Contact | RSS Feed

Stock Market Outlook for May 4, 2020


S&P 500 Index rolling over from the 61.8% Fibonacci retracement zone, driving mathematic historians wild.

 

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.

Verisk Analytics Inc. (NASD:VRSK) Seasonal Chart

Verisk Analytics Inc. (NASD:VRSK) Seasonal Chart

Fresh Del Monte Produce (NYSE:FDP) Seasonal Chart

Fresh Del Monte Produce (NYSE:FDP) Seasonal Chart

Herbalife Nutrition Ltd. (NYSE:HLF) Seasonal Chart

Herbalife Nutrition Ltd. (NYSE:HLF) Seasonal Chart

Golar LNG Ltd (NASD:GLNG) Seasonal Chart

Golar LNG Ltd (NASD:GLNG) Seasonal Chart

UMH Properties, Inc. (NYSE:UMH) Seasonal Chart

UMH Properties, Inc. (NYSE:UMH) Seasonal Chart

iShares Core Canadian Long Term Bond Index ETF (TSE:XLB.TO) Seasonal Chart

iShares Core Canadian Long Term Bond Index ETF (TSE:XLB.TO) Seasonal Chart

Vanguard Health Care ETF (NYSE:VHT) Seasonal Chart

Vanguard Health Care ETF (NYSE:VHT) Seasonal Chart

United Therapeutics Corp. (NASD:UTHR) Seasonal Chart

United Therapeutics Corp. (NASD:UTHR) Seasonal Chart

Royal Gold, Inc. (NASD:RGLD) Seasonal Chart

Royal Gold, Inc. (NASD:RGLD) Seasonal Chart

Tech Data Corp. (NASD:TECD) Seasonal Chart

Tech Data Corp. (NASD:TECD) Seasonal Chart

iShares U.S. Healthcare ETF (NYSE:IYH) Seasonal Chart

iShares U.S. Healthcare ETF (NYSE:IYH) Seasonal Chart

 

 

The Markets

Stocks dipped to start the month of May as investors booked profits in some of the recent winners in this bear market decline, such as Amazon.  The S&P 500 Index shed 2.81%, giving back all of the week’s gain and trading back to levels around the previously broken declining 50-day moving average.  Momentum indicators continue to show signs of rolling over with MACD closing in on its signal line.  The rising 20-day moving average is in a position of support below at 2791.  This variable hurdle also aligns with the 50% retracement level of the February to March decline, making this a zone that will be highly scrutinized by market participants.  The rebound rally has seen the benchmark reach its 61.8% Fibonacci retracement level at 2934, a level that has, for now, capped the market advance.  While we are not big advocates of pinning targets based on these percent retracement zones, they are often helpful in determining the strength of the rebound.  Had the market stopped at the 38.2% retracement level (2650), the rebound could be classified as being weak, increasing the likelihood of a break of the previously set lows.  The 50% retracement level is essentially neutral, which could lead to a retest of the lows or not.  But the 61.8% retracement classifies the rebound as being strong, making a retest of the bottom on March 23rd a low probability.  Staying with these hurdles, a move lower towards the 38.2% Fibonacci level is a likely possibility, which, if tested, could draw in the masses off the sidelines that had been looking for a retest of the lows.

image

Briefly, on the weekly chart, the benchmark closed down by 0.21% for the five-day period.  The index was unable to hold levels above 2900 on a weekly basis, emphasizing the significance of this hurdle as resistance.  The benchmark tested levels close to the 50-week week moving average at 2992 at the high of the week, highlighting another level of significance overhead.  Previously, the 50-week moving average had been a reliable level of support in the bull market progression, but the break turns the tried and true hurdle into a point of resistance.

image

Just Released…

Our monthly report for May covers everything you need to execute your trading plan through the month(s) ahead.

Highlights include:

  • Equity market tendencies in the month of May
  • The shift of investor sentiment over recent months
  • Putting our playbook in context of the 2008 to 2009 market decline
  • Signs to lookout for in order to regain confidence in the market
  • Don’t fight the Fed and what the expanding balance sheet implies for Gold
  • Review of the market fundamentals and gauging the toll of COVID-19
  • When to anticipate a second coronavirus wave
  • What’s next in the seasonal rotation
  • The technical status of the S&P 500 Index
  • Sector reviews and ratings
  • Notable stocks and ETFs entering their period of strength in May

Subscribe now and we’ll send this 81-page report to you.

