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Stock Market Outlook for September 20, 2019


The health care sector looks to be taking another swing higher within a triangle consolidation pattern.

 

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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Heidrick & Struggles Intl, Inc. (NASD:HSII) Seasonal Chart

Heidrick & Struggles Intl, Inc. (NASD:HSII) Seasonal Chart

Meridian Interstate Bancorp, Inc. (NASD:EBSB) Seasonal Chart

Meridian Interstate Bancorp, Inc. (NASD:EBSB) Seasonal Chart

Hollysys Automation Technologies, Ltd. (NASD:HOLI) Seasonal Chart

Hollysys Automation Technologies, Ltd. (NASD:HOLI) Seasonal Chart

Advance Auto Parts Inc. (NYSE:AAP) Seasonal Chart

Advance Auto Parts Inc. (NYSE:AAP) Seasonal Chart

Lear Corp. (NYSE:LEA) Seasonal Chart

Lear Corp. (NYSE:LEA) Seasonal Chart

Park Lawn  (TSE:PLC.TO) Seasonal Chart

Park Lawn (TSE:PLC.TO) Seasonal Chart

Eagle Bancorp Montana, Inc. (NASD:EBMT) Seasonal Chart

Eagle Bancorp Montana, Inc. (NASD:EBMT) Seasonal Chart

Campbell Soup Co. (NYSE:CPB) Seasonal Chart

Campbell Soup Co. (NYSE:CPB) Seasonal Chart

Progress Software Corp. (NASD:PRGS) Seasonal Chart

Progress Software Corp. (NASD:PRGS) Seasonal Chart

Banco Santander SA (NYSE:SAN) Seasonal Chart

Banco Santander SA (NYSE:SAN) Seasonal Chart

 

 

The Markets

Stocks closed flat on Thursday, giving up earlier gains following the suggestion that the US and China were not “anxious” to reach a trade deal.  The S&P 500 Index closed essentially unchanged, continuing to show hesitation amongst investors around these all-time high levels.  Short-term resistance has become apparent around 3020, less than 8 points away from the all-time high of 3027.98.  The large-cap benchmark remains supported around its 50-day moving average, a level that is supporting 76% of the constituents within the benchmark.  With the benchmark still firmly supported, a bullish bias remains warranted, however, there are questions pertaining to what the near-term catalyst may be to fuel the benchmark above levels of resistance overhead.  Seasonally, the benchmark tends to drift lower following Quadruple Witching (Friday) until the end of the month, influenced by a reallocation of investor positions ahead of the close of the quarter.

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Topping the leaderboard on Thursday were shares of healthcare companies, which are now the beneficiaries of the ongoing rotation playing out in the market.  The S&P 500 Healthcare index has found support in recent sessions around a congestion of major moving averages, including the 20, 50, and 200 day.  Subscribers will know that we’ve tried to argue a triangle consolidation pattern in our monthly outlook and the direction of the break would define the particular bias moving forward.  With a thick pen, it could be argued that lower trendline support is holding and the next swing is higher.  A series of higher lows since the December bottom suggests bullish pressures with the major hurdle to overcome being the 2019 highs between 1075 and 1100.  In the Seasonal Advantage Portfolio that we manage in partnership with Castlemoore, we are long the sector given that it checks off the three prongs to our approach.  Seasonally, the sector remains in a period of strength through to the beginning of December.

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Healthcare Sector Seasonal Chart

On the economic front, a report on existing home sales in the US was released during Thursday’s session. The headline print of August’s report on existing home sales indicates that activity increased by 1.3% last month to a seasonally adjusted annual rate of 5.49 million. Analysts were expecting a rate of 5.38 million. Stripping out the seasonal adjustments, existing home sales actually declined by 1.1% in August, which is a negative divergence compared to the 2.9% increase that is average for the summer month. The result places the year-to-date change higher by 41.6% through the end of August, which remains firmly above the 28.5% increase that is average through the first two-thirds of the year. This is the best pace since 2001. We provided more insight to subscribers intraday.  Subscribe now!

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

Sentiment on Thursday, as gauged by the put-call ratio, ended bearish at 1.12.

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This weekend we’ll be presenting at the Toronto Money Show on the topic of "Improving Investment Returns by Combining Seasonal, Fundamental, and Technical Analysis." Our audience can attend FREE by navigating to the Money Show website at https://conferences.moneyshow.com/moneyshow-toronto/workshop/991d533c1252427eba49b134bd6d6009/improving-investment-returns-by-combining-seasonal-fundamental-and-technical-analysis/?scode=048217.  Looking forward to seeing everyone there!

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Seasonal charts of companies reporting earnings today:

  • No significant earnings scheduled

 

 

S&P 500 Index

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TSE Composite

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