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Stock Market Outlook for November 11, 2020


The rotation away from technology suggests that the consideration of alternate benchmarks is warranted.

 

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:

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Avery Dennison Corp. (NYSE:AVY) Seasonal Chart

Frontier Communications Corp. (NASD:FTR) Seasonal Chart

CGI Group, Inc. (TSE:GIB/A.TO) Seasonal Chart

Alaris Royalty Corp. (TSE:AD.TO) Seasonal Chart

Chimera Investment Corp. (NYSE:CIM) Seasonal Chart

Starwood Property Trust Inc. (NYSE:STWD) Seasonal Chart

Taiwan Semiconductor Mfg (NYSE:TSM) Seasonal Chart

EQT Midstream Partners, LP (NYSE:EQM) Seasonal Chart

JD.com, Inc. (NASD:JD) Seasonal Chart

SPDR Barclays Emerging Markets Local Bond ETF (NYSE:EBND) Seasonal Chart

iShares MSCI India ETF (AMEX:INDA) Seasonal Chart

 

 

The Markets

The rotation out of technology continues, placing a significant drag on major market benchmarks.  The S&P 500 Index ended lower by 0.14% on Tuesday, remaining close to all-time highs following the strength recorded in recent days.  Momentum indicators continue to point higher, however, there are early signs of rollover, particularly with respect to RSI and Stochastics.  Short and intermediate-term support can be pinned around 20 and 50-day moving averages, however, previous horizontal resistance that was cracked on Monday at 3550 remains the level to watch.  The benchmark essentially closed around this hurdle at Tuesday’s closing bell. The hurdle marks the upper limit to a horizontal trading range, which, was cracked in the previous session, however, without a significant close above the threshold, the breakout could still be at risk.  As alluded to in our previous report, the bias is still to the upside, but, given that the market is in a softer period, on average, between now and the days around the US Thanksgiving, we must be prepared for a curve ball as investors put previous uncertainties aside.  The more intermediate average tendency is for gains through the end of the year.

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On the economic front, a report on job openings and labor turnover was released during the Tuesday session.  The headline print indicated that job openings increased by 1.3% to 6.436 million in September, missing the consensus analyst estimate that called for a 2.5% increase to 6.508 million.  Just for context, as of September’s employment situation report, there were 12.6 million individuals that were declared unemployed, according to the Bureau of Labor Statistics, providing a ratio of unemployed to openings of close to 2 to 1.  Stripping out the seasonal adjustments, job openings actually increased by 1.8% in September, which is a positive divergence compared to the 1.9% decline that is average for this time of year.  The year-to-date change through the first three quarters of the year is higher by 10.6%, which is still almost half of the 20.9% increase that is average.  We sent out further insight to subscribers intraday.  Signup now to access this report.

 

Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.85.  As for institutional sentiment, as gauged by the Dark Index, the level ticked higher to 39.9%.  Despite the pronounced rise in stocks in recent days, the dark index has failed to get to levels indicative of buying demand above 45%.


 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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