Equity Clock

Stock Market Outlook for December 23, 2020

The put-call ratio has fallen to the lowest level in years, suggesting investor complacency.

 

 

 

*** 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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American Eagle Outfitters, Inc. (NYSE:AEO) Seasonal Chart

Dundee Precious Metals, Inc. (TSE:DPM.TO) Seasonal Chart

Buckle, Inc. (NYSE:BKE) Seasonal Chart

Newtek Capital, Inc. (NASD:NEWT) Seasonal Chart

Boston Pizza Royalties Income Fund (TSE:BPF/UN.TO) Seasonal Chart

Melcor Developments Ltd. (TSE:MRD.TO) Seasonal Chart

Brookfield Asset Management, Inc. (TSE:BAM/A.TO) Seasonal Chart

Kindred Biosciences, Inc. (NASD:KIN) Seasonal Chart

iShares MSCI Japan ETF (NYSE:EWJ) Seasonal Chart

First Trust Intermediate Duration Preferred & Income Fund (NYSE:FPF) Seasonal Chart

SPDR Gold Shares (NYSE:GLD) Seasonal Chart

SPDR S&P Emerging Asia Pacific ETF (NYSE:GMF) Seasonal Chart

VanEck Vectors Israel ETF (AMEX:ISRA) Seasonal Chart

iShares Silver Trust (NYSE:SLV) Seasonal Chart

iShares Silver Bullion ETF (TSE:SVR-C.TO) Seasonal Chart

 

 

The Markets

Stocks closed mixed for a second day as ongoing coronavirus uncertainties weighed on investor sentiment.  The S&P 500 Index shed two-tenths of one percent, led by energy and financials.  The large-cap benchmark remains supported around its rising 20-day moving average, a variable hurdle that was tested at the lows of the session.  Intermediate downside risks remain to the 50-day moving average at 3555.  Despite the weakness to start this typically upbeat timeframe surrounding the Christmas holiday, an upside bias towards 3800 remains intact, representing the target of the breakout from the 300-point trading range between 3200 and 3500.  The period following the notorious Santa Claus rally is when we can entertain some of the concerns that are emerging in the market, but, for now, there is no reason to deviate from the plan.

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

• Continuing our look at what to expect in the year ahead
• The first opportunity to sell the peak
• Two areas of the market poised to benefit next year
• Existing Home Sales in the US and the beneficiary of the fundamental backdrop
• Investor complacency

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On the economic front, a report on existing home sales in the US was released during Tuesday’s session.  The headline print of November’s report indicates that activity fell by 2.5% last month to a seasonally adjusted annualized rate of 6.69 million.  Analysts were expecting a decline of 1.9% to 6.72 million.  The year-over-year change sits higher by 25.8%.  Stripping out the seasonal adjustments, existing home sales actually fell by 14.1% in November versus the month prior, which is weaker than the 9.8% decline that is average for this time of year.  The year-to-date change is now higher by 13.4%, which is the second best performance through this point in the year that we have on record.  The average change through the end of November is -3.0%.  We sent out further insight to subscribers intraday.  Subscribe now.

Sentiment on Tuesday, as gauged by the put-call ratio, ended overly bullish at 0.60. 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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