Adjusting For Earnings: Stock Market Outlook Midday Analysis for Tue Oct 19 2021

I had expected a little bit more of a dip this morning but instead the SPX opened higher, dipped to the 4505 level and then continued higher. Earnings coming in this morning were better than estimates and investors continued to put capital back to work as they adjust what was a bearish outlook for earnings to bullish.

So for the moment the “risk-on” trade is still with the bulls.

New York Stats:

Volume is still a little light at just 1.7 billion shares traded on New York which is the same as yesterday at this time.

However today at lunch hour 58% of all shares being traded are to the upside and 56% of all stocks are climbing with 34% declining. The bulls are having a good day.

New highs are up to 106 just slightly less than yesterday but new lows are just 21 half of what we saw yesterday at this time, which is a bullish signal for further upside.

NASDAQ Stats:

Volume is better again on the NASDAQ at 2.5 billion shares as of 12:40.

New highs have finally jumped ahead of new lows with 84 new highs and 71 new lows. This is better than yesterday.

However volume to the upside is not as strong as yesterday with 53% to the upside and 45% to the downside. For stocks though 56% are advancing with 33% declining so while volume to the upside is not as strong as yesterday, far more stocks are advancing through the lunch hour than yesterday.

Outlook:

Earnings surprised most analysts and investors are back buying. More volume is being traded to the upside, pushing stock indexes closer to their all-time highs. We could see selling pick up mid to late afternoon but another positive close is expected. The move above 4500 for the SPX and another close above 15,000 for the NASDAQ will draw in more buyers. I am continuing to apply more capital and margin to my trades. I expect the indexes should reach their prior highs this week.

TSX Composite Index – Canadian Stock Market Outlook

For those who follow the smaller Canadian Market, the TSX made a new 52 week high yesterday and another new high again today. The index is up 88 points into the lunch hour

60% of volume is to the upside with 32% to the downside which is stronger than yesterday for the bulls.

Advancing stocks are well ahead of decliners with 53% of all stocks advancing while 31% are declining. There are 95 new highs and 31 new lows into the lunch hour which is bullish.

Bank stocks continue to make new highs but the rally is broadening out with energy, real estate and mining stocks joining and many making new highs.

I have placed more capital into a number of trades this morning on the TSX Composite Index.

Overall the index looks steady again as it prepares to take on 21,100. Outlook at present remains bullish.

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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.

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