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Stock Market Outlook for February 25, 2019


Dow Jones Industrial Average closes higher for ninth consecutive week, longest run since 1995.

 

Real Time Economic Calendar provided by Investing.com.

 

*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.   As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.

Stocks Entering Period of Seasonal Strength Today:

Broadwind Energy, Inc. (NASD:BWEN) Seasonal Chart

Broadwind Energy, Inc. (NASD:BWEN) Seasonal Chart

EnCana Corp. (TSE:ECA.TO) Seasonal Chart

EnCana Corp. (TSE:ECA.TO) Seasonal Chart

Ecolab, Inc. (NYSE:ECL) Seasonal Chart

Ecolab, Inc. (NYSE:ECL) Seasonal Chart

Optiva Inc. (TSE:OPT.TO) Seasonal Chart

Optiva Inc. (TSE:OPT.TO) Seasonal Chart

 

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The Markets

Stocks in the US posted solid gains on Friday following further trade optimism as the negotiations between China and the US progress.  The S&P 500 Index gained just over six-tenths of one percent, inching towards that widely scrutinized level of horizontal resistance at 2800.  Following the gains over the past week, the 50-day moving average has started to curl higher, suggesting a renewed rising intermediate trend.  The index is over 6% above this intermediate hurdle, which is stretched from an intermediate trend perspective.  A retracement back to this hurdle is becoming increasingly probable, which would refresh the momentum of the market.  The next dominant seasonal up-leg for the market occurs in March and April.

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For the week, the S&P 500 Index and Dow Jones Industrial average were higher by six-tenths of a percent, continuing to push beyond resistance at major moving averages around the 20 and 50-week.  For the Dow, the gain is the ninth consecutive positive weekly result, representing the longest stretch of weekly gains since May of 1995.  Back then, the benchmark kicked off one of the strongest multi-year bull market runs on record that we now know was attributed to the tech bubble of the late 1990’s.  In May of 1995, the blue-chip benchmark became significantly overbought on its weekly look according to a number of metrics, a condition that did not fade for nearly a year thereafter. As of present, weekly overbought signals are largely absent with the Relative Strength Index (RSI) hovering just above 50 and MACD moving back above 0 just this past week.  The trend in major weekly momentum indicators remains that of lower-lows and lower-highs following the overbought peak charted in January of 2018, suggesting that despite the recent string of strong returns, the bulls still have much to prove in order to conclude the end of the negative trend that dominated the fourth quarter.

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On the economic front, a report on retail sales in Canada was released before the opening bell.  Headlines suggest that the weight on December’s retail sales was the result of weak gasoline prices, but the non-adjusted data points to broader weakness amongst retail activity. Statscan reported that retail sales declined by 0.1% in the last month of 2018, missing the consensus analyst estimate that called for no change. Excluding gas stations, retail sales were indicated to have gained 0.4%, the largest increase since May. Stripping out the adjustments, retail sales were actually higher by 2.2% in December, which is nowhere near the 15.3% increase that is average for this holiday period. This is the weakest December increase on record looking at data going back 27 years. For the year, retail sales in Canada were down 0.6% versus the year prior, well below the 4.3% average calendar year increase and the weakest since 2012. Results, such as this, are akin to recessionary conditions as spending weakens amidst a tougher economic backdrop.  Subscribe now to receive further insight on the health of the consumer in Canada and investment implications pertaining to the broader retail industry.

Retail trade Seasonal Chart

Monthly Retail trade Data

Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.79.

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Seasonal charts of companies reporting earnings today:

American States Water Company (AWR) Seasonal Chart Armstrong World Industries Inc (AWI) Seasonal Chart Carrizo Oil & Gas, Inc. (CRZO) Seasonal Chart Carter's, Inc. (CRI) Seasonal Chart Douglas Dynamics, Inc. (PLOW) Seasonal Chart Endologix, Inc. (ELGX) Seasonal Chart Ferroglobe PLC (GSM) Seasonal Chart Hersha Hospitality Trust (HT) Seasonal Chart  John Bean Technologies Corporation (JBT) Seasonal Chart Key Energy Services, Inc. (KEG) Seasonal Chart Lydall, Inc. (LDL) Seasonal Chart McDermott International, Inc. (MDR) Seasonal Chart Mosaic Company (The) (MOS) Seasonal Chart Nautilus Group, Inc. (The) (NLS) Seasonal Chart ONEOK, Inc. (OKE) Seasonal Chart Range Resources Corporation (RRC) Seasonal Chart Rent-A-Center Inc. (RCII) Seasonal Chart  Sun Hydraulics Corporation (SNHY) Seasonal Chart Tenet Healthcare Corporation (THC) Seasonal Chart Tenneco Inc. (TEN) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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