After the fourth weakest March performance for stocks in the past five decades, history suggests a strong recovery through April is likely.
*** 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 reversed early declines to end higher on Monday following a retest of the mid-March lows on the S&P 500 Index at 5500. The S&P 500 Index closed higher by just over half of one percent, charting a hammer candlestick around the the significant horizontal hurdle and starting to lend to the belief of a short-term double-bottom in the works. The benchmark remains in a precarious state heading into the second quarter, holding levels below the 200-day moving average, a variable hurdle that traditionally provides a reasonable dividing line between long-term bullish and bearish trends. A check-back of the now declining resistance at the 50-day moving average (~5900) has been our base case, but headline risks have to be contended with in the very near-term. We are still in this period of seasonal strength that runs into the month of April, therefore there is a bias to give this favourable timeframe the benefit of the doubt; the more likely time to see a resumption of the declining intermediate-term path for stocks is through the off-season that starts in May. We have not made any changes to our Super Simper Seasonal Portfolio, yet, following our tactical positioning to take advantage of the positivity that surrounds the end of the quarter, but we are cognizant that the intermediate-term trajectory (most importance to us in our work) is becoming increasingly threatened. We continue to monitor the potential impact of the apparent rotation in the market on our list of candidates in the market to Accumulate and to Avoid and we have adopted more of a neutral stance as segments that were previously noted as Accumulate candidates fall off (eg. Technology) and as areas to Avoid are added.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
