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Stock Market Outlook for January 19, 2021


Buying pressures in the market have waned as investors react to fading economic strength.

 

Real Time Economic Calendar provided by Investing.com.

 

 

*** 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:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

ProShares Ultra Consumer Services (NYSE:UCC) Seasonal Chart

CNX Resources Corp. (NYSE:CNX) Seasonal Chart

PG&E Corp. (NYSE:PCG) Seasonal Chart

Canadian Pacific Railway (NYSE:CP) Seasonal Chart

BP Amoco PLC (NYSE:BP) Seasonal Chart

PVH Corp. (NYSE:PVH) Seasonal Chart

MercadoLibre Inc. (NASD:MELI) Seasonal Chart

Rocky Mountain Chocolate Factory, Inc. (NASD:RMCF) Seasonal Chart

Dunkin’ Brands Group, Inc. (NASD:DNKN) Seasonal Chart

New Flyer Industries Inc. (TSE:NFI.TO) Seasonal Chart

Invesco Global Listed Private Equity ETF (NYSE:PSP) Seasonal Chart

FMC Technologies, Inc. (NYSE:FTI) Seasonal Chart

Conn’s, Inc. (NASD:CONN) Seasonal Chart

Absolute Software Corp. (NASD:ABST) Seasonal Chart

Deutsche X-trackers Harvest CSI 500 China-A Shares Small Cap ETF (AMEX:ASHS) Seasonal Chart

Colgate-Palmolive Co. (NYSE:CL) Seasonal Chart

Hasbro, Inc. (NASD:HAS) Seasonal Chart

BJ’s Restaurants Inc. (NASD:BJRI) Seasonal Chart

Paycom Software, Inc. (NYSE:PAYC) Seasonal Chart

Canadian Tire Corp., Ltd. (TSE:CTC.TO) Seasonal Chart

First Trust US IPO Index Fund (NYSE:FPX) Seasonal Chart

Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) Seasonal Chart

 

 

The Markets

Stocks closed down to end the week as investors reacted to a mixed set of data-points on the economy, as well as earnings from some of the big banks.  The S&P 500 Index closed down by just over seven-tenths of one percent, moving back below our forecasted target of 3800.  At the low of the session, the benchmark tested levels around its rising 20-day moving average, a hurdle that has provided support to the short-term trend for the past couple of months.  Intermediate downside risks remain to the rising 50-day moving average at 3667.  Momentum indicators continue to roll over with MACD triggering a fresh sell signal.  While the bearish crossover on its own is not significant enough to act on, the fact that it is occurring at a lower level than the sell signal that preceded it in December does highlight the waning buying pressures in the market, typically a precursor to a market pullback.

Today, in our Market Outlook to subscribers, we discuss the following:

  • Weekly look at the S&P 500 Index and how to position
  • US Dollar
  • US Retail Sales and opportunities in the report
  • US Industrial Production
  • Manufacturer sentiment
  • Citigroup Economic Surprise Index

Subscribe now and we’ll send this outlook to you.

On the economic front, a report on retail sales in the US was released before Friday’s opening bell.  The headline stated that retail trade dropped by 0.7% last month, which was significantly weaker than the 0.1% decline that was expected by analysts.  Less gas and autos, the decline was even more disappointing, falling by 2.1% versus the month prior, a miss compared to the consensus analyst estimate that called for a decline of 0.3%.  Stripping out the adjustments, retail sales actually rose by 14.8% in December, which is weaker than the 15.8% rise that is average for the last month of the year.  For the year overall, retail sales were higher by 8.0%, which is more than double the 3.3% increase that is average for the calendar year. This is the third best calendar year performance that we have on record.  We sent out further insight to subscribers, including where the opportunities are.  Subscribe now.

Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.80.  In recent days/weeks, the ratio has been flirting with levels that suggest complacency.  This makes stocks vulnerable to a shock event, should one be realized.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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