Contact | RSS Feed

Stock Market Outlook for June 5, 2019


 

The price of gold is showing a bullish setup as the period of seasonal strength nears.

 

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:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

Sandy Spring Bancorp, Inc. (NASD:SASR) Seasonal Chart

Sandy Spring Bancorp, Inc. (NASD:SASR) Seasonal Chart

HCP, Inc. (NYSE:HCP) Seasonal Chart

HCP, Inc. (NYSE:HCP) Seasonal Chart

First Financial Bankshares, Inc. (NASD:FFIN) Seasonal Chart

First Financial Bankshares, Inc. (NASD:FFIN) Seasonal Chart

Harley Davidson Inc (NYSE:HOG) Seasonal Chart

Harley Davidson Inc (NYSE:HOG) Seasonal Chart

 

 

The Markets

Stocks closed sharply higher on Tuesday as the apparent easing of trade tensions and dovish comments from Fed officials triggered a shake-out of defensive bets, which had become significantly overbought in recent days.  The S&P 500 Index added 2.14%, resulting in the second best day of 2019.  The benchmark moved firmly back above its 200-day moving average and inched above previous support at 2800, hinting of a failed breakdown, at least for the time-being.  Resistance at the 20 and 50-day moving averages at 2831 and 2868, respectively, present near-term upside hurdles.  Short-term momentum indicators have rebounded from oversold levels, suggesting downside pressures have alleviated, again for the time-being.  The abrupt surge in price is inline with our thesis that we presented in yesterday’s report, which is that the market was spring-loaded, poised for a strong move higher should a trigger be realized to shake the bears out of their defensive bets.  Bonds and other interest rate sensitive securities have become the consensus bet through the end of May and any reversal of that trade was bound to have a dominant influence on stocks.  We’ll have to monitor how long this counter-trend rally lasts given the uncertainty that persists surrounding trade. 

image

Benefitting from the volatility/uncertainty in equity markets, as well as the decline in the US Dollar, has been the price of Gold, which is carving out a cup-and-handle pattern.  The bullish setup projects upside potential to around 1500, should price exceed previous resistance around 1350.  Conducive for the continued move higher in the precious metal is the price action of the miners.  For the past couple of years, the S&P/TSX Global Gold Index has charted a series of lower-highs and lower-lows, but last week a higher significant low became confirmed, setting the stage for a trend of higher-highs and higher-lows.  A head-and-shoulders bottoming pattern on the chart would be fulfilled by a break above the neckline around 205.  Seasonally, the price of gold and the producers tend to gain between the end of July and the beginning of October, benefitting from the volatility that is typical of equity markets through the third quarter.

image

http://charts.equityclock.com/seasonal_charts/futures/FUTURE_GC1.PNG

image

On the economic front, a report on Factory Orders was released during Tuesday’s session.  The headline print indicated that orders fell by 0.8% in April, which was inline with the consensus analyst estimate.  Stripping out the seasonal adjustments, the value of manufacturers’ new orders for all manufacturing industries actually declined by 6.3% in April, which is stronger than the 7.3% decline that is average for this time of year.  The year to-to-date change is now 2.1% above average through the first four months of the year, a healthy pace given the headwinds being created by the ongoing tariff war.  We sent out a report on Durable Goods Orders to subscribers just over a week ago, detailing what is driving factory activity in the US.  Subscribe now to access this report, or view the seasonal charts for this report via the following link: https://charts.equityclock.com/u-s-factory-orders

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

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

image

 

 

 

Seasonal charts of companies reporting earnings today:

ABM Industries Incorporated (ABM) Seasonal Chart American Eagle Outfitters, Inc. (AEO) Seasonal Chart AstroNova, Inc. (ALOT) Seasonal Chart Brown Forman Corporation (BF.B) Seasonal Chart Campbell Soup Company (CPB) Seasonal Chart Five Below, Inc. (FIVE) Seasonal Chart G-III Apparel Group, LTD. (GIII) Seasonal Chart Greif Bros. Corporation (GEF) Seasonal Chart United Natural Foods, Inc. (UNFI) Seasonal Chart Vera Bradley, Inc. (VRA) Seasonal Chart Volt Information Sciences, Inc. (VISI) Seasonal Chart

 

 

S&P 500 Index

image

image

 

 

TSE Composite

image

image

 

Sponsored By...
Seasonal Advantage Portfolio by CastleMoore

Comments are closed.