Equity Clock: Seasonality Analysis October 15, 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 (www.equityclock.com) 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 www.timingthemarket.ca. 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: www.eresearch.ca. 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 www.eresearch.ca
Stock Market Outlook for Thursday, October 15, 2015 HEADLINE: Despite Walmart s pessimistic guidance, all may not be lost within the retail sector. The Markets Stocks dipped on Wednesday following a weak profit forecast from Walmart, which acted as a significant weight on the Dow Jones Industrial Average. Shares of Walmart plunged just over 10%, charting a new 52-week low. Resistance remains firmly intact around the declining 50-day moving average. Seasonally, shares of Walmart typically perform well into the end of the year, benefitting from strength in consumer spending around the holiday season; October and November have recorded gains 75% and 70% of the time, respectively, over the past 20 years. Clearly, this is a case where the technicals are not aligning with the seasonal tendencies. The negative outlook from this dominant player in the retail industry presents a concerning precedent going into the period of seasonal strength for consumer related stocks ahead. eresearch Corporation ~ 2 ~ www.eresearch.ca
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While Walmart set a negative tone, a report on Retail Sales for September failed to improve investor attitudes towards this segment of the market. The headline print indicated that sales rose by 0.1% last month, in line with the consensus estimate. Stripping out seasonal adjustments, total retail trade declined by 5.8%, which is slightly better than the average change for September of 7.0%. The year-to-date change in retail sales remains in line with the average, setting up well for the end of year increase in sales activity. Looking at the components, retail trade excluding autos continues to run above average through the first nine months of the year, fuelled by strength in Miscellaneous, General Merchandise, and Clothing/Apparel stores. Sales at Gasoline stations continue to be a drag, for obvious reasons. Overall, this middle-ground report continues to buck the trend of lagging activity that has been evident in other areas of the economy, such as manufacturing. Should retail activity remain on course, gains between October and December would be expected as consumers gear up for the holiday season. Retail sales gain an average of 3.3%, 1.7%, and 17.4%, respectively, over the next three months, peaking following the conclusion of the Christmas spending season. eresearch Corporation ~ 4 ~ www.eresearch.ca
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While the news pertaining to the retail industry on Wednesday was notable, the plunge in the US Dollar was influential, driving energy and material stocks higher on the day. The US Dollar Index is nearing support around 93, representing the lower limit of a descending triangle pattern. This bearish setup would be confirmed by a move below support at 93, calculating a decline to around 86, or around 8% below present levels. The resulting moves in commodity prices have been significant with a number of materials recording double-digit percent increases since recent lows charted in August. While energy stocks generally remain out of favour through the end of the year, material stocks tend to come into favour around the month of October, gaining through the end of the year. The S&P 500 Materials Sector Index recently moved above resistance presented by its declining 20-day moving average and is now hovering below previous support around 290. As with other sectors, the 200-day moving average continues to roll over, presenting concerns to the longer-term trend of the cyclically sensitive market segment. eresearch Corporation ~ 10 ~ www.eresearch.ca
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Put-Call Ratio Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.96. eresearch Corporation ~ 13 ~ www.eresearch.ca
Seasonal Charts A. Sectors and Industries Entering Period of Seasonal Strength Today None. B. Stocks Entering Period of Seasonal Strength Today The Cheesecake Factory Incorporated (NASDAQ:CAKE) Seasonal Chart C. Seasonal Charts of Companies Reporting Earnings Today eresearch Corporation ~ 14 ~ www.eresearch.ca
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S&P 500 Index eresearch Corporation ~ 25 ~ www.eresearch.ca
TSE Composite eresearch Corporation ~ 26 ~ www.eresearch.ca
Special Free Services Available through www.equityclock.com 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 http://www.equityclock.com/charts/ ########## 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:www.equityclock.com ############ eresearch Corporation ~ 27 ~ www.eresearch.ca