Equity Clock

Stock Market Outlook for December 10, 2020

Oil stockpiles realized a shocking injection last week, a significant divergence compared to seasonal norms that call for drawdown of inventories to start December.

 

 

 

*** 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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Chemtrade Logistics Income Fund (TSE:CHE/UN.TO) Seasonal Chart

Waters Corp. (NYSE:WAT) Seasonal Chart

Wynn Resorts Ltd (NASD:WYNN) Seasonal Chart

Church & Dwight Co, Inc. (NYSE:CHD) Seasonal Chart

iShares S&P-TSX Capped REIT Index ETF (TSE:XRE.TO) Seasonal Chart

Diversified Royalty (TSE:DIV.TO) Seasonal Chart

Endeavour Mining Corp. (TSE:EDV.TO) Seasonal Chart

Lundin Gold Inc. (TSE:LUG.TO) Seasonal Chart

Platinum Group Metals Ltd. (TSE:PTM.TO) Seasonal Chart

Trevali Resources Corp. (TSE:TV.TO) Seasonal Chart

Invesco S&P-TSX Composite Low Volatility Index ETF (TSE:TLV.TO) Seasonal Chart

BlackRock Global Opportunities Equity Trust (NYSE:BOE) Seasonal Chart

Calamos Global Total Return Fund (NASD:CGO) Seasonal Chart

WisdomTree Europe SmallCap Dividend Fund (NYSE:DFE) Seasonal Chart

Morgan Stanley Emerging Markets Domestic Debt Fund (NYSE:EDD) Seasonal Chart

iShares MSCI Philippines ETF (NYSE:EPHE) Seasonal Chart

First Trust Emerging Markets Small Cap AlphaDEX Fund (NASD:FEMS) Seasonal Chart

First Trust Hong Kong AlphaDEX Fund (NASD:FHK) Seasonal Chart

First Trust High Income Long-Short Fund (NYSE:FSD) Seasonal Chart

JPMorgan Diversified Return International Equity ETF (AMEX:JPIN) Seasonal Chart

First Trust NASDAQ Smartphone Index Fund (NASD:NXTG) Seasonal Chart

ELEMENTS Rogers International Commodity Index – Total Return ETN (NYSE:RJI) Seasonal Chart

 

 

The Markets

Stocks dipped on Wednesday, reversing from record highs as the technology sector came under pressure amidst an anti-trust lawsuit filed against Facebook.  The S&P 500 Index slipped by eight-tenths of one percent, turning lower from all-time highs charted during the previous session.  For the S&P 500 ETF (SPY), price charted an outside reversal candlestick.  The candlestick pattern, derived by an open above the high of the prior day’s range and a close below the low of the previous session, is typically indicative of buyer exhaustion, observed around market peaks.  The fact that some buying demand did materialize during the afternoon session to lift the benchmark off of the low of the day suggests that investors have not completely let go, but it certainly suggests that the market may have hit a bit of a wall.  The breakout of the previous trading range between 3200 and 3500 continues to project upside potential towards 3800, but a consolidation period, as we have prepared subscribers for, is certainly possible and probable through the days ahead.  Support on the large-cap benchmark at rising 20 and 50-day moving averages now hovers around 3625 and 3506, respectively.

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

• The price of oil and the potential target for the commodity
• The Energy Sector
• Highlights from October’s Job Openings and Labor Turnover Survey and how to play them
• Rotation in the equity market

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On schedule for the Wednesday session, the Energy Information Administration (EIA) released its tally of petroleum inventories for the week just past.  The EIA notes that oil inventories surged by 15.2 million barrels last week, which is a shocking injection compared to the 1.4 million barrel drawdown that was expected by analysts.  Gasoline stockpiles, meanwhile, increased by 4.2 million barrels.  The result saw the days of supply of oil increase by half of a day to 35.6, while gasoline days of supply surged from 28.2 to 29.8.  The average days of supply for each at this point in December is 22.6 and 24.1, respectively.  We sent out further insight to subscribers, including our stance for the energy sector.  Subscribe now.

On the economic front, a report on job openings and labor turnover (JOLT) was released during the Wednesday session.  The headline print of the JOLT Survey indicated that job openings increased by 2.4% to 6.652 million in October, exceeding the consensus analyst estimate that called for a 1.4% decline to 6.400 million.  Just for context, as of October’s employment situation report, there were 11.1 million individuals that were declared unemployed, according to the Bureau of Labor Statistics, providing a ratio of unemployed to openings that is still close to 2 to 1.  Stripping out the seasonal adjustments, job openings actually increased by 6.9% in October, which is weaker than the 7.9% increase that is average for this time of year.  The year-to-date change through the first ten months of the year is higher by 18.8%, which is still hovering near half of the 30.4% increase that is average.  We sent out further insight to subscribers, including what the data is saying about how to be invested.  Subscribe now.

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.84.  As for institutional sentiment, the Dark Index, a gauge of dark pool activity, jumped to the highest level in weeks at 43.7% from 41.6% on Tuesday.  Levels 45% or higher are typically indicative of buying demand.  Institutions are still not feeling enticed to buy at present levels.

 

 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

 

S&P 500 Index

 

 

TSE Composite

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