Technical Seasonalities

Transcription

1 Equity Clock: Seasonality Analysis November 19, 2015 Technical Seasonalities eresearch Corporation is pleased to provide technical opinions on the market from a seasonality standpoint, courtesy of Equity Clock, a division of the Tech Talk Financial Network. eresearch also posts, daily, the regular technical opinions provided by affiliate: Tech Talk: TimingTheMarket. Equity Clock ( is a market analysis company that provides, completely FREE, technical, fundamental and seasonality analysis on a daily basis via TimingTheMarkets.com and EquityClock.com. Equity Clock s mission is to identify periods of re-occurring strength among individual equities in the market using methodologies presented by some of the top analysts in the industry, including those of Donald Vialoux, author of TimingTheMarkets.com. Donald Vialoux, co-founder of Tech Talk, is a past president and director of the Canadian Society of Technical Analysts (CSTA). He holds the designation of Chartered Market Technician (CMT). Mr. Vialoux has 45 years of experience in the investment industry, including prominent positions held at Richardson Greenshields and RBC Investments. He is the author of a daily letter on equity markets, which is available free at Mr. Vialoux is also the author of a weekly column published at GlobeAndMail.com that combines technical, fundamental, and seasonality analysis. He is a frequent presenter on Business News Network (BNN) Television. eresearch was established in 2000 as Canada's first equity issuer-sponsored research organization. As a primary source for professional investment research, our Subscribers (subscription is free!!!) benefit by having written research on a variety of small- and mid-cap, under-covered companies. We also provide unsponsored research reports on middle and larger-sized companies, using a combination of fundamental and technical analysis. We complement our corporate research coverage with a diversified selection of informative, insightful, and thought-provoking research publications from a wide variety of investment professionals. We provide our professional investment research and analysis directly to our extensive subscriber network of discerning investors, and electronically through our website: Bob Weir, CFA: Director of Research Note: All of the comments, views, opinions, suggestions, recommendations, etc., contained in the TechTalk/Timing The Market articles, reports, files, documents, essays, etc., and which are distributed by eresearch Corporation, are strictly those of TechTalk/Timing The Market and do not necessarily reflect those of eresearch Corporation. eresearch Corporation 78 Cameron Crescent, Suite 202 Toronto, Ontario M4G 2A3

2 Stock Market Outlook for Thursday, November 19, 2015 HEADLINE: Housing starts plunge 18% in October, but the housing units completed suggest the industry is in line with historic norms. The Markets Stocks rallied on Wednesday following the release of the latest FOMC minutes, which indicated a number of individuals believed conditions would be favourable for a December rate hike. The S&P 500 Index broke back above its 200-day moving average as momentum indicators look positive once again. The benchmark appears poised for another run at the all-time highs around eresearch Corporation ~ 2 ~

3 Financials led the move higher as investors perceive the looming rate hike as being positive for net interest margins. The SPDR KBW Bank Index ETF (KBE) surged by 1.66%, remaining on a path of outperformance versus the market that was initiated following the Fed meeting itself. eresearch Corporation ~ 3 ~

4 Seasonally, the strength in the US banking sector is triggering exactly on queue. The industry seasonally gains between November 22nd through to June 4th, on average, although the varying exposure of the different companies can result in a later start or earlier finish. Financial institutions that are more focussed on lending, such as the banks, would be expected to benefit in a rising rate environment, while financials that are more focussed on borrowing, such as REITs, would be expected to suffer. Resistance for the KBW Bank ETF (KBE) is apparent around $37. eresearch Corporation ~ 4 ~

5 While REITs lagged the broad market move on Wednesday, home construction stocks outperformed as investors were seemingly undeterred by the latest housing starts report. The headline print showed that starts declined to a seasonally adjusted annual rate of million, down from the previously revised million. The consensus estimate for starts was million. Stripping out seasonal adjustments, starts were actually down by 18%, a significant shift when compared to the 2.3% average gain for October, based on data from the past 50 years. The year-to-date trend of starts is back below the average trend, a position it held prior to the upbeat September report. Looking at the regions, a significant plunge in the South and the West appears culprit for the weakness in the overall report; starts were down 26.5% and 25.3%, respectively, well below average. Only the North-east region is showing a year-to-date change that is above average through the end of October, however, the region is of little influence given its small size relative to the others. eresearch Corporation ~ 5 ~

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8 Meanwhile, housing units completed remains in line with the average trend, suggesting a steady supply coming to market that the housing starts figure doesn t necessarily represent. Units authorized but not started remains well above average, meaning builders could ramp up starts at any time in response to greater demand. Reports on existing and new home sales will be provided next week, offering a glimpse into the demand side of the equation. Home building stocks seasonally gain between now and mid-february, on average. eresearch Corporation ~ 8 ~

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11 In other news, oil inventories continued to rise in the latest week, this time by a meagre 300,000 barrels. The days of supply of oil ticked lower by almost half of a day to 30.8, continuing to show signs of peaking now that the holiday season is nearing. The price of WTI Crude ended relatively flat on the day, remaining above support presented by the August low at $ On the flip-side, gasoline days of supply ticked higher to 23.2 following a 1 million barrel build in inventories. The price of gasoline is attempting to maintain support at the 2015 low of $1.23. eresearch Corporation ~ 11 ~

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14 Put-Call Ratio Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at <continued> eresearch Corporation ~ 14 ~

15 Seasonal Charts A. Sectors and Industries Entering Period of Seasonal Strength Today MATERIALS Relative to the S&P 500 eresearch Corporation ~ 15 ~

16 B. Stocks Entering Period of Seasonal Strength Today Norbord Inc (TSE:NBD) Seasonal Chart Guess?, Inc. (NYSE:GES) Seasonal Chart C. Seasonal Charts of Companies Reporting Earnings Today eresearch Corporation ~ 16 ~

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25 S&P 500 Index eresearch Corporation ~ 25 ~

26 TSE Composite eresearch Corporation ~ 26 ~

27 Special Free Services Available through Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices. Notice that most of the seasonality charts have been updated recently. To login, simply go to ########## BW: Information on Equity Clock is provided below. Equity Clock Equity Clock is a division of the Tech Talk Financial Network, a market analysis company that provides technical, fundamental, and seasonality analysis on a daily basis via TimingTheMarkets.com and EquityClock.com. Equity Clock s mission is to identify periods of reoccurring strength among individual equities in the market using methodologies presented by some of the top analysts in the industry, including that of Don Vialoux, author of TimingTheMarkets.com. Feel free to use any of the content or seasonality studies (charts, timelines, or otherwise) presented as long as a link-back to this site at EquityClock.com is provided. For further information on indicators used in reports presented on this site, please visit our reference page. Equity Clock Website: ############ eresearch Corporation ~ 27 ~