Back-to-back weekly indecision candlesticks on the chart of the S&P 500 Index continues to highlight upside exhaustion.
*** 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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Super Simple Seasonal Portfolio
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The Markets
Stocks closed lower on Friday as the momentum in the formerly hot technology trade loses its glow. The S&P 500 Index closed lower by two-thirds of one percent, pulling back to short-term support at the 20-day moving average (5095). A distinct rollover of Stochastics, RSI, and MACD from overbought territory can be seen as these momentum indicators continue to diverge from the direction of price, a sign of upside exhaustion. An ultra-short-term double top can be picked out on the chart of the large-cap benchmark just below 5200, a setup that would project a downside move to 5010 should support at 5095 become violated. The digestion of recent strength that is now playing out is expected to persist through the next week and a half as portfolio managers re-balance their books ahead of the end of the first quarter. Strength in the final hours of the quarter amidst portfolio window dressing and fund inflows through the month of April are slated to re-impose buying demand shortly, ideally following a rest and reset of the upward trajectory in the days ahead.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
