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Stock Market Outlook for April 15, 2019


S&P 500 Total Return Index closes at a new record high.

 

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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j2 Global Communications Inc. (NASD:JCOM) Seasonal Chart

j2 Global Communications Inc. (NASD:JCOM) Seasonal Chart

UNITIL Corp. (NYSE:UTL) Seasonal Chart

UNITIL Corp. (NYSE:UTL) Seasonal Chart

CyrusOne Inc. (NASD:CONE) Seasonal Chart

CyrusOne Inc. (NASD:CONE) Seasonal Chart

Live Nation Entertainment, Inc. (NYSE:LYV) Seasonal Chart

Live Nation Entertainment, Inc. (NYSE:LYV) Seasonal Chart

Del Taco Restaurants, Inc. (NASD:TACO) Seasonal Chart

Del Taco Restaurants, Inc. (NASD:TACO) Seasonal Chart

 

 

The Markets

Stocks gained on Friday following better than expected earnings from JP Morgan and optimism surrounding Disney’s new streaming service.  Shares of the blue chip companies jumped 4.69% and 11.54%, respectively.  In the Seasonal Advantage Portfolio that we manage in partnership with CastleMoore, we have exposure to Disney via the Invesco Dynamic Media ETF (PBS). The S&P 500 Index climbed higher by two-thirds of a percent, breaking above the short-term ascending triangle pattern highlighted in our last report.  The continuation pattern projects a target towards 2930, essentially within a hair of the all-time high around 2940.

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For the week, the large-cap benchmark gained just over four-tenths of one percent, continuing to advance beyond the open gap around 2840.  Momentum indicators on this weekly look are pointing higher, along with major moving averages.  While the benchmark reaches back towards its previous all-time high, the total return index has already surpassed it.  The S&P 500 Total Return Index closed the week at 5815.21, surpassing the all-time intraday high charted on September 17th at 5814.95.  The NASDAQ 100 is also showing a similar all-time high on a total return basis.  This is certainly a market that is more willing to break down barriers as opposed to stopping at levels of resistance, undoubtedly a bullish characteristic.  As highlighted in a previous report, we hiked our cyclical exposure in the Seasonal Advantage Portfolio at the end of March and so far have been nicely rewarded for it.  But while we are basking in the positive trends that are lifting portfolio values to new highs, we are also monitoring the areas of the market that have been weakening amidst the cyclical upturn as these are the areas that tend to perform well beyond the month of April.  A rotation away from cyclical areas of the equity market and into some of the more defensive areas may soon be warranted.  Interested in gaining exposure to our strategy?  Email us at seasonalportfolio@equityclock.com.

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For the week, Financials was the best performing sector.  The S&P 500 Financial Sector Index gained 2.09% and advanced firmly beyond resistance at the 200-day moving average; support was recently confirmed at the rising 50-day moving average.  But while the technicals are showing new life, seasonal tendencies for the sector begin to fade following the middle of April.  Performance of the sector relative to the market tends to fall off following the release of earnings from some of the big US banks, resulting in a negative relative trend between the start of May and the middle of July.  Financials have been lagging the market performance for the past year as yields decline and spreads narrow.  Recently, yield spreads at the intermediate and long end of the curve have shown signs of bottoming, which, if confirmed, could act as a positive catalyst for financial stocks.  Strength in the financial sector, if sustained, would be sufficient to fuel the next leg higher in the broad market.

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Financial Sector Seasonal Chart

FINANCIAL Relative to the S&P 500
FINANCIAL Relative to the S&P 500

FINANCIAL Monthly Averages

Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.74.  This matches the lowest level since the end of last August, suggesting complacency amongst investors.  This leaves the market in a vulnerable position as investors look exclusively to the upside, eliminating any hedges/negative bets that would present a backstop.

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Sectors and Industries entering their period of seasonal strength:

Technology Sector Seasonal Chart

TECHNOLOGY Relative to the S&P 500
TECHNOLOGY Relative to the S&P 500

TECHNOLOGY Monthly Averages

 

 

Seasonal charts of companies reporting earnings today:

Citigroup Inc. (C) Seasonal Chart Goldman Sachs Group, Inc. (The) (GS) Seasonal Chart M&T Bank Corporation (MTB) Seasonal Chart Pinnacle Financial Partners, Inc. (PNFP) Seasonal Chart ServisFirst Bancshares, Inc. (SFBS) Seasonal Chart  Wintrust Financial Corporation (WTFC) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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