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Stock Market Outlook for May 29, 2020


Russell 2000 Small Cap ETF charted a reversal candlestick around a level of significant resistance.

 

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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Catalyst Pharmaceuticals Partners Inc. (NASD:CPRX) Seasonal Chart

Catalyst Pharmaceuticals Partners Inc. (NASD:CPRX) Seasonal Chart

MutualFirst Financial, Inc. (NASD:MFSF) Seasonal Chart

MutualFirst Financial, Inc. (NASD:MFSF) Seasonal Chart

ETFS Physical Precious Metals Basket Shares (NYSE:GLTR) Seasonal Chart

ETFS Physical Precious Metals Basket Shares (NYSE:GLTR) Seasonal Chart

Global X Gold Explorers ETF (AMEX:GOEX) Seasonal Chart

Global X Gold Explorers ETF (AMEX:GOEX) Seasonal Chart

Invesco DWA Utilities Momentum ETF (NASD:PUI) Seasonal Chart

Invesco DWA Utilities Momentum ETF (NASD:PUI) Seasonal Chart

Aberdeen Standard Physical Swiss Gold Shares ETF (NYSE:SGOL) Seasonal Chart

Aberdeen Standard Physical Swiss Gold Shares ETF (NYSE:SGOL) Seasonal Chart

Bank of Montreal (TSE:BMO.TO) Seasonal Chart

Bank of Montreal (TSE:BMO.TO) Seasonal Chart

Fairfax Financial Holdings Ltd. (TSE:FFH.TO) Seasonal Chart

Fairfax Financial Holdings Ltd. (TSE:FFH.TO) Seasonal Chart

Laurentian Bank Of Canada (TSE:LB.TO) Seasonal Chart

Laurentian Bank Of Canada (TSE:LB.TO) Seasonal Chart

Oxford Industries Inc. (NYSE:OXM) Seasonal Chart

Oxford Industries Inc. (NYSE:OXM) Seasonal Chart

Welltower Inc. (NYSE:WELL) Seasonal Chart

Welltower Inc. (NYSE:WELL) Seasonal Chart

BG Staffing Inc. (NYSE:BGSF) Seasonal Chart

BG Staffing Inc. (NYSE:BGSF) Seasonal Chart

Ally Financial Inc. (NYSE:ALLY) Seasonal Chart

Ally Financial Inc. (NYSE:ALLY) Seasonal Chart

 

 

The Markets

Stocks closed lower on Thursday, giving up earlier gains following news that President Trump would be holding a press conference on Friday pertaining to China.  The nebulous announcement turned the over one percent gain on the S&P 500 index to a decline of two-tenths of one percent, hitting the lows of the day just minutes before the closing bell.  The benchmark continues to hold above its 200-day moving average, which was broken in the previous session.  Friday’s close will be critical to confirm if the breakout above the 200-day moving average is real.  Not  only does Friday’s session present the end of the week, but it also presents the end of the month, therefore where the benchmark closes in relation to its long-term moving averages will be telling of the path for stocks ahead.

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Thursday’s session had a risk-off feel right from the opening bell as health care, utilities, and staples topped the leaderboard.  Recent cyclical outperformers realized sizeable losses on the day, including a 2.91% decline on the S&P 500 Energy Sector Index and a 1.56% loss on the Financial benchmark.  The Russell 2000 Small Cap Index, which has seen significant gains in just the past couple of weeks, ended the session lower by 2.37% as traders sold into early morning strength.  The reversal candlestick was realized around its declining 200-day moving average and previous horizontal support, now resistance, at $143.  This is an extremely pivotal point for the ETF and risk-sentiment in general.  As cyclical sectors play catch-up to the boarder market, reaching levels of resistance, there is a risk that traders opt to book profits following the recent run .  A rejection from levels of resistance overhead could lead to the re-allocation away from risk-on plays back towards the defensive bets, such as what was observed on Thursday.  We’ll be monitoring accordingly.

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On the economic front, a report on US durable goods orders was released before Thursday’s opening bell.  The headline print indicated that new orders declined by 17.2% last month, which was stronger than the consensus analyst estimate that called for a decline of 18.2%. Core capital goods orders, however, showed a decline that was more muted, falling by 5.8% for the month, which was much stronger than the consensus analyst estimate that called for a drop of 10.0%. Stripping out the seasonal adjustments, the value of manufacturers’ new orders for durable goods industries actually declined by 26.4% in April, which is more than double the 11.7% decline that is average for this spring month. The year-to-date change is now down 30.8% through the first four months of the year, which is a significant gap compared to the 6.5% decline that is average through this time of year.  We sent out further insight to subscribers intraday, including what sectors the report suggests are fundamentally supported.  Subscribe now to be included on our distribution list.

Value of Manufacturers' New Orders for Durable Goods Industries Seasonal Chart

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.85.

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Seasonal charts of companies reporting earnings today:

Canopy Growth Corporation Seasonal Chart Big Lots, Inc. Seasonal Chart LATAM Airlines Group S.A. Seasonal Chart CIRCOR International, Inc. Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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