by Don Vialoux, EquityClock.com
Mr. Vialoux is appearing on BNN’s Market Call tonight at 6:00 PM EDT this evening
Pre-opening Comments for Wednesday October 1st
U.S. equity index futures were lower this morning. S&P 500 futures fell 6 points in pre-opening trade.
Index futures were virtually unchanged following release of the September ADP employment report. Consensus was an increase to 209,000 versus 202,000 in August. Actual was 213,000
Cisco added $0.06 to $25.23 after Atlantic Equities initiated coverage with an Overweight rating. Target price is $31.
eBay fell $1.44 to $55.19 after Jefferies, JP Morgan, Wedbush and JMP Securities downgraded the stock.
Freeport McMoran Copper & Gold added $0.15 to $32.80 after Brean Capital initiated coverage with a Buy rating. Target is $39.
Johnson & Johnson slipped $0.93 to $105.66 after Bernstein downgraded the stock to Market Perform
EquityClock.com’s Daily Market Comment
Following is a link:
http://www.equityclock.com/2014/09/30/stock-market-outlook-for-october-1-2014/
Interesting report from MarketWatch.com
Headline reads ”Will the Halloween indicator keep a bear market at bay”? Following is a link:
Addition to the Monitored List
Seasonal influences and technical parameters for natural gas have turned positive. See comments in Tuesday’s Tech Talk for background. Add UNG at $22.11 to the Monitored List.
http://www.timingthemarket.ca/techtalk/2014/09/30/tech-talk-for-tuesday-september-30th-2014/
Interesting Charts
Strength in the U.S. Dollar continues to influence equity markets around the world.
Strength in the U.S. Dollar is prompting international U.S. based companies to issue lower third quarter revenue and earnings guidance. Ford is the “poster child”. Look for more companies to lower guidance during the earnings warning season prior to release of third quarter results.
Seasonality in the month of October
The month of October is known as a month of transition. It is famous for higher than average volatility. October 1929 and October 1987 come to mind. However, it also is known as the month when equity markets reach a seasonal low where buying opportunities appear. Indeed, on average, the best time to buy the U.S. equity market during the four year U.S. Presidential Cycle is the second week in October during a mid-term election year. The trigger for extra strength by the end of October this year could be anticipation of a change in control in the U.S. Senate from Democrats to Republicans during mid-term elections on November 4th. Perception is that Republicans will support a greater economic growth strategy (similar to Republican support to President Clinton’s agenda during 1999 and 2000).
Performance in October by broadly based equity indices tends to be average. During the past 10 years, the Dow Jones Industrial Average has gained an average of 0.4% per year, the S&P 500 Index increased 0.3%, the NASDAQ Composite Index gained 1.3%, the Russell 2000 Index improved 0.5%, the London FT Index added 0.8%, the TSX Composite Index eased 0.2% and the Nikkei 225 Index lost 1.8%.
Best performing sectors tend to be economic sensitive sectors: Information Technology has been the best performing sector during the past 21 years followed by Consumer Staples and Consumer Discretionary. Weakest sector is Utilities
Best performing sub-sectors are Agriculture, Railroads and Software & Services. Worst performing sectors are Silver, Gold and Metals & Mining.
StockTwits Yesterday
Technical action by S&P 500 stocks to 10:45 AM: Bearish. One stock broke resistance ($DUK). Five stocks broke support: $GM, $LUK, $UHS, $MYL, $ATI
Technical Action by Individual Equities
By the close, five stocks broke resistance and nine stocks broke support. Notable weakness occurred in the energy sector where MRO and EOG broke support.
No TSX 60 stocks broke support or resistance.
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. To login, simply go to http://www.equityclock.com/charts/
Following is an example:
^SOX Relative to the S&P 500 |
Monitored Technical/Seasonal Trade Ideas
A security must have a Technical Score of 1.5 – 3.0 to be on this list.
Green: Increased Technical Score
Red: Reduced Technical Score
Disclaimer: Comments, charts and opinions offered in this report by www.timingthemarket.ca and www.equityclock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed. Don and Jon Vialoux are Research Analysts with Horizons ETFs Management (Canada) Inc. All of the views expressed herein are the personal views of the authors and are not necessarily the views of Horizons ETFs Management (Canada) Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by Horizons ETFs Management (Canada) Inc.
Individual equities mentioned in StockTwits are not held personally or in HAC.
Horizons Seasonal Rotation ETF HAC September 30th 2014
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