Stock Market Outlook for October 31, 2024
Credit balances in margin accounts, indicative of short positions, showed the second strongest September increase on record, a monthly surge that typically bodes well for stocks.
*** 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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Atrium Mortgage Investment Corp. (TSE:AI.TO) Seasonal Chart
iShares Asia 50 ETF (NASD:AIA) Seasonal Chart
Invesco Dynamic Pharmaceuticals ETF (NYSE:PJP) Seasonal Chart
GDS Holdings Ltd. (NASD:GDS) Seasonal Chart
Mega Uranium Ltd. (TSE:MGA.TO) Seasonal Chart
BMO Europe High Dividend Covered Call ETF (TSE:ZWP.TO) Seasonal Chart
Omeros Corp. (NASD:OMER) Seasonal Chart
Hecla Mining Co. (NYSE:HL) Seasonal Chart
First Majestic Silver Corp. (TSE:FR.TO) Seasonal Chart
Molina Healthcare, Inc. (NYSE:MOH) Seasonal Chart
Century Aluminum Co. (NASD:CENX) Seasonal Chart
Alamo Group, Inc. (NYSE:ALG) Seasonal Chart
AMN Healthcare Services, Inc. (NYSE:AMN) Seasonal Chart
Whirlpool Corp. (NYSE:WHR) Seasonal Chart
ClearOne Communications Inc. (NASD:CLRO) Seasonal Chart
The Markets
Stocks closed generally lower on Wednesday as weakness in the Technology sector weighed on the broad market performance. The S&P 500 Index ended down by a third of one percent, remaining pinned to short term support at the rising 20-day moving average (5804). Over the past couple of weeks, the benchmark has shown a cap at 5870, resulting in an ultra-short-term topping pattern that projects a downside target of 5745. The narrowing range from the trading action over the past 9 sessions has been broken to the downside, increasing the likelihood that a test of the target that the topping pattern suggests will be achieved. Despite the recent stall, this market is showing greater evidence of support than resistance over an intermediate-term timeframe, presenting characteristics of a bullish trend. What is concerning to the prevailing path is the waning of upside momentum, something that we have seen more evidence of with another MACD sell signal in recent days; the momentum indicator has shown a negative divergence versus price through the current calendar year, highlighting the fading enthusiasm towards the risk profile that equities encompass. The risk-reward, broadly, remains unattractive. We continue to like the groups that are on our list of Accumulate candidates, but there are certainly segments of the market to Avoid. With the start of the best six months of the year for stocks slated to get underway, there is a need from a seasonal perspective to ramp up risk exposure at some point.
Today, in our Market Outlook to subscribers, we discuss the following:
- Margin account statistics for September
- Seasonal strength in Refining stocks
- The supply and demand dynamics surrounding gasoline
- The seasonality for Crack Spreads
- US International Trade in Goods and the largest percentage increase in imports since 2005
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Sentiment on Wednesday, as gauged by the put-call ratio, ended slightly bullish at 0.91.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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