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Stock Market Outlook for March 27, 2020


Dow Jones Industrial Average triggers a MACD Buy signal as it achieves the accepted classification of a bull market.

 

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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Loews Corp. (NYSE:L) Seasonal Chart

Pason Systems, Inc. (TSE:PSI.TO) Seasonal Chart

American Intl Group, Inc. (NYSE:AIG) Seasonal Chart

Dollar General Corp. (NYSE:DG) Seasonal Chart

Worthington Industries, Inc. (NYSE:WOR) Seasonal Chart

RPC, Inc. (NYSE:RES) Seasonal Chart

Peapack-Gladstone Financial Corp. (NASD:PGC) Seasonal Chart

Royal Dutch Shell Plc. B Shares (NYSE:RDS-B) Seasonal Chart

Scientific Games Corp. (NASD:SGMS) Seasonal Chart

Herman Miller, Inc. (NASD:MLHR) Seasonal Chart

Invesco DWA Healthcare Momentum ETF (NASD:PTH) Seasonal Chart

 

 

The Markets

Stocks gained for a third straight session on Thursday, adding to the phenomenal run since the low charted on Monday.  The S&P 500 Index closed higher by 6.24%, bringing the three-day tally to 17.55%.  The Dow Jones Industrial Average realized a gain of 6.38%, resulting in a three-day return of 21.3%.  If 20% is the widely accepted hurdle for a bear market decline and a bull market run, this market has gone from bear market to bull market in less than a week.  Clearly, this is not normal.  The action is characteristic of a bear market with wild swings realized on a daily basis.  We highlighted in a report last week that rotation in market like this can be extremely detrimental to long-term portfolio performance, if not done correctly.  Investors that sold last week and into the start of this week are now looking at prices that are significantly higher than the price they received from the transaction.  Fortunately, we have been moving in the opposite direction, buying at the end of last week when others were selling and removing our hedges in order to be exposed to the upside rebound.  Admittedly, we didn’t execute on our playbook that we delivered to our subscribers as precisely as we would have liked given that we still have some cash on the books.  We have used over half of the over 40% cash hoard that we had maintained throughout the month of March and we remain in good shape to claw our way back towards even.  We’ve provided further insight on this, as well as analysis of the weekly report of jobless claims and the seasonal trade in natural gas in our subscriber exclusive market outlook emailed daily.  Don’t miss these valuable insights.  Subscribe now.

Even with the apparent re-birth of the bull market, at least for the Dow Jones Industrial Average, one key indicator of market breadth has barely budged.  The percent of stocks in the S&P 500 trading above their 50-day moving averages bottomed on March 12 at 1.00 and rebounded to 1.20 as of Wednesday.  The close on Thursday was 3.21, which is still barely a blip considering levels below 20 are generally considered to be oversold.  It is remarkable that even after a 20% rally in three sessions that nearly all stocks remain below their major moving averages.  For stocks below the 200-day moving average, the proportion is presently 9.2%, remaining around the lowest levels since 2009.  When the percent of stocks above their 200-day moving averages is below 62.5%, prolonged periods of volatility have typically followed.  We are still a long way from achieving market stability.

Sentiment on Thursday, as gauged by the put-call ratio, ended close to neutral at 0.97.

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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