Equity Clock

Stock Market Outlook for November 2, 2020

The S&P 500 Index has gained 1.3%, on average, in November with 75% of periods closing higher.

 

 

*** 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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Lincoln National Corp. (NYSE:LNC) Seasonal Chart

Ethan Allen Interiors Inc. (NYSE:ETH) Seasonal Chart

American Equity Investment Life Holding Company (NYSE:AEL) Seasonal Chart

Health Management Systems, Inc. (NASD:HMSY) Seasonal Chart

Beacon Roofing Supply Inc. (NASD:BECN) Seasonal Chart

Century Casinos, Inc. (NASD:CNTY) Seasonal Chart

ArcelorMittal SA (NYSE:MT) Seasonal Chart

Direxion Daily Financial Bull 3x Shares (NYSE:FAS) Seasonal Chart

Vanguard Industrials ETF (NYSE:VIS) Seasonal Chart

Morneau Shepell Inc. (TSE:MSI.TO) Seasonal Chart

Ritchie Bros. Auctioneers Inc. (TSE:RBA.TO) Seasonal Chart

Forward Air Corp. (NASD:FWRD) Seasonal Chart

Winnebago Industries Inc. (NYSE:WGO) Seasonal Chart

Owens Corning Inc. (NYSE:OC) Seasonal Chart

Pizza Pizza Royalty Corp. (TSE:PZA.TO) Seasonal Chart

iShares S&P Mid-Cap 400 Value ETF (NYSE:IJJ) Seasonal Chart

Vanguard Russell 3000 ETF (NASD:VTHR) 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

Selling pressures resumed on Friday as investors reacted negatively to the release of technology earnings after Thursday’s closing bell.  The S&P 500 Index closed down by 1.21%, ending well off the low of the session that saw a decline of 2.20%.  Momentum indicators continue to point lower following the MACD sell signal triggered in the week prior.  The MACD histogram continues to decline, but, perhaps some hint of optimism, the downside momentum of this momentum indicator is showing signs of waning.  Double-top resistance around 3588 and support at 3200 defines the limits of what can presently be deemed as a trading range.  Typically, during election years, stocks tend to chart a low around the end of October, ahead of the election itself.  Once the votes are cast and the uncertainties are lifted, stocks tend to resume their upward march.

Today marks the first trading session of November, which is the first month in the best six months of the year for stocks.  Over the past 20 years, the S&P 500 Index has averaged a gain of 1.3% in this second to last month of the year with 75% of periods showing positive results.  The strongest period in the month are the days/weeks around the US Thanksgiving holiday as investment managers take holidays and negative bets are typically limited going into the last month of the year.  We break down all of the themes and things to look for in the month ahead in our monthly report, which has just been released.  Subscribe now and we’ll send you this report.

Just Released…

Our monthly report for November was just sent out to subscribers, breaking down everything you need to know for the month(s) ahead.

Highlights in this report include:

• Equity market tendencies in the month of November
• Shift of focus on the rising level of coronavirus cases in the US
• Return of strength in the consumer going into the holiday spending season
• A healthy consumer follows a healthy labor market
• The strength in the manufacturing economy
• Our call through the back half of the year
• The impact of the presidential election on the equity market in the year ahead
• The rise of Bitcoin
• The lack of conviction to stocks ahead of the presidential election
• The potential fuel for stocks through the end of the year
• Key metric to track to determine systemic strains
• Is the rising trend of stocks stemming from the market low in March becoming sustainable?
• Time to shift focus to smaller cap stocks
• Bonds prices showing an intermediate declining trend
• 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 November

Subscribe now to receive a copy of this report.

Sentiment on Friday, as gauged by the put-call ratio, ended slightly bearish at 1.03.  The dark index ticked higher for a second day to 43.6%, the highest level since the start of October.  A level of 45% or higher generally indicates buying demand.

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

TSE Composite

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