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Stock Market Outlook for March 18, 2019


Widely tracked Emerging Market ETF bouncing strongly from a convergence of support around 50 and 200-day moving averages.

 

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:

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Intuitive Surgical, Inc. (NASD:ISRG) Seasonal Chart

Intuitive Surgical, Inc. (NASD:ISRG) Seasonal Chart

Balchem Corp. (NASD:BCPC) Seasonal Chart

Balchem Corp. (NASD:BCPC) Seasonal Chart

Coca Cola Co. (NYSE:KO) Seasonal Chart

Coca Cola Co. (NYSE:KO) Seasonal Chart

Genesis Land Development Corp. (TSE:GDC.TO) Seasonal Chart

Genesis Land Development Corp. (TSE:GDC.TO) Seasonal Chart

 

 

The Markets

Stocks closed higher on Friday led by a rally in technology as major market benchmarks break through barriers that had held them back over the past few weeks.  The S&P 500 Index added half of one percent, finally closing above the 2815 level of resistance.  The minute-by-minute look shows the moment that the large-cap benchmark broke through this barrier, unleashing a wave of buying pressures until headlines released in the afternoon pertaining to Google and Facebook dampened the strength in the very sector that fuelled the breakout.

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For the week, the large-cap benchmark was higher by 2.89%, instantly counteracting the bearish engulfing candlestick from the week prior.  Support at the 50-week moving average is becoming confirmed, which may allow those investors that sat on the sidelines since the December lows a pivot point to shoot off of as the benchmark inches back towards its all-time high around 2940.

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Prior to the breakout on the large-cap benchmark, a trend of lower-lows and lower-highs stemming from the September peak was implied.  The breakout, obviously, breaks this negative path.  Other indicators are suggesting the same.  The NYSE Advance-Decline Volume line closed at a new multi-month high on Friday; the standard NYSE cumulative advance-decline line hit a new all-time high.  New 52-week highs on the NYSE are on an upswing and 52-week lows have hit the floor after peaking in the middle of December. These are characteristics of a bull market trend, which has the power to draw cautious investors off the sidelines in order to chase performance.

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And global markets are participating.  The widely tracked emerging market ETF (EEM) jumped 1.46% on Friday, bouncing from its 200-day moving average on higher than average volume.  Investors are searching for those catch-up trades and international markets may be where they go to find those undervalued opportunities.  We profiled the MSCI World ex-US benchmark the other day, the seasonality of which proves to be positive through to May, outperforming the S&P 500 Index over that timeframe.  Emerging markets would, obviously, factor into this positive bias, gaining into the start of the second quarter.  Strength in emerging markets can provide valuable clues as to investor risk sentiment, which, at least for the present time, is attempting to swing upward.  Within the Seasonal Advantage Portfolio that we manage with CastleMoore, we invest in seasonal opportunities around the globe, including Emerging and Developed Market ETFs, which can provide value outside of the home bias that many investors suffer from.  Looking for a diversified approach to seasonal investing managed by a team of professionals with over 60 years of experience between them?  Email me at seasonalportfolio@equityclock.com.

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iShares MSCI Emerging Markets Indx  (EEM) Seasonality

On the economic front, industrial production in the US showed average growth in February, but the underlying details appear to show weather related distortions. The headline print indicated that US Industrial Production increased by a mere 0.1% in February, which was weaker than the 0.4% increase forecasted by analysts. The manufacturing component was particularly weak, declining by 0.4%, a divergence compared to forecasts calling for an increase of the same magnitude. Stripping out the seasonal adjustments, total industrial production actually increased by 0.3%, which is just shy of the 0.4% increase that is average for the second month of the year. The result places the year-to-date pace two-tenths of one percent above the seasonal average trend.  To receive our full analysis of this report, subscribe now and we’ll send it directly to your inbox.

Industrial Production: Total Seasonal Chart

Monthly Industrial Production: Total Data

On the economic front, job openings continued to rise into the new year, however, the non-adjusted results suggest that growth is slowing. The headline print of January’s Job Openings and Labor Turnover Survey (JOLTS) indicated that openings increased by 1.4%, to 7.581 million. Analyst were expecting a decline of 3.7% to 7.2 million. To put the headline result into perspective, 6.535 million people were considered unemployed at the end of January, according to the monthly employment situation report released by the Bureau of Labor Statistics. This means that there was at least one job available for everyone actively searching, a result that emphasizes the significant skills gap that is preventing an even more robust labor market and economy. Stripping out the seasonal adjustments, job openings actually increased by 8.1% in this first month of the year, which is less than half of the 18.8% increase that is average for January. The results follows a 22.0% increase in openings for all of 2018, which was 16.6% above the average calendar year change.  To receive more insight on the metrics behind job openings, hires, and quits in the US, signup to Equity Clock via the following link: https://charts.equityclock.com/subscribe

Job Openings: Total Nonfarm Seasonal Chart

Monthly Job Openings: Total Nonfarm Data

Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.85.

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Seasonal charts of companies reporting earnings today:

Advanced Emissions Solutions, Inc. (ADES) Seasonal Chart Amyris, Inc. (AMRS) Seasonal Chart Catalyst Pharmaceuticals, Inc. (CPRX) Seasonal Chart Cherry Hill Mortgage Investment Corporation (CHMI) Seasonal Chart Del Taco Restaurants, Inc. (TACO) Seasonal Chart Genesis Healthcare, Inc. (GEN) Seasonal Chart  L.B. Foster Company (FSTR) Seasonal Chart Lumber Liquidators Holdings, Inc (LL) Seasonal Chart Overstock.com, Inc. (OSTK) Seasonal Chart Teligent, Inc. (TLGT) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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