Equity Clock

Stock Market Outlook for December 2, 2020

As stocks continue to chart record highs, signs of complacency are emerging as the bears are forced to capitulate.

 

 

*** 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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Whirlpool Corp. (NYSE:WHR) Seasonal Chart

Extendicare Inc. (TSE:EXE.TO) Seasonal Chart

Cognex Corp. (NASD:CGNX) Seasonal Chart

Fortinet Inc. (NASD:FTNT) Seasonal Chart

Goldfield Corp. (AMEX:GV) Seasonal Chart

Chesswood Group Ltd. (TSE:CHW.TO) Seasonal Chart

SSR Mining Inc. (TSE:SSRM.TO) Seasonal Chart

Vanguard FTSE Emerging Markets All Cap Index ETF (TSE:VEE.TO) Seasonal Chart

iShares Edge MSCI Min Vol EAFE Index ETF (TSE:XMI.TO) Seasonal Chart

BlackRock NY Muni Income Fund (NYSE:BFY) Seasonal Chart

iShares MSCI Chile Capped ETF (NYSE:ECH) Seasonal Chart

iShares MSCI Global Metals & Mining Producers ETF (AMEX:PICK) Seasonal Chart

Invesco Cleantech ETF (NYSE:PZD) Seasonal Chart

SPDR EURO STOXX Small Cap ETF (AMEX:SMEZ) Seasonal Chart

Real Estate Select Sector SPDR Fund (NYSE:XLRE) Seasonal Chart

 

 

The Markets

Stocks posted strong gains to start the month of December as investors reacted to the continued decline in the US Dollar and news that a bipartisan group of lawmakers unveiled $900 Billion dollar stimulus plan.  The S&P 500 Index closed higher by 1.13%, charting another record closing high.  Support remains apparent at the upper limit to the previous trading range around 3500.  The upside target of the previous 300-point trading range calculates a move to 3800, now just 3.7% above present levels.  Rising 20 and 50-day moving averages at 3566 and 3460, respectively, remain a reliable backstop to the short and intermediate-term trends.  A rebound in shares of large-cap technology helped to support the broad market move on the day as funds flowed into the market to start the new month.

Today, in our Market Outlook for subscribers, we discuss the following:

• A short-term pattern on the chart of the S&P 500 Index
• The US Dollar Index
• Construction Spending in the US
• Chart pattern for the Home Builders and our bias
• Alternative to Home Building stocks
• Canada GDP: What is driving activity and the industries that are benefiting
• The sentiment of investors and what it means

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On the economic front, a report on construction spending in the US was released during Tuesday’s session.  The headline print of October’s report indicates that activity increased by 1.3% for the month, which was stronger than the consensus estimate that called for a 0.8% rise.  The year-over-year change now sits at +3.7%.  Stripping out the seasonal adjustments, construction spending in the US actually declined by 1.7% in October, which is weaker than the 1.2% decline that is average for this time of year.  The year-to-date change is higher by 20.4%, which is weaker than the seasonal norm that calls for an increase of 22.9%.  We sent out further insight to subscribers intraday.  Subscribe now.

Just released…

Our monthly report for December is now available for download.  The report is our longest one yet, coming in at 110 pages.  Don’t worry, the report is broken down into sections with appropriate headings, so you can read a little or you can read it all.

Highlights in this report include:

• Equity market tendencies in the month of December
• The conclusion of the retail trade
• The risk of another economic derailment through the holiday season
• Time to monitor coincident indicators of strains in the system
• What investor sentiment is saying
• The pessimistic investor
• What the bond market is saying about the sentiment of investors
• The rise of the Copper/Gold Ratio
• The strength in shipping activity beyond its average seasonal peak
• Tracking the spread of the coronavirus
• The impact of the election cycle on the equity market in the year ahead
• Time to rotate to Canadian equities?
• Earnings expectations
• The significance of the gains in the market from the past month
• How to play the expansion of market breadth
• 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 December

Subscribe now and we’ll send you this extensive look at the state of the market and how to position for it.

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.65. 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

TSE Composite

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