Equity Clock

Stock Market Outlook for January 5, 2021

Gold miners ETF gapping above resistance at its declining 50-day moving average as positive seasonal tendencies take hold.

 

 

 

*** 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:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

TVA Group, Inc. (TSE:TVA-B.TO) Seasonal Chart

SL Green Realty Corp. (NYSE:SLG) Seasonal Chart

Bruker Corp. (NASD:BRKR) Seasonal Chart

Invesco Defensive Equity ETF (NYSE:DEF) Seasonal Chart

First Trust Consumer Discretionary AlphaDEX Fund (NYSE:FXD) Seasonal Chart

 

 

The Markets

Stocks sold off on Monday as investors monitor the slow release on the COVID vaccine and await the results of the runoff election for senate seats in Georgia.  The S&P 500 Index shed 1.48%, charting an outside reversal candlestick.  The technical pattern is derived by an open above the prior day’s high followed by a close below the prior days low.  The setup is typically indicative of buying exhaustion as the bulls show difficulty maintaining the strength at the session’s open, thereby relinquishing control to the bears.  This is something that is more typical around major market peaks, however, downside follow-through to Monday’s selloff is required to confirm.  Support at the rising 20-day moving average has been cracked, opening up the benchmark to short-term downside risks to the rising 50-day moving average.  Momentum indicators, including MACD and Stochastics, have been negatively diverging from price for the past couple of weeks, indicative of waning buying demand.

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

• Hourly look at the S&P 500 Index and the cue to become more defensive
• Silver and Gold
• US Construction Spending

Subscribe now and we’ll send this outlook to you.

Want to know which areas of the market to buy or sell?  Our Weekly Chart Books have just been updated, providing a clear Accumulate, Avoid, or Neutral rating for currencies, cryptocurrencies, commodities, broad markets, and subsectors/industries of the market.  Subscribers can login and click on the relevant links to access.

• Currencies
• Cryptocurrencies
• Commodities
• Major Benchmarks
• Sub-sectors / Industries

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On the economic front, a report on construction spending in the US was released during Monday’s session.  The headline print of November’s report indicates that activity increased by 0.9% for the month, which was marginally weaker than the consensus estimate that called for a 1.0% rise.  The year-over-year change now sits at +3.8%.  Stripping out the seasonal adjustments, construction spending in the US actually declined by 4.2% in November, which is much stronger than the 7.1% decline that is average for this time of year.  The year-to-date change is higher by 16.1%, which is stronger than the seasonal norm that calls for an increase of 14.3%.  We sent out further insight to subscribers intraday.  Subscribe now.

Just released…

We have just sent out our extensive monthly report for January covering what to expect and how to position for the month(s) ahead.

Highlights in this report include:

• Equity market tendencies in the month of January
• Weakest November print for retail sales since the recession
• Tracking the spread of the coronavirus
• Uptick in jobless claims
• The uptick in volatility at the start of the new year
• Upbeat manufacturing sentiment
• Gold
• Global Markets
• Emerging markets
• US Dollar
• The impact of the election cycle on the equity market in the year ahead
• 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 January
• Plus, forecasts and expectations through the months ahead and for the year overall.

Subscribe now and we’ll send you this 98-page report.

Sentiment on Monday, as gauged by the put-call ratio, ended bullish at 0.86.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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