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Stock Market Outlook for May 7, 2020


The put-call ratio just closed at the lowest level since the start of March as investors show signs of letting their guard down.

 

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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Dominion Energy, Inc. (NYSE:D) Seasonal Chart

Dominion Energy, Inc. (NYSE:D) Seasonal Chart

Seabridge Gold Inc. (TSE:SEA.TO) Seasonal Chart

Seabridge Gold Inc. (TSE:SEA.TO) Seasonal Chart

CommVault Systems Inc. (NASD:CVLT) Seasonal Chart

CommVault Systems Inc. (NASD:CVLT) Seasonal Chart

Altisource Portfolio Solutions S.A. (NASD:ASPS) Seasonal Chart

Altisource Portfolio Solutions S.A. (NASD:ASPS) Seasonal Chart

Heritage-Crystal Clean, Inc. (NASD:HCCI) Seasonal Chart

Heritage-Crystal Clean, Inc. (NASD:HCCI) Seasonal Chart

Kinross Gold Corp. (NYSE:KGC) Seasonal Chart

Kinross Gold Corp. (NYSE:KGC) Seasonal Chart

Twitter, Inc. (NYSE:TWTR) Seasonal Chart

Twitter, Inc. (NYSE:TWTR) Seasonal Chart

iShares Core US Growth ETF (NASD:IUSG) Seasonal Chart

iShares Core US Growth ETF (NASD:IUSG) Seasonal Chart

Invesco DWA Technology Momentum ETF (NASD:PTF) Seasonal Chart

Invesco DWA Technology Momentum ETF (NASD:PTF) Seasonal Chart

 

 

The Markets

Stocks closed down on Wednesday following a weak read on employment from payroll processor ADP.  The company indicated that private payrolls fell by 20.2 million last month, representing the worst one month decline on record.  The result sets the stage for an equally downbeat result when the Bureau of Labor Statistics releases the official government report on Friday.  The S&P 500 Index lost 0.70%, moving back towards moving averages at the 20 and 50-day.  This is typical price action going into an uncertain event as equity investors will tend to pin prices towards a major moving average; the longs will tend to peel back exposure if prices are above the variable hurdle, while the shorts will trim their bets if below.  We continue to wait with bated breath for the bearish crossover on MACD given the narrowing of the histogram over the past few weeks; the sell signal appear imminent.  Other momentum indicators have rolled over, including the 14,3 full stochastic oscillator and the slower 14,13 full stochastic stochastic oscillator.  Both have crossed back below 80, alleviating an overbought condition that persisted for much of April and triggering a sell signal in the process.  While the rebound in equity markets since the March low has been substantial, the action in the daily momentum indicators is still fairly characteristic of a bear market trend.

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On schedule for the Wednesday session, the Energy Information Administration (EIA) released their tally of petroleum inventories for the week just past.  The EIA reported that oil inventories increased by 4.6 million barrels last week, which is significantly less than the 7.8 million barrel build that was expected by analysts. Gasoline stockpiles, meanwhile, declined for the second straight week, falling by 3.2 million barrels. The result saw the days of supply of oil rise by 0.9 to 41.9, while gasoline days of supply dipped by 3.9 to 44.8. Both statistics remain in record high territory. The average days of supply for each at this time of year is 23.6 and 24.8, respectively.  We sent out further insight to subscribers intraday.  Signup now to be included on the distribution of all of our reports.

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 bullish at 0.85.  This is the lowest level since the start of March and the second lowest since the middle of February, prior to the bear market decline that followed.  The reading suggests that investors are starting to let down their guard after becoming extremely defensive in put options through the middle of March.  As investors become vulnerable, so too does the broader market as those hedges are no longer in a position to support stocks.  The sentiment gauge, however, is still far from showing outright complacency, as was apparent in the middle of February, at the peak of the market.

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Upcoming Presentation

The Money Show will be holding a Canadian Webinar series TODAY (Thursday, 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:

Bristol-Myers Squibb Company Seasonal Chart Danaher Corporation Seasonal Chart Linde plc Seasonal Chart Fidelity National Information Services, Inc. Seasonal Chart Anheuser-Busch Inbev SA Seasonal Chart Becton, Dickinson and Company Seasonal Chart Fiserv, Inc. Seasonal Chart Enbridge Inc Seasonal Chart Booking Holdings Inc. Seasonal Chart Equinor ASA Seasonal Chart Digital Realty Trust, Inc. Seasonal Chart BCE, Inc. Seasonal Chart Ambev S.A. Seasonal Chart Xcel Energy Inc. Seasonal Chart Monster Beverage Corporation Seasonal Chart Cognizant Technology Solutions Corporation Seasonal Chart EOG Resources, Inc. Seasonal Chart Consolidated Edison Inc Seasonal Chart Motorola Solutions, Inc. Seasonal Chart Ball Corporation Seasonal Chart TELUS Corporation Seasonal Chart Microchip Technology Incorporated Seasonal Chart Hilton Worldwide Holdings Inc. Seasonal Chart FleetCor Technologies, Inc. Seasonal Chart Canadian Natural Resources Limited Seasonal Chart AmerisourceBergen Corporation (Holding Co) Seasonal Chart Mettler-Toledo International, Inc. Seasonal Chart Moderna, Inc. Seasonal Chart Galapagos NV Seasonal Chart Hess Corporation Seasonal Chart CBRE Group, Inc. Seasonal Chart DISH Network Corporation Seasonal Chart Insulet Corporation Seasonal Chart EPAM Systems, Inc. Seasonal Chart Pembina Pipeline Corp. Seasonal Chart Alliant Energy Corporation Seasonal Chart Credicorp Ltd. Seasonal Chart Qorvo, Inc. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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