Stock Market Outlook for October 26, 2026
Deep dive into the Canadian equity market as hints of a topping pattern emerging.
*** 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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Innovator IBD Breakout Opportunities ETF (AMEX:BOUT) Seasonal Chart
Tradeweb Markets Inc. (NASD:TW) Seasonal Chart
United Therapeutics Corp. (NASD:UTHR) Seasonal Chart
EMCOR Group, Inc. (NYSE:EME) Seasonal Chart
Akamai Technologies, Inc. (NASD:AKAM) Seasonal Chart
iShares U.S. Regional Banks ETF (NYSE:IAT) Seasonal Chart
Big Pharma Split Corp (TSE:PRM.TO) Seasonal Chart
Hormel Foods Corp. (NYSE:HRL) Seasonal Chart
Toro Co. (NYSE:TTC) Seasonal Chart
Semtech Corp. (NASD:SMTC) Seasonal Chart
Agilent Technologies, Inc. (NYSE:A) Seasonal Chart
Old Dominion Freight Line, Inc. (NASD:ODFL) Seasonal Chart
Marvell Technology Inc (NASD:MRVL) Seasonal Chart
Disclaimer: Comments and opinions offered in this report are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered is believed to be accurate, but is not guaranteed.
The Markets
Traders were rotating again on Friday, taking profits out of various defensive bets that have jumped in recent days (eg. Staples, Health Care, Utilities) and nibbling at beaten down Technology shares following the abrupt and aggressive unwind of the consensus bet in the market. The S&P 500 Index slipped by 0.52%, continuing to knock on the door of the lower limit of the range that the benchmark has been in since August between 7620 and 7800. A head-and-shoulders pattern on the hourly chart can be picked out with the lower limit of the aforementioned span acting as the neckline. A breakdown would propose a downside target of 7400, or back to the July lows. The sloppiness of the tape in recent days and the concerns that the credit market is showing suggest that the probability of a breakdown is high. A week ago, the index broke below short-term rising trend channel support, turning off the path of higher-highs and higher-lows that had carried the benchmark in the past month. 20 and 50-day moving averages are being lost as support and the 100-day moving average is the last line of defense before a more substantial correction is achieved. Weakening support raises concerns for the health of stocks moving forward. The market has reached the time of year when volatility starts to peak and roll over through the last couple of months of the year, thereby promoting strength in stocks, but the breakout in the VIX a week ago above declining trendline resistance provides a sign that the instability that is leaching into the market may just be getting started. As noted in this week’s chart books, there are segments following recent price action that we no longer want to be exposed to, but the market has provided rotation opportunities that allow us to maintain our overall equity exposure. Members can stay on top of our thinking and what we are watching in our regular reports, as well as view what we are targeting in our list of market segments to either Accumulate or Avoid
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark
- Canadian stocks battling resistance and looking at the technicals of the various Canadian sectors
- Dollar dynamics
- Additional Thoughts (Canadian Retail Sales)
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for October 26
Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.93.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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