eResearch Corporation 78 Cameron Crescent, Suite 202 Toronto, Ontario M4G 2A3 www.eresearch.ca 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. Equity Clock: Seasonality Analysis October 27, 2015
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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.
Equity Clock: Seasonality Analysis October 27, 2015
Stock Market Outlook for Tuesday, October 27, 2015
HEADLINE: The 50-year average low to the favourable six months of the year for equities is today.
The Markets
Stocks digested recent gains, closing near the flat-line at the end of Monday’s session. The S&P 500 Index ended lower by 0.19%, remaining above its 200-day moving average. With a busy week for earnings and a FOMC meeting announcement mid-week,
stocks will certainly have a number of catalysts to work off of, keeping investors on their toes as they watch the equity market reaction around theses highs.
On the economic front, a report on New Home Sales for September failed to provide an encouraging backdrop to the period of seasonal strength for homebuilding stocks, which begins around this time of year. The headline print showed that sales of new homes fell
to a seasonally adjusted annual rate of 468,000, well below the consensus estimate of 549,000. Stripping out seasonal adjustments, sales actually fell by 16.3%, almost twice the average decline for September of 8.8%, based on data over the past 50 years. The
year-to-date change is now up a mere 2.9% through the first three quarters, well below the average gain of 24.3%. Sales of completed new homes are down the most, showing a year-to-date contraction of 27%, versus the average gain of 9% through September.
Uncertainty pertaining to the future of mortgage rates may be acting as a drag; the rate of the 30-year fixed mortgage hit its high of the year this past summer, but has since declined marginally. The iShares US Home Construction ETF (ITB) traded lower by
just over half of one-percent, still remaining in an underperforming trend versus the market. Seasonally, the sector typically moves higher between mid-October and mid-February in anticipation of a strong spring buying period.
Meanwhile, we are just one day away from the average start to the period of seasonal strength for the broad market. However, investors should be mindful of the key word in that statement: average. Taking a look at the average performance of the S&P 500
Index over the past 50-years, the low point during the fourth quarter is clearly obvious on October 27th, leading to the positive trend that follows through to May 5th of the subsequent year.
The average, assuming a normal distribution, implies that during any given year the low point to the positive seasonal trend has an equal probability of occurring either before or after that date. Obviously, we know the seasonal start to this year’s trend was
at the start of October; the low points over the past four years have fallen on either side of the 50-year average low. So how many times over the past 50 years has October 27th acted as the low point to the market (S&P 500 Index) for the favourable
six months of the year? Two times, in 1997 and 2005.
In a market where entry and exit points, quite simply, determine the success of a trade, it is important for seasonal investors to always apply a simple technical overlay
to fine-tune when they get in and when they get out.
Average annual performance over the past 50 years:
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/
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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