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Stock Market Outlook for April 30, 2019


Financials moving further above the neckline of a head-and-shoulders bottoming pattern, pulling the Russell 2000 Small Cap Index along with it.

 

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*** 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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Skyworks Solutions Inc. (NASD:SWKS) Seasonal Chart

Skyworks Solutions Inc. (NASD:SWKS) Seasonal Chart

NBT Bancorp, Inc. (NASD:NBTB) Seasonal Chart

NBT Bancorp, Inc. (NASD:NBTB) Seasonal Chart

MB Financial, Inc. (NASD:MBFI) Seasonal Chart

MB Financial, Inc. (NASD:MBFI) Seasonal Chart

Yelp Inc. (NYSE:YELP) Seasonal Chart

Yelp Inc. (NYSE:YELP) Seasonal Chart

Regional Management Corp. (NYSE:RM) Seasonal Chart

Regional Management Corp. (NYSE:RM) Seasonal Chart

Guyana Precious Metals Inc. (TSXV:GPM.V) Seasonal Chart

Guyana Precious Metals Inc. (TSXV:GPM.V) Seasonal Chart

 

Just Released…

Our Monthly Outlook for May provides you with the insight on how to navigate the market in the month ahead.

Highlights in this report include:

  • Equity market tendencies in the month of May
  • Examination of the “Sell In May and Go Away” strategy
  • Historical market tendencies during the summer and areas to look out for
  • A trigger to enact the seasonal switch between stocks and bonds
  • A fundamental review of the economy
  • The technical status of the S&P 500 Index
  • Notable stocks entering their period of strength in May

Subscribe now.

 

The Markets

Stocks closed at a fresh set of all-time highs on Monday as portfolio managers window dress their books ahead of the close of the month.  The S&P 500 Index added around a tenth of a percent, charting a new intraday and closing high in the process.  The benchmark remains in overbought territory following the substantial rally from the December low and momentum indicators, while remaining in bullish territory, are flat-lining.  The benchmark traded to the upper limit of a short-term rising trend channel during Monday’s session and reaction to the hurdle was obvious.  Trendline support can be seen at 2925.

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While the new all-time highs on the S&P 500 Index will undoubtedly attract attention, the more impressive breakout during Monday’s session was perhaps with the Russell 2000 Small Cap Index.  The benchmark has been pinned within an ascending triangle pattern over the past couple of months and on Monday as resolution to the narrowing range was achieved.  The benchmark broke out and closed above resistance just below 1600, completing a bullish setup that targets back to the previous highs around 1742.  Relative performance of the small cap benchmark continues to show signs of bottoming as investors bid up the market segment in an attempt to play catch-up with the broad market return.  Seasonally, the Russell 2000 tends to gain on an absolute and relative basis in the months of May and June.

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RUSSELL 2000 Index Seasonal Chart

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

$RUT Monthly Averages

Strength in financials could act as a catalyst for further gains in the small-cap benchmark.  Financials are the largest weight in the index, constituting close to 18% of the allocation.  The S&P 500 Financial sector benchmark has been moving above the neckline to a massive head-and-shoulders bottoming pattern, which suggests an upside target of new all-time highs.  A golden cross with respect to the 50 and 200-day moving averages appears imminent as the shorter-term average converges on the longer-term.  The benchmark is presently the most overbought since January of last year and a check-back of previous neckline resistance around 450 would not be unexpected.  Seasonally, financials typically weaken through the remainder of the second quarter as interest rates roll over.

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Financial Sector Seasonal Chart

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

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Seasonal charts of companies reporting earnings today:

1-800 FLOWERS.COM, Inc. (FLWS) Seasonal Chart Advanced Micro Devices, Inc. (AMD) Seasonal Chart Akamai Technologies, Inc. (AKAM) Seasonal Chart Amgen Inc. (AMGN) Seasonal Chart Apple Inc. (AAPL) Seasonal Chart Arconic Inc. (ARNC) Seasonal Chart Baker Hughes, a GE company (BHGE) Seasonal Chart Boston Properties, Inc. (BXP) Seasonal Chart BP p.l.c. (BP) Seasonal Chart Brinker International, Inc. (EAT) Seasonal Chart C.H. Robinson Worldwide, Inc. (CHRW) Seasonal Chart CAI International, Inc. (CAI) Seasonal Chart Carter's, Inc. (CRI) Seasonal Chart Casella Waste Systems, Inc. (CWST) Seasonal Chart Chubb Limited (CB) Seasonal Chart ConocoPhillips (COP) Seasonal Chart Corning Incorporated (GLW) Seasonal Chart Cummins Inc. (CMI) Seasonal Chart Devon Energy Corporation (DVN) Seasonal Chart Eaton Corporation, PLC (ETN) Seasonal Chart Edison International (EIX) Seasonal Chart Eli Lilly and Company (LLY) Seasonal Chart Encana Corporation (ECA) Seasonal Chart Equity Residential (EQR) Seasonal Chart Fiserv, Inc. (FISV) Seasonal Chart General Electric Company (GE) Seasonal Chart General Motors Company (GM) Seasonal Chart Ingersoll-Rand plc (Ireland) (IR) Seasonal Chart Mastercard Incorporated (MA) Seasonal Chart McDonald's Corporation (MCD) Seasonal Chart Merck & Company, Inc. (MRK) Seasonal Chart Mondelez International, Inc. (MDLZ) Seasonal Chart Nabors Industries Ltd. (NBR) Seasonal Chart Oshkosh Corporation (OSK) Seasonal Chart Pfizer, Inc. (PFE) Seasonal Chart Phillips 66 (PSX) Seasonal Chart Seagate Technology PLC (STX) Seasonal Chart Vertex Pharmaceuticals Incorporated (VRTX) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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