Stock Market Outlook for December 19, 2023
A hammer candlestick around significant support for Oil is signalling the start of the period of seasonal strength in the commodity and the energy sector.
*** 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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Invesco S&P SmallCap Energy ETF (NASD:PSCE) Seasonal Chart
Vanguard FTSE Emerging Markets ETF (NYSE:VWO) Seasonal Chart
Morguard Corp. (TSE:MRC.TO) Seasonal Chart
INNOVATE Corp. (NYSE:VATE) Seasonal Chart
Nordstrom, Inc. (NYSE:JWN) Seasonal Chart
M&T Bank Corp. (NYSE:MTB) Seasonal Chart
Tucows Inc. (NASD:TCX) Seasonal Chart
Sandstorm Gold Ltd. (NYSE:SAND) Seasonal Chart
ProShares Ultra Oil And Gas (NYSE:DIG) Seasonal Chart
iShares MSCI Hong Kong ETF (NYSE:EWH) Seasonal Chart
The Markets
Stocks closed higher on Monday, extending their strength that had been derived by the expectation that the Fed is likely done raising rates. The S&P 500 Index closed with a gain of just less than half of one percent, continuing to push towards the record high and the next level of resistance around 4800. The Relative Strength Index (RSI) is now above 80, showing the most overbought reading since September of 2020, keeping the risk of a near-term pullback elevated given the buying exhaustion that could materialize under this backdrop. Seasonal tendencies push back against this contention with a positive bias of risk assets the norm through the remaining weeks of the year. All in all, this leaves our hands tied with the status quo, unwilling to add new equity exposure around this height, but certainly not contemplating selling either. The start of next year could see that change, but remaining fully invested across stocks and bonds through the weeks ahead remains prudent and we can look for our next cue to move in the portfolio after the end of year holidays. Levels of support below the large-cap benchmark remain plentiful and characteristics of a bullish trend over an intermediate term perspective persist.
Today, in our Market Outlook to subscribers, we discuss the following:
- Small-Caps and European equities testing significant resistance
- Hammer candlestick on the chart of Oil
- Our weekly chart books update, along with all segments of the market to either Accumulate or Avoid
- Election Year Tendencies for stocks, including the average performance during years when there is a split government
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- Currencies
- Cryptocurrencies
- Commodities
- Major Benchmarks
- Sub-sectors / Industries
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Sentiment on Monday, as gauged by the put-call ratio, ended neutral at 1.00.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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