Big Picture

Our overall Primary Trend Indicator remains Neutral

Technical Analysis:  N.A indexes reclaimed key short term technical levels, 20 day and 50 day moving averages.  Hourly charts showing overbought RSI and Sentiment indicators which may prompt some back and filling (profit taking).  Longer term structure is positive with major N.A indexes holding 100 day moving averages and 20 week moving average.  Financial, Energy and Materials sectors are outperforming versus the S&P500.

Fundamentals:  Q3 Earnings season is early and so far reports have come in at or above expectations.  Financial sector shows strong profit growth, as will materials and energy sector.  Industrial companies remain uncertain due to supply chain risks and technology sector shows some weakness due to rising interest rates and extended valuations.

Web Scraping:  

  • Key data and news flow is increasing as earnings season ramps up and companies report
  • Macro economic and political news flow is also increasing


  • On Balance Volume - positive on daily measures but remains negative on weekly measures
  • Advance/Decline line indicators - neutral from negative 

Comparison Analysis:  

  • Outperforming  - Energy, Financials, Technology and Consumer Discretionary
  • Underperforming - Healthcare, Consumer Staples, Utilities, Telecommunications


  • COVID Passports
  • Corporate Earnings
  • Supply Chain Issues

Changing Fundamentals


China - Gross Domestic Product (YoY Q3) estimated +5.2% versus 7.9% Q2 reading

China - Retail Sales (YoY Sept) estimated +3.3% versus 2.5% for August

Earnings - Steel Dynamics, Phillips Intl, Zion's BankCorp.


US - Building Permits  (MoM Sept) estimated at 1.688M units versus 1.786M units last reading

Earnings - Johnson&Johnson, Proctor&Gamble, Halliburton, Ericsson, Synchrony Financial, Bank of New York Mellon, Netflix, United Airlines, CN Rail, Interactive Brokers


No Major Economic News

Earnings - Verizon, Winnebago, Abbott Labs, BioGen, Canadian Pacific Rail, NasDaq, CSX Corp, Tesla Inc, Las Vegas Sands, Discover Financial


No Major Economic News 

Earnings - Freeport McMoran, Snap Inc, Ally Financial, AT&T, Crocs, American Airlines, Intel Corp, Chipotle, Samuel Adams Brewing, Olin Corp, Mattel, Whirpool, Valero, The BlackStone Group


Various Global PMI Readings

Earnings - Cleveland Cliffs Resources, American Express, Schlumberger, HoneyWell, Seagate Technologies

Focus List

This past week stock markets kicked off earnings season with a bang and the right stocks to buy where financials.  Major banks and brokerages showed strong profits helped form rising bond yields and inflation.  Asset management and trading divisions also benefited from higher transaction volumes and net new asset growth.  The upcoming week will show more results from financials and we expect to see outperformance in the sector to continue.  Alcoa Corp also reported and showed excellent growth with the company re starting quarterly dividend payments and increasing its share buyback program.  Alcoa’s report should bode well for the industrial and materials sectors.

Heading into the new trading week stock markets look to continue the recovery it started last week.  The S&P500’s price action has shown a bullish reversal after weeks of declines that added up to a nearly 5% decline since September 1.  With 80% of companies still yet to report we believe stocks are setup for a move higher into the end of 2021.  Big tech stocks like IBM, Netflix, Snap and Intel will report results through the week.  IBM and Netflix show good potential for beating estimates and raising guidance.  IBM has reported significant growth in cloud and AI and will divest its services business into a spinoff unit. This should be taken positively from analysts and we expect target prices to be increased for IBM.

Seasonality also favours the bulls as the timeframe between November to January historically yields the best 3 months returns of any calendar year for stock markets.  The comparison analysis chart below highlights some names we have been bullish on and continue to show bullish.  Investors can see by comparing these stocks to the returns of the S&P500 that financials, energy, materials and information technology are outperforming.

Earnings season stocks to buy