On the economic front, a report on construction spending in the US was released during Friday’s session.  The headline print indicated that activity increased by 0.9% in March, which is much stronger than the 3.5% decline that had been forecasted by analysts.  The year-over-year change now sits at +4.7%, which is slightly improved from the previously revised +4.6% year-over-year change as of the end of February.  Stripping out the seasonal adjustments, total construction spending in the US actually increased by 9.7% in March, which is just slightly weaker than the 10.8% increase that is average for the third month of the year.  The year-to-date change now sits higher by 2.4%, which is actually above the 0.9% increase that is average for the first quarter of the year.  Construction season was able to get off to an earlier than average start this year, the result of mild winter weather, and it looks like that momentum has carried into the end of the first quarter, despite all of the headwinds against the economy.  Perhaps not surprising, public safety construction performed the strongest through the first quarter, although above average trends can be seen in health care, residential, highway/street, and water supply construction.  Conservation, manufacturing, amusement/recreation, religious, commercial, office, and lodging construction all lagged historical norms as the economic closure weighed on activity.  Subscribers can login to the chart database to view the seasonal charts for this report at the following link: https://charts.equityclock.com/u-s-construction-spending

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

Sentiment on Friday as gauged by the put-call ratio, ended bearish at 1.18.

image

 

Upcoming Presentation

The Money Show will be holding a Canadian Webinar series on May 7th, titled “Opportunities and Strategies for What Comes Next.”   We’ll be presenting at 5:20pm ET on the topic of “Using Seasonality to Invest in an Abnormal Economic Environment.”  Attendance is free.  Click the banner below to reserve your spot now.

 

 

Seasonal charts of companies reporting earnings today:

Itau Unibanco Banco Holding SA Seasonal Chart Ferrari N.V. Seasonal Chart Sempra Energy Seasonal Chart WEC Energy Group, Inc. Seasonal Chart Public Service Enterprise Group Incorporated Seasonal Chart Williams Companies, Inc. (The) Seasonal Chart Tyson Foods, Inc. Seasonal Chart American International Group, Inc. Seasonal Chart Realty Income Corporation Seasonal Chart Skyworks Solutions, Inc. Seasonal Chart Jack Henry & Associates, Inc. Seasonal Chart Westinghouse Air Brake Technologies Corporation Seasonal Chart Varian Medical Systems, Inc. Seasonal Chart Loews Corporation Seasonal Chart Arch Capital Group Ltd. Seasonal Chart CNA Financial Corporation Seasonal Chart Vornado Realty Trust Seasonal Chart Clarivate Analytics Plc Seasonal Chart Diamondback Energy, Inc. Seasonal Chart Omega Healthcare Investors, Inc. Seasonal Chart Mohawk Industries, Inc. Seasonal Chart XPO Logistics, Inc. Seasonal Chart Dolby Laboratories Seasonal Chart Five9, Inc. Seasonal Chart National Retail Properties Seasonal Chart Westlake Chemical Corporation Seasonal Chart Trex Company, Inc. Seasonal Chart Chegg, Inc. Seasonal Chart BWX Technologies, Inc. Seasonal Chart Rexford Industrial Realty, Inc. Seasonal Chart Leggett & Platt, Incorporated Seasonal Chart Cirrus Logic, Inc. Seasonal Chart Mosaic Company (The) Seasonal Chart Allison Transmission Holdings, Inc. Seasonal Chart Equity Commonwealth Seasonal Chart Parsley Energy, Inc. Seasonal Chart Black Hills Corporation Seasonal Chart Performance Food Group Company Seasonal Chart Woodward, Inc. Seasonal Chart AppFolio, Inc. Seasonal Chart STARWOOD PROPERTY TRUST, INC. Seasonal Chart Unum Group Seasonal Chart

 

 

S&P 500 Index

image

image

 

 

TSE Composite

image

image

 

Sponsored By...
Seasonal Advantage Portfolio by CastleMoore

Comments are closed.