Stock Market Outlook for October 5, 2021
Technology stocks are acting as a drag, but this is far from a weak market.
*** 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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S&P Global Inc. (NYSE:SPGI) Seasonal Chart
WSP Global Inc. (TSE:WSP.TO) Seasonal Chart
Nova Measuring Instruments Ltd. (NASD:NVMI) Seasonal Chart
K-Bro Linen Inc. (TSE:KBL.TO) Seasonal Chart
Vecima Networks Inc. (TSE:VCM.TO) Seasonal Chart
Rocky Brands Inc. (NASD:RCKY) Seasonal Chart
Raytheon Technologies Corp. (NYSE:RTX) Seasonal Chart
SPDR Dow Jones Industrial Average ETF (NYSE:DIA) Seasonal Chart
The Markets
Stocks sold off on Monday as investors dumped technology stocks in favour of core cyclical bets in the energy, materials, and industrial sectors. The S&P 500 Index shed 1.30%, giving back Friday’s gain and trading back below the 100-day moving average. The 150-day moving average at 4249 is presently the test. The significant back and forth swings in the past few days suggests investor indecision around this longer-term hurdle as the bulls and bears battle for control. The market internals, however, lend themselves to the argument of rotation as investors target some of the core-cyclical bets that had been abandoned through the summer. The downside risk in this market is still seen to around 4250, representing the level of resistance realized through May and June, as well as the level of support that was tested in July.
Today, in our Market Outlook to subscribers, we discuss the following:
- The selloff in the technology sector and our bias for exposure this fall
- US Factory Orders
- Notable upgrades and downgrades in this week’s chart books: Find out what has been upgraded to Accumulate this week
- Canada GDP: What is driving activity and how to play it
- The Canadian Dollar
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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.
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Sentiment on Monday, as gauged by the put-call ratio, ended close to neutral at 0.97.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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