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Stock Market Outlook for April 18, 2019


In just a few months, the Healthcare sector has shed 6 years of outperformance versus the market, but this may prove to be an opportunity for seasonal investors.

 

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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The Intergroup Corp. (NASD:INTG) Seasonal Chart

The Intergroup Corp. (NASD:INTG) Seasonal Chart

Astro-Med, Inc. (NASD:ALOT) Seasonal Chart

Astro-Med, Inc. (NASD:ALOT) Seasonal Chart

Humana, Inc. (NYSE:HUM) Seasonal Chart

Humana, Inc. (NYSE:HUM) Seasonal Chart

Kroger Co. (NYSE:KR) Seasonal Chart

Kroger Co. (NYSE:KR) Seasonal Chart

Cirrus Logic, Inc. (NASD:CRUS) Seasonal Chart

Cirrus Logic, Inc. (NASD:CRUS) Seasonal Chart

Molina Healthcare, Inc. (NYSE:MOH) Seasonal Chart

Molina Healthcare, Inc. (NYSE:MOH) Seasonal Chart

 

 

The Markets

Stocks closed mildly lower on Wednesday as a selloff in healthcare overshadowed upbeat results pertaining to economic activity in China.  The S&P 500 Index closed down by just less than a quarter of one percent, consolidating above the ascending triangle pattern highlighted last week.  Upside target of the continuation pattern points to 2930, just a hair below the previous peak around 2940.  The market is attempting to digest the downfall in the second largest sector constituent, health care, by rotating into the largest sector, technology.  The S&P 500 Technology Sector Index continues to chart new all-time highs and the trend relative to the market continues to point higher.  Seasonally, the sector tends to outperform the broader market between the middle of April and the middle of July as investors trim exposure to cyclical bets and gravitate towards growth, which tends to have defensive characteristics into the summer months.

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http://charts.equityclock.com/seasonal_charts/TECHNOLOGY_RelativeToSPX.PNG

The selloff in the health care sector, which represents close to 14% of the S&P 500 Index, has eliminated all of the year-to-date gains for this previous steady performer.  Rhetoric pertaining to “Medicare for All,” which caused the CEO of United Health to weigh in suggesting that it would destabilize the nation’s health system, has sent a wave through this market segment, leaving no stock immune.  The Health Care Providers ETF (IHF) is down by over 11.5% in just five sessions; the Biotech ETF (IBB) is down around 7% during that span.  Even though the prospect of “Medicare for All” being enacted is slim, the talk has certainly fuelled panic, causing significant outflows as investors trim exposure to the former market darling.  The healthcare benchmark relative to the S&P 500 Index is at the lowest level since 2013, implying that in just a few months the sector has given back approximately six years of outperformance.  For seasonal investors, the panic and weakness is welcome as it provides the opportunity to pick up unfairly punished constituents for the period of seasonal strength for the sector that begins on April 25th, on average.  This is an allocation that we are presently monitoring for the Seasonal Advantage Portfolio that we manage in partnership with CastleMoore.  More inclined to manage your own portfolio?  Subscribers to our service were provided with a model allocation, identifying the percentage portfolio weight that has delivered the best portfolio performance during the seasonal holding period ahead.

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http://charts.equityclock.com/seasonal_charts/HEALTHCARE_RelativeToSPX.PNG

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.81.

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Seasonal charts of companies reporting earnings today:

Ally Financial Inc. (ALLY) Seasonal Chart American Express Company (AXP) Seasonal Chart BB&T Corporation (BBT) Seasonal Chart Check Point Software Technologies Ltd. (CHKP) Seasonal Chart Citizens Financial Group, Inc. (CFG) Seasonal Chart Danaher Corporation (DHR) Seasonal Chart Dover Corporation (DOV) Seasonal Chart Genuine Parts Company (GPC) Seasonal Chart Honeywell International Inc. (HON) Seasonal Chart Intuitive Surgical, Inc. (ISRG) Seasonal Chart KeyCorp (KEY) Seasonal Chart ManpowerGroup (MAN) Seasonal Chart People's United Financial, Inc. (PBCT) Seasonal Chart Philip Morris International Inc (PM) Seasonal Chart Pool Corporation (POOL) Seasonal Chart Regions Financial Corporation (RF) Seasonal Chart Rogers Communication, Inc. (RCI) Seasonal Chart Schlumberger N.V. (SLB) Seasonal Chart Skechers U.S.A., Inc. (SKX) Seasonal Chart Snap-On Incorporated (SNA) Seasonal Chart Sonoco Products Company (SON) Seasonal Chart SunTrust Banks, Inc. (STI) Seasonal Chart Synchrony Financial (SYF) Seasonal Chart Taiwan Semiconductor Manufacturing Company Ltd. (TSM) Seasonal Chart The Blackstone Group L.P. (BX) Seasonal Chart The Travelers Companies, Inc. (TRV) Seasonal Chart Unilever PLC (UL) Seasonal Chart Union Pacific Corporation (UNP) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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