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Stock Market Outlook for July 22, 2019


Reaction to levels around previous resistance on the S&P 500 Index to be widely scrutinized.

 

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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Varian Medical Systems In (NYSE:VAR) Seasonal Chart

Varian Medical Systems In (NYSE:VAR) Seasonal Chart

Sensient Technologies Corp. (NYSE:SXT) Seasonal Chart

Sensient Technologies Corp. (NYSE:SXT) Seasonal Chart

First Interstate BancSystem Inc. (NASD:FIBK) Seasonal Chart

First Interstate BancSystem Inc. (NASD:FIBK) Seasonal Chart

Gallagher Arthur J & Co. (NYSE:AJG) Seasonal Chart

Gallagher Arthur J & Co. (NYSE:AJG) Seasonal Chart

Air Canada (TSE:AC.TO) Seasonal Chart

Air Canada (TSE:AC.TO) Seasonal Chart

Brookfield Infrastructure Partners L.P. (TSE:BIP/UN.TO) Seasonal Chart

Brookfield Infrastructure Partners L.P. (TSE:BIP/UN.TO) Seasonal Chart

 

 

The Markets

Stocks dipped on Friday as the enthusiasm that was apparent during the previous day’s session retrenched amidst clarification of comments from a Fed official relating to pre-emptive monetary stimulus.  The S&P 500 Index shed just over six-tenths of one percent, falling back to the 20-day moving average, which was tested at the lows of Thursday’s session.  Friday’s candlestick, while not fully encompassing the range of the previous session in order to qualify as an outside reversal, appears threatening given that the early session gains were quickly sold into.  Momentum sell signals highlighted in recent reports remain intact, suggesting a retracement back to levels of intermediate support may be underway. 

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For the week, the large-cap benchmark was lower by 1.23%, retracing the gain from the week prior.  Reaction to previous resistance around 2950 will be widely scrutinized as investors debate the legitimacy of the recent breakout to new all-time highs.  Major moving averages on this weekly look continue to point higher, conducive to a positive bias over the intermediate-term.  Seasonally, equity markets have now entered the weakest time of year.  Between July 17th and September 30th, the S&P 500 Index has declined by 1.41%, on average, over the past 20 years.  Investors may be best suited to “volatility hedge” portfolios, which could entail searching for names that have already corrected, lowering portfolio beta, or adding exposure to assets less correlated to broad equity market moves.

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On the economic front, Statscan released retail sales data before Friday’s opening bell.  The headline print of Canada Retail Sales report indicated that activity declined by 0.1% in May, which was a miss versus expectations of a 0.3% increase. The year-over-year pace fell from +3.7% to +1.0%. Stripping out the seasonal adjustments, retail sales in this country actually increased by 13.5% in May, which is stronger than the 10.0% increase that is average for this spring month. The year-to-date change is now trending a whopping 11.9% above the seasonal average, which is the best performance in the data that we have on record, spanning the past 28 years. Subscribers received further analysis intraday on Friday.

Retail trade Seasonal Chart

Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.09.  This is the highest level since the beginning of June, just as the market was attempting to overcome the weakness from the month prior.

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Seasonal charts of companies reporting earnings today:

American Campus Communities Inc (ACC) Seasonal Chart Bank of Hawaii Corporation (BOH) Seasonal Chart Brown & Brown, Inc. (BRO) Seasonal Chart Cal-Maine Foods, Inc. (CALM) Seasonal Chart Celanese Corporation (CE) Seasonal Chart Crane Co. (CR) Seasonal Chart GNC Holdings, Inc. (GNC) Seasonal Chart Halliburton Company (HAL) Seasonal Chart Lennox International, Inc. (LII) Seasonal Chart Logitech International S.A. (LOGI) Seasonal Chart RPM International Inc. (RPM) Seasonal Chart Steel Dynamics, Inc. (STLD) Seasonal Chart TD Ameritrade Holding Corporation (AMTD) Seasonal Chart Whirlpool Corporation (WHR) Seasonal Chart Zions Bancorporation N.A. (ZION) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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