Equity Clock

Stock Market Outlook for October 23, 2020

The S&P 500 Index continues to consolidate above support at 3425, but the moves below the surface are becoming intriguing.

 

 

 

*** 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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Eaton Corp. (NYSE:ETN) Seasonal Chart

Hologic, Inc. (NASD:HOLX) Seasonal Chart

Hanover Insurance Group, Inc. (NYSE:THG) Seasonal Chart

ABM Industries, Inc. (NYSE:ABM) Seasonal Chart

EZCORP, Inc. (NASD:EZPW) Seasonal Chart

Marten Transport, Ltd. (NASD:MRTN) Seasonal Chart

Covenant Transportation Group Inc. (NASD:CVTI) Seasonal Chart

Heico Corp. (NYSE:HEI/A) Seasonal Chart

Acxiom Corp. (NYSE:RAMP) Seasonal Chart

Vanguard S&P Mid-Cap 400 Growth ETF (NYSE:IVOG) Seasonal Chart

Vanguard Materials ETF (NYSE:VAW) Seasonal Chart

SPDR S&P Semiconductor ETF (NYSE:XSD) Seasonal Chart

Bombardier (TSE:BBD/B.TO) Seasonal Chart

Bausch Health Cos. Inc. (NYSE:BHC) 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:

 

 

The Markets

Stocks pushed higher, albeit tentatively, on Thursday as investors continued to gauge the progress of stimulus negotiations.  The S&P 500 Index closed higher by just over half of one percent after finding support around its rising 20-day moving average at the lows of the session.  Both the 20 and 50-day moving averages remain within close proximity just above 3400.  But the positive session wasn’t enough to support the MACD from falling below its signal line in what amounts to a fresh sell signal on the momentum indicator.  The bearish crossover was realized at a lower level than the start of September peak, which continues a trend of lower-lows and lower-highs that has been apparent since June.  The negative momentum divergence is suggestive of waning buying demand, but this has yet to impact the level of the benchmark to any significant degree.

On the economic front, a report on existing home sales in the US was released during Thursday’s session.  The headline print of September’s report indicates that activity increased by 9.4% last month to a seasonally adjusted annualized rate of 6.54 million.  The result was much better than the consensus analyst estimate that called for a rate of 6.2 million.  The year-over-year change sits higher by 20.9%.  Stripping out the seasonal adjustments, existing home sales were actually unchanged in September versus the month prior, which is significantly stronger than the 15.2% decline that is average for this time of year.  The year-to-date change is now higher by 29.0%, which is the best performance through the first three quarters of the year that we have on record.  The average increase through the end of September is 8.8%.  We sent out further insight to subscribers intraday.  Signup now.

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.80.

 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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