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Stock Market Outlook for May 14, 2019


Bitcoin breaking out as it enters its strongest period of the year.

 

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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Spok Holdings, Inc. (NASD:SPOK) Seasonal Chart

Spok Holdings, Inc. (NASD:SPOK) Seasonal Chart

Virtus Investment Partners, Inc. (NASD:VRTS) Seasonal Chart

Virtus Investment Partners, Inc. (NASD:VRTS) Seasonal Chart

California Water Services Group (NYSE:CWT) Seasonal Chart

California Water Services Group (NYSE:CWT) Seasonal Chart

LivePerson, Inc. (NASD:LPSN) Seasonal Chart

LivePerson, Inc. (NASD:LPSN) Seasonal Chart

Sempra Energy (NYSE:SRE) Seasonal Chart

Sempra Energy (NYSE:SRE) Seasonal Chart

Guidewire Software, Inc. (NYSE:GWRE) Seasonal Chart

Guidewire Software, Inc. (NYSE:GWRE) Seasonal Chart

Hain Celestial Group, Inc. (NASD:HAIN) Seasonal Chart

Hain Celestial Group, Inc. (NASD:HAIN) Seasonal Chart

 

 

The Markets

Stocks closed sharply lower on Monday as the trade war between the US and China escalated following the announcement of retaliatory tariffs on US goods.  The S&P 500 Index dipped by 2.41%, falling below its 50-day moving average.  The benchmark appears on track to test levels around the 200-day as investors suggest longer-term negative implications in this “trade-spat.”  A range of support between the 200-day moving average at 2775 and previous horizontal resistance at 2815 provides a logical zone that buyers may attempt to support the large-cap benchmark, assuming fears subside over the short-term.  Intermediate and long-term moving averages continue to point higher, suggesting the longer-term trends remain intact.  However, the more that sentiment sours, this positive trajectory may be at risk.  The bulls will have much to prove on the next rebound attempt.  Failure to chart a new high would solidify the longer-term trading range on the large-cap benchmark between 2550 and 2950.  Subscribers that acted on our special alert from the start of May to adjust risk metrics in portfolios and book profits may now be wise to create their shopping list in order to be prepared for a rebound attempt.  Want to be included on future alerts?  Subscribe now.

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One area benefitting from the volatility in the equity market may be poised to move higher from a bullish technical pattern.  The price of gold has carved out what appears to be a cup-and-handle pattern, a bullish setup that would be fulfilled by a move above resistance around 1350.  The precious metal has been showing a long-term ascending triangle pattern for the past couple of years, the upper limit of which has been obvious around 1370.  A breakout from this upper hurdle could set the stage for a new bull market in gold.  Volatility and uncertainty in risk assets is acting as the catalyst for the precious metal to move higher, but any support from the US dollar would be conducive to a more sustainable trend.  The US Dollar Index remains on an intermediate-term path of higher-highs and higher-lows, counteracting a positive bias overall in commodity prices.  Seasonally, the price of gold tends to move higher through the third quarter.

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Gold Futures (GC) Seasonal Chart

Investors have been looking at alternative assets classes amidst the equity market meltdown and that has been a benefit to Bitcoin, which has ramped higher in recent days.  The crypto currency has essentially doubled over the past seven weeks, breaking definitively beyond a large-scale triangle consolidation pattern, setting the stage for the next leg higher.  Seasonally, Bitcoin is entering its strongest time of year with most months between June and December showing gains in 75% of periods (out of a 4-year timeframe).

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Sentiment on Monday, as gauged by the put-call ratio, ended bearish at 1.09.

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Seasonal charts of companies reporting earnings today:

8x8 Inc (EGHT) Seasonal Chart Agilent Technologies, Inc. (A) Seasonal Chart Amdocs Limited (DOX) Seasonal Chart Aurinia Pharmaceuticals Inc (AUPH) Seasonal Chart Aurora Cannabis Inc. (ACB) Seasonal Chart AZZ Inc. (AZZ) Seasonal Chart Container Store (The) (TCS) Seasonal Chart CorePoint Lodging Inc. (CPLG) Seasonal Chart Fortuna Silver Mines Inc. (FSM) Seasonal Chart Ralph Lauren Corporation (RL) Seasonal Chart Reeds, Inc. (REED) Seasonal Chart Sunworks, Inc. (SUNW) Seasonal Chart TransAlta Corporation (TAC) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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