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Stock Market Outlook for May 28, 2020


S&P 500 Index closed back above its 200-day moving average for the first time since March 4th.

 

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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Exponent, Inc. (NASD:EXPO) Seasonal Chart

Exponent, Inc. (NASD:EXPO) Seasonal Chart

Saul Centers, Inc. (NYSE:BFS) Seasonal Chart

Saul Centers, Inc. (NYSE:BFS) Seasonal Chart

IAMGOLD Corp. (NYSE:IAG) Seasonal Chart

IAMGOLD Corp. (NYSE:IAG) Seasonal Chart

MagnaChip Semiconductor Corp. (NYSE:MX) Seasonal Chart

MagnaChip Semiconductor Corp. (NYSE:MX) Seasonal Chart

VanEck Vectors Junior Gold Miners ETF (NYSE:GDXJ) Seasonal Chart

VanEck Vectors Junior Gold Miners ETF (NYSE:GDXJ) Seasonal Chart

iShares International Treasury Bond ETF (NASD:IGOV) Seasonal Chart

iShares International Treasury Bond ETF (NASD:IGOV) Seasonal Chart

Sprott Physical Gold Trust (NYSE:PHYS) Seasonal Chart

Sprott Physical Gold Trust (NYSE:PHYS) Seasonal Chart

 

 

The Markets

Stocks closed strongly higher on Wednesday as the rotation towards beaten down areas of the market continues.  The S&P 500 Index gained 1.48%, closing above its 200-day moving average for the first time since March 4th.  A surge in shares of financial and industrial companies fuelled the broad market gain, while technology and communications services, the former market darlings, lagged by comparison.  The financial sector ETF (XLF) broke above short-term resistance at $23.66, completing a basing pattern.  Open gaps at $25 and $26 present two hurdles to contend with on the upside, but the breakout from the bottoming pattern projects a move towards $27, which is over 12% above present levels.  Seasonally, the financial sector tends to be the weakest performing segment of the market in the month of June, falling by 1.6%, on average.  Interested to find out what we’re rotating towards in this market?  Subscribe now to be included on our daily market outlook distribution, just one of many reports that we prepare exclusively for our subscribers.

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Financial Sector Seasonal Chart

There may be a limit to this market rebound.  The Nasdaq 100 Index, which has been a large technology focused benchmark that traders have tended to hook their horse to for years, is showing signs of struggle around the previous peak seen over three months ago.  The index shed over 2% at the lows of Wednesday’s session, filling the gap that was opened a week and a half ago around 9200.  The relative performance trend still points higher from the past five months, but recent relative performance has faded as traders rotate away from the previous winners in order to seek opportunities in some of the market laggards.  Previously, it seemed unreasonable that the equity market could chart a “V” recovery, but the Nasdaq 100 has clearly achieved this result.  Now the better debate will be whether stocks can advance beyond all-time highs.  Of course, this seems improbable given the severe economic destruction that has resulted from this pandemic, but the market likes to push back on what is likely and what is not.  For now, levels around the all-time highs charted in February may be as good as it gets in the near-term.  Seasonally, the Nasdaq 100 Index, which can be played via the Invesco QQQ Trust (QQQ), has tended to be a good holding during summer months as investors will latch onto growth during lower growth timeframes.  The Nasdaq 100 has been a core holding of ours since the end of March.

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http://charts.equityclock.com/seasonal_charts/indexes/$NDX_RelativeToSPX.PNG

We are busy putting the finishing touches on our monthly outlook for June, which covers everything you need to know for the month(s) ahead.  Subscribe now to be included on our distribution list.

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.86.

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Seasonal charts of companies reporting earnings today:

Salesforce.com Inc Seasonal Chart Costco Wholesale Corporation Seasonal Chart Toronto Dominion Bank (The) Seasonal Chart Vmware, Inc. Seasonal Chart Dollar General Corporation Seasonal Chart Veeva Systems Inc. Seasonal Chart Canadian Imperial Bank of Commerce Seasonal Chart Dollar Tree, Inc. Seasonal Chart Trip.com Group Limited Seasonal Chart Burlington Stores, Inc. Seasonal Chart Ulta Beauty, Inc. Seasonal Chart Ollie's Bargain Outlet Holdings, Inc. Seasonal Chart Williams-Sonoma, Inc. Seasonal Chart Tech Data Corporation Seasonal Chart Pure Storage, Inc. Seasonal Chart DXC Technology Company Seasonal Chart Momo Inc. Seasonal Chart Sanderson Farms, Inc. Seasonal Chart BRP Inc. Seasonal Chart Nordstrom, Inc. Seasonal Chart Monro, Inc. Seasonal Chart Steven Madden, Ltd. Seasonal Chart Adverum Biotechnologies, Inc. Seasonal Chart Canadian Solar Inc. Seasonal Chart Abercrombie & Fitch Company Seasonal Chart Golar LNG Limited Seasonal Chart Geron Corporation Seasonal Chart Triumph Group, Inc. Seasonal Chart Hoegh LNG Partners LP Seasonal Chart Modine Manufacturing Company Seasonal Chart Lumber Liquidators Holdings, Inc Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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