corp. (TSE:CFP.TO) Seasonal Chart

West Fraser Timber Co. Ltd. (TSE:WFT.TO) Seasonal Chart

Energy Fuels, Inc. (TSE:EFR.TO) Seasonal Chart

Cantel Medical Corp. (NYSE:CMD) Seasonal Chart

Alnylam Pharmaceuticals, Inc. (NASD:ALNY) Seasonal Chart

Gerdau Usa (NYSE:GGB) Seasonal Chart

BCB Bancorp, Inc. (NJ) (NASD:BCBP) Seasonal Chart

First Asset Tech Giants Covered Call ETF (CAD Hedged) (TSE:TXF.TO) Seasonal Chart

Invesco S&P SmallCap Information Technology ETF (NASD:PSCT) Seasonal Chart

Invesco Dynamic Semiconductors ETF (NYSE:PSI) Seasonal Chart

 

Upcoming Event:

On November 6th at 2:00pm ET, we will be presenting at the Money Show’s Virtual Expo on the topic of “Using Seasonality to Invest During a Pandemic.”  Registration is free via the following link: https://online.moneyshow.com/2020/november/canada-virtual-expo/speakers/74e9996b76d045da98697115220d2918/jon-vialoux/?scode=051443

 

The Markets

Stocks rose on Tuesday as optimism pertaining to another stimulus bill kept stocks supported throughout the session.  The S&P 500 Index gained just less than half of one percent, clawing back some of the prior session’s decline.  The benchmark continues to hover close to its rising 20 and 50-day moving averages, which are in the process of converging in a bullish manner.  This is logical action during a period of uncertainty as investors peg the market to a significant average.  Support is implied around these variable hurdles, but the more important level that has the eye of the market is the double-top around 3588.  A break of the 20 and 50-day moving averages below and, ultimately, horizontal support around 3200 would confirm the threatening topping pattern.  For now, until a catalyst materializes, there is presently not the inertia to either break out above resistance nor breakdown below support, suggesting a merely range-bound tape ahead of the election.  During presidential election years, the market tends to chart a significant low around the end of October, leading to buying opportunities for the best six months of the year for stocks that runs from November to April.

On the economic front, a report on housing starts was released before Tuesday’s opening bell.  The headline print of September’s report indicated that activity increased by 1.9% last month to a seasonally adjusted annualized rate of 1.415 million.  Analysts were expecting an increase of 5.4% to a rate of 1.463 million.  Stripping out the adjustments, starts actually increased by 0.4% in September, which is stronger than the 1.1% decline that is average for this time of year.  The year-to-date change is now higher by 15.4% through the first three quarters of the year, which is 16.3% below the seasonal average trend.  This is the weakest year-to-date performance since 2008.  We sent out further insight to subscribers intraday.  Subscribe now.

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.82.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

Sponsored By...