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Stock Market Outlook for March 6, 2019


Sector rotation is leading to an unwind in Industrials as funds flow into Communication Services and Energy.

 

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:

Deluxe Corp. (NYSE:DLX) Seasonal Chart

Deluxe Corp. (NYSE:DLX) Seasonal Chart

Republic Services, Inc. (NYSE:RSG) Seasonal Chart

Republic Services, Inc. (NYSE:RSG) Seasonal Chart

Alliance Data Systems (NYSE:ADS) Seasonal Chart

Alliance Data Systems (NYSE:ADS) Seasonal Chart

Avalonbay Communities, Inc. (NYSE:AVB) Seasonal Chart

Avalonbay Communities, Inc. (NYSE:AVB) Seasonal Chart

DTE Energy Co. (NYSE:DTE) Seasonal Chart

DTE Energy Co. (NYSE:DTE) Seasonal Chart

Energen Corp. (NYSE:EGN) Seasonal Chart

Energen Corp. (NYSE:EGN) Seasonal Chart

Marathon Oil (NYSE:MRO) Seasonal Chart

Marathon Oil (NYSE:MRO) Seasonal Chart

Autonation, Inc. (NYSE:AN) Seasonal Chart

Autonation, Inc. (NYSE:AN) Seasonal Chart

 

 

The Markets

Stocks closed generally flat on Tuesday as investors wait for the next catalyst to move stocks.  The S&P 500 ended the session lower by a tenth of a percent, once again holding below horizontal resistance around 2800.  Gradually, we are starting to see some of the leaders from the rally since the December low rotated towards other areas that may have lagged during the broad market advance.  The industrial sector has had a significant run over the first two months of the year amidst optimism pertaining to trade and now the sector is rolling over, intersecting with its 20 day moving average for the first time since the year began.  Momentum indicators triggered sell signals last week, along with the broader market, just prior to the rollover in price in recent days.

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The same can be said of the Small Cap Russell 2000 Index, which has seen its momentum and relative strength fade since intersecting with resistance at its 200-day moving average.  Horizontal and moving average support on this small cap benchmark is apparent around 1475, or around 6% below present levels.  Seasonally, the strength of the small cap benchmark relative to the broader market fades between the start of March and the middle of May.

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http://charts.equityclock.com/seasonal_charts/indexes/$RUT_RelativeToSPX.PNG

So where are investors rotating to in the US market?  Communication services has ticked higher in the past couple of sessions and, to a lesser extent, energy is hinting of turn higher.  Both sectors exhibit positive seasonal tendencies through the month of March.

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On the economic front, the US Census Bureau continues to play catch-up with tallying new home sales for the year just past. The agency, which was impacted by the US government shutdown at the start of the year, reported that new home sales increased by 3.7% from a previously revised seasonally adjusted annual rate of 599,000 to 621,000 for the final month of 2018.  Analysts were expecting a rate of 590,000. Stripping out the seasonal adjustments, new home sales actually increased by 2.3% at the end of 2018, which is better than the 0.7% decline that is average for the month of December. Still, the result does little to mitigate the weakness that was realized through the Summer and Fall, leading to the 2.2% decline on a calendar-year basis. This is the first calendar year decline since 2010 when the housing market was still trying to recover from the recession in the years prior.  To receive our research and analysis intraday, subscribe now to be included on future distributions.

New Home Sales Seasonal Chart

Monthly New Home Sales Data

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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.89.

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Seasonal charts of companies reporting earnings today:

Abercrombie & Fitch Company (ANF) Seasonal Chart ABM Industries Incorporated (ABM) Seasonal Chart Alaska Communications Systems Group, Inc. (ALSK) Seasonal Chart American Eagle Outfitters, Inc. (AEO) Seasonal Chart Ballard Power Systems, Inc. (BLDP) Seasonal Chart Baytex Energy Corp (BTE) Seasonal Chart  Brown Forman Corporation (BF.B) Seasonal Chart Chico's FAS, Inc. (CHS) Seasonal Chart Craft Brew Alliance, Inc. (BREW) Seasonal Chart Dollar Tree, Inc. (DLTR) Seasonal Chart Donaldson Company, Inc. (DCI) Seasonal Chart  Newtek Business Services Corp. (NEWT) Seasonal Chart Rosetta Stone (RST) Seasonal Chart The Descartes Systems Group Inc. (DSGX) Seasonal Chart The Stars Group Inc. (TSG) Seasonal Chart Thor Industries, Inc. (THO) Seasonal Chart Xenon Pharmaceuticals Inc. (XENE) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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