Stock Market Outlook for April 5, 2024
We have reached the end of withdrawal season for Natural Gas and, due to the abnormally mild winter temperatures, inventories exit this high demand period in a position of excess.
*** 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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American Century STOXX US Quality Growth ETF (AMEX:QGRO) Seasonal Chart
Donnelley Financial Solutions, Inc. (NYSE:DFIN) Seasonal Chart
Camping World Holdings, Inc. (NYSE:CWH) Seasonal Chart
VanEck Vectors Environmental Services ETF (NYSE:EVX) Seasonal Chart
iShares Global Healthcare ETF (NYSE:IXJ) Seasonal Chart
CALAMOS Convertible and High Income Fund (NASD:CHY) Seasonal Chart
Paycom Software, Inc. (NYSE:PAYC) Seasonal Chart
Evertec, Inc. (NYSE:EVTC) Seasonal Chart
Credit Acceptance Corp. (NASD:CACC) Seasonal Chart
Aberdeen Global Income Fund Inc. (AMEX:FCO) Seasonal Chart
Boyd Group Income Fund (TSE:BYD.TO) Seasonal Chart
United States Natural Gas Fund (NYSE:UNG) Seasonal Chart
Autonation, Inc. (NYSE:AN) Seasonal Chart
Credit Suisse High Yield Bond Fund (AMEX:DHY) Seasonal Chart
U.S. Physical Therapy, Inc. (NYSE:USPH) Seasonal Chart
The Markets
Stocks gave up earlier gains on Thursday to trade sharply lower amidst headlines highlighting escalating geopolitical tensions that sent the price of oil to new multi-month highs. The S&P 500 Index closed down by 1.23%, charting a significant outside reversal candlestick and breaking below short-term support at the 20-day moving average (5188). This is the first evidence of a short-term topping setup that has been charted in this bull market run from the October of 2023 low and it emphasizes the buying exhaustion that has been portrayed by momentum indicators for the past few months. The market still has much more work to do to suggest an intermediate-term top, which is of most importance to us in our seasonal mandate, but investors may be content to stepping back in the near-term while uncertainty over the path of interest rate policy and geopolitical instability capture headlines. Potential points of support below include the 50-day moving average at 5076, along with the open upside gap that was charted following the NVIDIA surge in February between 4983 and 5038. At some point this year, a full blown correction of around 10% will pull the benchmark back to its previous breakout point between 4600 and 4800, but this is more likely to be seen during the off-season for stocks between May and October. Until that point, through the month of April, there is still reason for a positive bias of equities until signs of an intermediate-term topping pattern develop.
Today, in our Market Outlook to subscribers, we discuss the following:
- The lack of enthusiasm investors are expressing towards stocks
- Weekly Jobless Claims and the health of the labor market
- What to expect for March’s Non-Farm Payroll report
- The end of Natural Gas withdrawal season and the seasonal trade in the commodity
- Investor sentiment
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Sentiment on Thursday, as gauged by the put-call ratio, ended bearish at 1.04.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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