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Stock Market Outlook for March 4, 2019


Once again, technical signals suggest a short-term peak is probable.

 

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:

PHH Corp. (NYSE:PHH) Seasonal Chart

PHH Corp. (NYSE:PHH) Seasonal Chart

Cincinnati Bell Inc. (NYSE:CBB) Seasonal Chart

Cincinnati Bell Inc. (NYSE:CBB) Seasonal Chart

Western Union Co. (NYSE:WU) Seasonal Chart

Western Union Co. (NYSE:WU) Seasonal Chart

Senior Housing Properties Trust (NASD:SNH) Seasonal Chart

Senior Housing Properties Trust (NASD:SNH) Seasonal Chart

Waste Management, Inc. (NYSE:WM) Seasonal Chart

Waste Management, Inc. (NYSE:WM) Seasonal Chart

Citigroup, Inc. (NYSE:C) Seasonal Chart

Citigroup, Inc. (NYSE:C) Seasonal Chart

 

 

The Markets

Stocks closed higher on Friday in a typical start of month bump that sees fund inflows make their way into equities.  The S&P 500 Index gained around seven-tenths of one percent, charting the first close above the widely scrutinized 2800 level since early November.  Resistance, despite this close, remains intact just above this psychologically important level.

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For the week overall, the large-cap benchmark punched out a gain of 0.39%, recording a doji (indecision) candlestick.  These candlestick patterns are defined by lots of movement on either side of the opening price only to have price close just about where it started as buying and selling pressures essentially offset one another.  Doji candlestick patterns can often be found around short-term peaks in prices as some investors book profits, while others seek to jump on the train.  We last highlighted this candlestick pattern during the first full week of February when the benchmark was testing its declining 200-day moving average.  Of course, catalysts pertaining to the alleviation of government shutdown and tariff war concerns fuelled the market beyond that previous hurdle, violating the setup that suggested a short-term peak was in.  With those bullets now spent, it is unclear as to what the next catalyst could be to fuel the benchmark through the horizontal resistance that is now upon us without some kind of retracement to rebuild upside momentum.  Daily momentum indicators triggered sell signals on Thursday as the upside thrust in stocks gradually fades.  Seasonally, the month of March is one of the strongest periods of the year for stocks and it is rare to see losses in this third month of the year.

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For the Dow Jones Industrial Average, despite the valiant effort, the blue chip benchmark failed to make achieve a tenth straight week of gains.  Still, at nine straight weeks of gains, this is the longest stretch of consecutive weekly positive returns since May of 1995, the period just prior the massive bull market run that followed through the years thereafter.  Back in May of 1995, the benchmark had just broken out of a year-long consolidation pattern, resuming a longer-term trend of higher-highs and higher-lows.  As of present, the trend of higher-highs and higher-lows has yet to be confirmed.  The blue-chip benchmark is essentially in a year-long consolidation pattern of its own, trading predominantly within a range between 23,500 and 27,000.  Just looking at this weekly look of this one benchmark in isolation, the bias is, unfortunately, to the downside, until proven otherwise.  The benchmark broke below the lower limit of its trading range in December, albeit just for a couple of weeks, but that violation leaves a path open for price to once again follow.  A higher-low above the December bottom would present greater confidence that the ultimate low is actually in.  Momentum indicators on this weekly look continue to show lower-lows and lower-highs, suggesting selling pressures continue to outweigh buying pressures.  The benchmark remains on a weekly momentum buy signal since January.

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The percent of stocks on the Dow Jones Industrial Average trading above 200-day moving averages is hinting that a short-term change of trend is probable.  The indicator peaked just over a week ago at around 87 and has since fallen back to 73.  A similar high was realized in the percent of stocks trading above 200-day moving averages in the larger S&P 500 Index; the indicator is now lower than where it was just over a week ago despite prices being higher.  As a greater number of stocks show resistance at this long-term hurdle, the benchmark becomes top heavy with those that are holding support trying to pick up the slack of those that are not.  Eventually, if the benchmark cannot shake off the dead weight, a retracement lower follows in an attempt to find the buyers that will support the market to push prices above the hurdles overhead.

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On Friday, Statscan released the final look at GDP for 2018. The headline print of Canada’s key economic indicator for December pointed to a decline of 0.1%, missing the consensus analyst estimate that called for an unchanged result. The year-over-year rate according to this seasonally adjusted look stands at +1.1%, down from the +1.7% rate indicated as of the end of November. Stripping out the seasonal adjustments, GDP in Canada actually declined by 2.7%, which is inline with the average change for the month of December. The result places the calendar year change at +1.4%, which is a full percentage point below the 20-year average change. This is the weakest performance for the Canadian economy since 2015 when depressed commodity prices took a toll.  To obtain further insight on what this important indicator is saying about the economy, subscribe now and we’ll send you the results of our analysis.

Canada GDP - All industries Seasonal Chart

Monthly Canada GDP - All industries Data

Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.91.

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Seasonal charts of companies reporting earnings today:

21Vianet Group, Inc. (VNET) Seasonal Chart Adamas Pharmaceuticals, Inc. (ADMS) Seasonal Chart Addus HomeCare Corporation (ADUS) Seasonal Chart Atlas Financial Holdings, Inc. (AFH) Seasonal Chart BioCryst Pharmaceuticals, Inc. (BCRX) Seasonal Chart Ctrip.com International, Ltd. (CTRP) Seasonal Chart Gaia, Inc. (GAIA) Seasonal Chart Green Brick Partners, Inc. (GRBK) Seasonal Chart Inter Parfums, Inc. (IPAR) Seasonal Chart La Jolla Pharmaceutical Company (LJPC) Seasonal Chart Luna Innovations Incorporated (LUNA) Seasonal Chart Magic Software Enterprises Ltd. (MGIC) Seasonal Chart Otonomy, Inc. (OTIC) Seasonal Chart Park-Ohio Holdings Corp. (PKOH) Seasonal Chart Salesforce.com Inc (CRM) Seasonal Chart Spark Energy, Inc. (SPKE) Seasonal Chart Sterling Construction Company Inc (STRL) Seasonal Chart YY Inc. (YY) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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