Stock Market Outlook for April 15, 2020
CASS Information Systems reports that its freight index increased by 0.2% in March. While below the 2.8% increase that is average, it could have been much worse.
*** 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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Alliance Resource Partners, L.P. (NASD:ARLP) Seasonal Chart
TransDigm Group Inc. (NYSE:TDG) Seasonal Chart
Bright Horizons Family Solutions Inc. (NYSE:BFAM) Seasonal Chart
The Markets
Stocks surged on Tuesday as earnings season got underway with reports from Johnson & Johnson, JP Morgan, and Wells Fargo. The S&P 500 Index gained 3.06%, pushing closer to major moving averages presented by the 50 and 200-day. Momentum indicators on this daily look at the large-cap benchmark continue to point higher, rebounding from the dramatically oversold condition that dominated the month of March. Signs of peaking are not yet apparent with the MACD histogram still expanding day-after-day and RSI still showing a short-term trend of higher-highs and higher-lows stemming from the March low. These more intermediate gauges of the trend of the market have moved back to neutral territory, while stochastics, from this daily look, have reached overbought territory. After being nearly fully exposed to equities since the March low, our next move is likely to exit those positions, sheltering the gains following our well laid out plan that we provided to subscribers in the days prior to the market low. In the Seasonal Advantage Portfolio that we manage in partnership with CastleMoore, we held 40% in cash on the way down and have been as much as 95% exposed to outperforming equity positions on the way up. This is what active management means to us. We have been executing in opposition to the herd, buying when others were selling at the low and now we are looking to sell when others are buying, but we will not speculate on the short-term peak. In our technical commentary delivered directly to subscribers, we lay out some things that we are looking for to gauge when and how that exit point may be derived. Signup now.
On the economic front, CASS Information Systems released its report on shipping activity for the past month. The CASS Freight Index, which measures volume, increased by 0.2% in March, which is much weaker than the 2.8% increase that is average for the month. The year-to-date change in 2020 is now running 1.6% below the seasonal average trend. The indicator is often an effective leading indicator to economic activity and the weak results recorded last year suggested that the manufacturing economy certainly had much to prove coming into 2020. We sent out further insight to subscribers intraday. Signup now and we’ll tell you what this all means for the economy and the equity market moving forward.
Sentiment on Tuesday, a gauged by the put-call ratio, ended neutral at 0.99.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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