Stock Market Outlook for March 30, 2016 - Flex (NASDAQ:FLEX)

S&P 500 Index solidifying support at 2020 as it moves in on the next major hurdle around 2080.

Real Time Economic Calendar provided by Investing.com.

**NEW** As part of the ongoing process to offer new and up-to-date information regarding seasonal and technical investing, we are adding a section to the daily reports that details the stocks that are entering their period of seasonal strength, based on average historical start dates. 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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Flextronics International Ltd. FLEX Seasonal Chart

The Markets

Stocks jumped on Tuesday following cautious comments from Fed Chair Janet Yellen, who indicated that a "somewhat lower path for the federal funds rate" would be required given the "developments abroad." The S&P 500 Index moved back towards the highs of the year, maintaining support at both the 20 and 200-day moving averages, which have now converged. The benchmark continues to solidify horizontal support at 2020, providing investors a level to trade against in the context of the short and intermediate-term trend. Next hurdle overhead is implied around 2080, representing the late December peak just prior to the downturn into the new year. This level also tracks long-term trendline resistance that is derived by connecting the peaks from last summer and fall. The market is slowly breaking down the long-term barriers that had been implying downside risks, such as with the break above the declining 200-day moving average, and now the next major milestone is the fall highs, which if exceeded would bring an end to the trend of lower-highs and lower-lows on a long-term scale. The short-term trend, as gauged by the direction of the 20-day moving average, remains firmly positive, while the intermediate-term trend, as gauged by the direction of the 50-day average, continues to show an emerging positive path. At some point, a test of this intermediate moving average should be expected.

The dovish comments from the Fed chief put significant pressure on the US Dollar Index, which dipped back towards the lower limit of the intermediate declining trend channel. The 20 and 50-day moving averages continue to trend lower, giving bias toward a negative short and intermediate-term trend. A declining US Dollar presents a significant tailwind for stocks and commodities, supporting the risk on trade. Trend channel support for the currency benchmark currently hovers around 94.30, limiting downside potential over the near-term.

On the economic front, a report on house prices for January was released. According to S&P/Case-Shiller, the 20-city index of house prices increased by 0.8% in the first month of the year, marginally better than the consensus estimate of a 0.7% gain. Stripping out seasonal adjustments, house prices were unchanged (0.0%), slightly below the average increase for January of 0.1%. House prices have been gaining above average since 2011, the last year that the house price index posted a full year decline. This trend of above average price growth does not appear to be ending anytime soon with exceptionally low borrowing costs and a healthy labour market supporting the housing market. While the first "tick" to the year is below average, very little can be concluded from it as fluctuations in either a positive or negative direction during the winter months is normal.