Equity Clock

Stock Market Outlook for January 28, 2021

Instability in the market leads to a breakdown of the short-term rising trend for the S&P 500 Index.

 

 

 

*** 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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Estee Lauder Cos. (NYSE:EL) Seasonal Chart

Hasbro, Inc. (NASD:HAS) Seasonal Chart

Omeros Corp. (NASD:OMER) Seasonal Chart

Palatin Technologies, Inc. (AMEX:PTN) Seasonal Chart

Ericsson Telephone Co. (NASD:ERIC) Seasonal Chart

Tronox Holdings plc (NYSE:TROX) Seasonal Chart

Smith & Wesson Brands, Inc. (NASD:SWBI) Seasonal Chart

 

 

The Markets

Stocks dipped on Wednesday as a short-squeeze in various heavily shorted names destabilized the broader market.  The S&P 500 Index shed 2.57%, breaking support at its rising 20-day moving average.  The rising 50-day moving average at 3710 remains in a position of intermediate support.  The decline was enough to erase all of the gain that the benchmark had generated since the year began.  But while the move lower in stocks certainly appears threatening, the drawdown is inline with what we have been expecting for the period beyond the first week of the year through to the end of February.  Ideas proposed to subscribers to mitigate volatility over this timeframe are working as expected and we welcome this pullback as an opportunity to get re-exposed to those areas of the market that are expected to perform well into the spring.  If this volatility is catching you off-guard, consider subscribing to our service as our research has laid out what to expect through the first couple of months of the year and how to mitigate the weakness that is normal over this timeframe.  Subscribe now.

Soon to be released…

We are busy putting the finishing touches on our extensive monthly report for February. Find out which stocks see their optimal holding period start in the month ahead and which stocks see a high frequency of gains in this second month of the year.  This report will be sent out in the day ahead.

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Back on schedule for the Wednesday session, the Energy Information Administration (EIA) released petroleum inventory data for the week just past.  The EIA reported on Wednesday that oil inventories dropped by 9.9 million barrels last week, which is a divergence compared to the small injection of 430,000 barrels that was expected by analysts.  Gasoline stockpiles, meanwhile, increased by 2.5 million barrels.  The result saw the days of supply of oil drop by almost a full day to 32.6, while gasoline days of supply ticked higher by over half of a day to 32.0.  The average days of supply for each through this point in January is 22.3 and 27.1, respectively.  We sent out further insight to subscribers intraday.  Subscribe now to find out what all this means for you to invest in the commodity or the energy sector.

On the economic front, a report on durable goods orders in the US was released before Wednesday’s opening bell.  The headline print of December’s report indicated that new orders in the US increased by 0.2% last month, which was weaker than the consensus analyst estimate that called for an increase of 1.0%.  Core capital goods orders, meanwhile, rose by 0.6%, which was better than the 0.4% analyst forecast.  Stripping out the seasonal adjustments, the value of manufacturers’ new orders for durable goods industries actually increased by 8.8% in December, which is precisely inline with what is average for the last month of the year.  For the calendar-year, overall, durable goods orders expanded by 3.8%, which is stronger than the 2.2% increase that has been the norm over the past two decades.  This is the third best annual performance of the past decade.  We sent out further insight to subscribers intraday.  Subscribe now to find out how to take advantage of the fundamental trends.

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.73. 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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