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Stock Market Outlook for April 4, 2019


Materials sector breaking above the neckline of a head-and-shoulders bottoming pattern as positive seasonal tendencies start to bear fruit.

 

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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Intel Corp. (NASD:INTC) Seasonal Chart

Intel Corp. (NASD:INTC) Seasonal Chart

Huron Consulting Group Inc. (NASD:HURN) Seasonal Chart

Huron Consulting Group Inc. (NASD:HURN) Seasonal Chart

Centric Health Corp. (TSE:CHH.TO) Seasonal Chart

Centric Health Corp. (TSE:CHH.TO) Seasonal Chart

Key Tronic Corp. (NASD:KTCC) Seasonal Chart

Key Tronic Corp. (NASD:KTCC) Seasonal Chart

Ribbon Communications Inc. (NASD:RBBN) Seasonal Chart

Ribbon Communications Inc. (NASD:RBBN) Seasonal Chart

Pengrowth Energy Corp. (TSE:PGF.TO) Seasonal Chart

Pengrowth Energy Corp. (TSE:PGF.TO) Seasonal Chart

 

 

The Markets

Stocks were buoyed on Wednesday amidst ongoing optimism pertaining to a trade agreement between the US and China.  The S&P 500 Index gained two-tenths of one percent, led by strength in technology and materials.  The S&P 500 Materials Sector Index resolved a short-term consolidation range between its rising 50-day moving average and the declining 200-day moving average and is now trading above the neckline to an apparent head-and-shoulders bottoming pattern.  The bullish setup suggests a move back to the previous all-time high around 400.  Seasonally, the materials sector remains in a period of seasonal strength through the month of April.  Within the Seasonal Advantage Portfolio that we manage in partnership with CastleMoore, materials is one of the largest sector weights.  Looking to gain exposure to our strategy?  Email us at seasonalportfolio@equityclock.com to learn how you can open an account at CastleMoore and have us manage your portfolio.

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Materials Sector Seasonal Chart

The strength in domestic equity markets failed to compare to the strength realized overseas on Wednesday.  The Shanghai Composite added 1.24%, charting a new 52-week closing high.  The Japanese Nikkei added just less than one percent, maintaining a gap that was opened at the start of the week.  And the German DAX surged by 1.70%, moving definitively above its 200-day moving average for the first time since the middle of last year.  Both the Nikkei and the DAX are showing similar head-and-shoulders bottoming patterns as the materials sector highlighted above.  Seasonally, the month of April is one of the strongest months of the year for these foreign indices and so far they are on track to outperform seasonal norms.  A couple of weeks ago we delivered a report to subscribers titled “Better Opportunities Outside of the US.”  It appears the plays identified within are finally bearing fruit.  Subscribe now and feel free to request this report that was delivered directly to members via email.

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DAX Index Seasonal Chart

$DAX Relative to the S&P 500
$DAX Relative to the S&P 500

On schedule for the Wednesday session, the Energy Information Administration (EIA) released the status of petroleum inventories in the US. The EIA indicated that crude oil inventories jumped sharply by 7.2 million barrels in the week ending March 29th, while gasoline inventories we lower by 1.8 million barrels. The result places the days of supply of oil higher by half of a day to 28.1 while gasoline saw a decline of three-tenths to 25.7. The average days of supply for oil and gas at the end of March is 23.8 and 25.4, respectively.  Want more insight on the state of the seasonal trade in the Energy sector?  Subscribe now and we’ll send you our latest report.

Weekly U.S. Days of Supply of Crude Oil excluding SPR  (Number of Days) Seasonal Chart

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.86.

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Seasonal charts of companies reporting earnings today:

Constellation Brands Inc (STZ) Seasonal Chart Franklin Covey Company (FC) Seasonal Chart International Speedway Corporation (ISCA) Seasonal Chart RPM International Inc. (RPM) Seasonal Chart Schnitzer Steel Industries, Inc. (SCHN) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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