Equity Clock

Stock Market Outlook for May 13, 2021

Consumer prices are surging this year, warranting the need for inflation hedges in portfolios.

 

 

 

*** 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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Simon Property Group, Inc. (NYSE:SPG) Seasonal Chart

Omnicell Inc. (NASD:OMCL) Seasonal Chart

Lions Gate Entertainment Corp. (NYSE:LGF/A) Seasonal Chart

W.P. Carey and Co. Llc (NYSE:WPC) Seasonal Chart

Trimas Corp. (NASD:TRS) Seasonal Chart

Park National Corp. (AMEX:PRK) Seasonal Chart

RH (NYSE:RH) Seasonal Chart

Regional Management Corp. (NYSE:RM) Seasonal Chart

Sientra, Inc. (NASD:SIEN) Seasonal Chart

Direxion Daily India Bull 3x Shares (NYSE:INDL) Seasonal Chart

Direxion Daily S&P Biotech Bull 3x Shares (AMEX:LABU) Seasonal Chart

 

 

The Markets

Stocks plunged following a strong report on consumer prices in the US, fuelling concerns that inflationary pressures in the economy are running out of control and that the Fed will be forced to alleviate its easy-money policy sooner than later.  The S&P 500 Index shed 2.14%, falling back to the lower limit of the rising intermediate-trend channel that has supported the benchmark since the Fall.  Recall, levels down to the 50-day moving average (~4050) remain fair in order to remain confident that the rising intermediate-term trend is intact, but, admittedly, we are also watching the rising 100-day moving average (~3930) as a potential test to washout euphoric investor sentiment.  While initial shock declines in stocks are one thing (often difficult to predict), reaction to levels of resistance are typically more actionable and indicative of the direction that investors want to send the market.  A bounce and rejection from levels of resistance overhead, such as the 20-day moving average, would change the short-term trajectory of the market, warranting action to mitigate the downside threat.  For now, all we have is a market that is still obeying the limits of a rising intermediate range, keeping a trend of higher-highs and higher-lows intact.  The period between May and September is known for its erratic trading, but this timeframe does not suggest that being an equity investor is automatically a losing bet.  A mix of offence and defense is typically the way to go, something that is certainly helping us to stay ahead of the performance of the broader market.

Today, in our Market Outlook to subscribers, we discuss the following:

• US Consumer Price Index and what drove the headline increase in the month of April
• The need for inflation hedges in portfolios and the investments that will do it
• The long-term trend for bond prices and why it is not automatically a given that prices will sell off
• An alternative to a bond market allocation this summer
• US Petroleum Status and our stance on the energy sector

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Sentiment on Wednesday, as gauged by the put-call ratio, ended neutral at 0.98.

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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