Contact | RSS Feed

Stock Market Outlook for March 12, 2020


Traders turning their selling pressures towards the defensive areas of the market, forcing the Gold Miners ETF below a horizontal trading range.

 

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.

Camden Property Trust (NYSE:CPT) Seasonal Chart

Camden Property Trust (NYSE:CPT) Seasonal Chart

Teledyne Technologies (NYSE:TDY) Seasonal Chart

Teledyne Technologies (NYSE:TDY) Seasonal Chart

ABB Ltd. (NYSE:ABB) Seasonal Chart

ABB Ltd. (NYSE:ABB) Seasonal Chart

Home Bancorp, Inc. (NASD:HBCP) Seasonal Chart

Home Bancorp, Inc. (NASD:HBCP) Seasonal Chart

Fox Factory Holding Corp. (NASD:FOXF) Seasonal Chart

Fox Factory Holding Corp. (NASD:FOXF) Seasonal Chart

American Homes 4 Rent (NYSE:AMH) Seasonal Chart

American Homes 4 Rent (NYSE:AMH) Seasonal Chart

iShares Diversified Monthly Income ETF (TSE:XTR.TO) Seasonal Chart

iShares Diversified Monthly Income ETF (TSE:XTR.TO) Seasonal Chart

BMO Real Return Bond Index ETF (TSE:ZRR.TO) Seasonal Chart

BMO Real Return Bond Index ETF (TSE:ZRR.TO) Seasonal Chart

Highland Income Fund (NYSE:HFRO) Seasonal Chart

Highland Income Fund (NYSE:HFRO) Seasonal Chart

 

 

The Markets

And the rollercoaster ride continues.  The S&P 500 Index gave back Tuesday’s gain to close lower by 4.89%, continuing to hover around the lows of last spring at 2728.  With benchmarks hovering around bear market territory, as defined as a decline of 20% from the previous peak (which was just charted a few weeks ago), traders are trying to find anything of value that they can sell in order to raise cash.  As a result, the areas that had provided refuge in the market meltdown got hit during Wednesday’s session.  The Utilities, REITs, and Consumer Staples sector benchmarks each recorded declines larger than the broader market on the day, falling firmly below their 200-day moving averages in the process.  These sectors had significantly outperformed the market on the way down as investors embraced the high yield, low volatility characteristics of sector constituents.  But, in this type of market, everything gets marked down to a new normal.  Seasonally, Utilities and REITs tend to strengthen through the spring and the summer, therefore the pullback in these seasonally desired segments is a nice reset that may provide attractive entry points for sidelined cash.  In the Seasonal Advantage Portfolio, we have been sitting with 40% cash coming into this week, combined with some hedges that have been working in our favour, and we are anxious to put capital back to work as soon as the air clears, whether that be today or sometime in the near future.

image

image

image

Not even Gold provided refuge in the midst of the ongoing ramp in volatility on Wednesday.  The Gold ETF fell by just over a third of a percent, while the gold miners ETF (GDX) fell by over 8%, slicing through horizontal support at $26.  A massive double top pattern has been derived with a downside target of last spring’s lows around $21.  Momentum indicators have been negatively diverging from price over the past couple of months, suggesting waning buying demand, despite the outperformance versus the broader equity market.  In the Seasonal Advantage Portfolio that we manage in partnership with Castlemoore, we sold our holding in the gold mining ETF in February, collapsing the trade as it became apparent that resistance overhead was likely to cap the position.  The next period of seasonal strength for the miners runs from the end of July through the end of September.  In our intraday report to subscribers pertaining to the consumer price index, we touch on gold as a holding in portfolios and the catalyst that is required in order for the price of the precious metal to move sustainably higher.  Subscribe now and we’ll send you this insight.

image

S&P/TSX Global Gold Index Seasonality

On the economic front, February’s report of the Consumer Price Index was released before Wednesday’s opening bell.  The headline print showed a month-over-month increase of 0.1%, keeping the year-over-year increase unchanged at 2.3%, inline with the consensus analyst estimate. Less food and energy, the inflation gauge ticked higher by two-tenths of one percent, fueling an uptick in the year-over-year rate to 2.4%. Stripping out the seasonal adjustments, the consumer price index for all urban consumers increased by 0.3% in February, which is weaker than the 0.4% increase that is average for the month. The year-to-date change is now a tenth of a percent below the seasonal average trend through the first two months of the year.  In our report to subscribers, we highlight the areas where the impact of the coronavirus is becoming evident. Signup now and we’ll show you where.

Consumer Price Index for All Urban Consumers: All Items Seasonal Chart

Also released to subscribers was a report on the state of petroleum inventories in the US.  With demand for energy commodities expected to take a toll as a result of the virus and investors pricing in a recession scenario, this timely report provides insight on the current fundamental status of the oil market in the US at this typically positive time of year for prices.  We break it all down in our report.  Signup or login now to access this report from the archive.

Weekly U.S. Days of Supply of Crude Oil excluding SPR  (Number of Days) Seasonal Chart

Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.36.

image

 

 

Seasonal charts of companies reporting earnings today:

Adobe Inc. Seasonal Chart Oracle Corporation Seasonal Chart Broadcom Inc. Seasonal Chart Dollar General Corporation Seasonal Chart Ulta Beauty, Inc. Seasonal Chart 58.com Inc. Seasonal Chart Gap, Inc. (The) Seasonal Chart China Biologic Products Holdings, Inc. Seasonal Chart Axsome Therapeutics, Inc. Seasonal Chart Uniti Group Inc. Seasonal Chart Inovio Pharmaceuticals, Inc. Seasonal Chart RadNet, Inc. Seasonal Chart Amphastar Pharmaceuticals, Inc. Seasonal Chart Adverum Biotechnologies, Inc. Seasonal Chart Zumiez Inc. Seasonal Chart Adecoagro S.A. Seasonal Chart Flexion Therapeutics, Inc. Seasonal Chart Amyris, Inc. Seasonal Chart

 

 

S&P 500 Index

image

image

 

 

TSE Composite

image

image

 

Sponsored By...
Seasonal Advantage Portfolio by CastleMoore

Comments are closed.