Equity Clock

Stock Market Outlook for November 10, 2020

This gauge of market breadth suggests that the rising trend of stocks is sustainable.

 

 

 

*** 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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Home Depot, Inc. (NYSE:HD) Seasonal Chart

Xerox Corp. (NYSE:XRX) Seasonal Chart

Packaging Corp Of America (NYSE:PKG) Seasonal Chart

Spectrum Brands Inc. (NYSE:SPB) Seasonal Chart

United Bancorp, Inc. (NASD:UBCP) Seasonal Chart

Choice Properties REIT (TSE:CHP-UN.TO) Seasonal Chart

First Trust NASDAQ Global Auto Index Fund (NASD:CARZ) Seasonal Chart

First Trust Europe AlphaDEX Fund (NASD:FEP) Seasonal Chart

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

Direxion NASDAQ-100 Equal Weighted Index Shares (AMEX:QQQE) Seasonal Chart

IQ US Real Estate Small Cap ETF (NYSE:ROOF) Seasonal Chart

 

 

The Markets

Stocks soared on Monday as positive vaccine news provided the catalyst major benchmarks needed to break through levels of resistance overhead, on an intraday basis, at least.  The S&P 500 Index gained 1.17%, breaking out to a new record high intraday following news that Pfizer’s coronavirus vaccine has been tested to be 90% effective, much higher than the 50% to 60% effectiveness rate that was expected by researchers.  The large-cap benchmark closed almost precisely at previous resistance presented by the October high near 3550.  At the highs of the day, the benchmark was up by 3.82%,suggesting an end to the 300-point trading range that has encompassed the past couple of months.  As highlighted in a recent report, the resolution of the trading range implies a 300-point move in the direction of the break.  This would imply a conservative target of around 3800.  The fact that the benchmark closed around the lows of the day doesn’t necessarily violate the breakout, but, clearly, investors are inclined to test previous levels of resistance as support.  MACD triggered a new buy signal on Thursday and Monday’s follow-through from last week’s strong gains emphasizes that there is a fire beneath this market as investors cover hedges/negative bets that had been held into election day.  Seasonally, while the intermediate average calls for gains through the end of the year, typically the market realizes some softer performance following the start of November and post-election surge.  However, with positive catalysts continuing to jolt investors out of negative bets, the rally remains ongoing.  Weakness between now and the days ahead of the US Thanksgiving typically provide a secondary opportunity to load up on risk within investment portfolios, assuming the October weakness was not pursued.  We will be watching to see if previous resistance around 3550 can hold as support.

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On Friday, we had the privilege of presenting virtually at the Money Show on the topic of “Using Seasonality to Invest During a Pandemic.”  Response to this presentation has been overwhelmingly positive.  Thank you for the feedback that we have received.  If you missed our presentation, we have uploaded the slide deck to browse at your leisure in our archive.  The link as follows (Subscribers, please login to access): https://charts.equityclock.com/featured/to_money_show_webinar_november_2020

Sentiment on Monday, as gauged by the put-call ratio, ended bullish at 0.74.  The Dark Index, our gauge of institutional sentiment, shifted lower to 37.9%.  Typically, levels 45% or higher are indicative of institutional buying demand.

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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