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Stock Market Outlook for May 28, 2019


S&P 500 Index: Short-term head-and-shoulders topping pattern projects downside potential towards 2650, should the neckline to the bearish setup break around 2800.

 

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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Ionis Pharmaceuticals, Inc. (NASD:IONS) Seasonal Chart

Ionis Pharmaceuticals, Inc. (NASD:IONS) Seasonal Chart

Boyd Group Income Fund (TSE:BYD/UN.TO) Seasonal Chart

Boyd Group Income Fund (TSE:BYD/UN.TO) Seasonal Chart

Team, Inc. (NYSE:TISI) Seasonal Chart

Team, Inc. (NYSE:TISI) Seasonal Chart

Wheaton Precious Metals Corp. (TSE:WPM.TO) Seasonal Chart

Wheaton Precious Metals Corp. (TSE:WPM.TO) Seasonal Chart

 

 

 

The Markets

Stocks closed marginally higher on Friday as investors squared away their positions ahead the three-day weekend in the US.   The S&P 500 Index posted a gain of just over one tenth of one percent, remaining below the open gap charted in the previous session.  The pivot point at 2853 is now in a position of resistance.  The benchmark has pegged resistance at the 20-day moving average, which is about to chart a bearish crossover with the 50-day moving average.  A short-term head-and-shoulders pattern is apparent on the chart based on the trading activity since the middle of March.  The neckline of the bearish setup is around 2800, a break of which would project downside potential towards 2650, which approximately matches the lows charted in October and November.  Risk sentiment remains weak, but we are just one tweet away from the next move higher or lower.

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For the week, the large-cap benchmark was lower by 1.17%, testing the rising 20-week moving average at the lows of the period.  This hurdle has presented support characteristics in the past.  Momentum indicators continue to roll over with MACD seemingly poised to trigger a weekly sell signal.  Resistance at the previous peak around 2940 stands out on the chart, which is easy to speculate that this hurdle forms the basis of a double-top.  Regardless of whether it proves to be this ominous topping pattern, just gauging the market by the sum of its parts shows that this is a market that is reacting more to levels of resistance than it is to levels of support, warranting a cautious stance until the weight of the evidence favours the other.

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The week ahead is shortened by Memorial Day on Monday, providing little time for portfolio managers to close their books before the end of the month.  However, while investors position for the month ahead, there is typically a positive bias for the equity market in the holiday week.  The S&P 500 Index has gained an average of 0.52% over the 4-day week, producing gains in 62% of periods since 1990.

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On the economic front, a report on durable goods orders was released before Friday’s opening bell.  The headline print indicated that new orders declined by 2.1% in April, which is marginally better than the 2.2% decline that was forecasted by analysts. Core capital goods orders were lower by 0.9%, missing the consensus analyst estimate that called for a gain of 0.1%. Stripping out the seasonal adjustments, the Value of Manufacturers’ New Orders for Durable Goods Industries actually fell by 12.2% in April, which is slightly weaker than the 11.7% decline that is average for the spring month. The result places the year-to-date change above the seasonal average trend by 1.8%, still a healthy result in the midst of diminished activity from Boeing and tariff headwinds.  Subscribers received further analysis directly via their inbox.  Don’t be left out.  Subscribe now.

http://charts.equityclock.com/seasonal_charts/economic_data/UMDMNO_seasonal_chart.PNG

Sentiment on Friday, as gauged by the put-call ratio, ended close to neutral at 0.96.

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Seasonal charts of companies reporting earnings today:

American Woodmark Corporation (AMWD) Seasonal Chart Bank of Nova Scotia (The) (BNS) Seasonal Chart Booz Allen Hamilton Holding Corporation (BAH) Seasonal Chart Euroseas Ltd. (ESEA) Seasonal Chart Heico Corporation (HEI) Seasonal Chart LiveRamp Holdings, Inc. (RAMP) Seasonal Chart Momo Inc. (MOMO) Seasonal Chart Quotient Limited (QTNT) Seasonal Chart Safe Bulkers, Inc (SB) Seasonal Chart Workday, Inc. (WDAY) Seasonal Chart YY Inc. (YY) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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