Stock Market Outlook for June 16, 2022
The Fed has stepped in to increase rates at a faster pace in order to cool demand. Consumer data points to them being too late.
*** 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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Gold Fields Ltd. (NYSE:GFI) Seasonal Chart
LKQ Corp. (NASD:LKQ) Seasonal Chart
ArcBest Corp. (NASD:ARCB) Seasonal Chart
Kinross Gold Corp. (NYSE:KGC) Seasonal Chart
Invesco BLDRS Emerging Markets 50 ADR Index Fund (NASD:ADRE) Seasonal Chart
The Markets
Stocks snapped back from recent losses as investors digested the latest FOMC rate decision. The S&P 500 Index jumped by 1.46%, charting a rather indecisive doji candlestick with long upper and lower wicks. The benchmark continues to hold declining trendline support, now around 3725, as a short-term consolidation pattern becomes apparent. The downside gaps charted in recent days between 3975 and 4020, followed by Friday’s downside gap between 3840 and 3900, present logical hurdles to cap any rebound attempt in the near-term. As we enter the mean-reversion period for the market and the start of the average summer rally period, we would like to see how the reaction to these zones plays out before deploying our cash hoard back into risk (stocks). Momentum indicators are still showing characteristics of a bearish trend and major moving averages are all pointing lower, defining negative trends over multiple timeframes. Over the next couple of weeks, traders are encouraged to be on the lookout for some sizeable swings in the market as portfolio managers rebalance their books. While we would like to stick our nose out now to increase our risk exposure, the threatening setup presented by the three black crows pattern on the chart of the S&P 500 Index is enough to give us caution and force us to wait for the weight of the evidence to materialize to suggest that an upside rebound from current levels is more likely than not. We remain in this traders market and that is precisely what we continue to do.
Today, in our Market Outlook to subscribers, we discuss the following:
- S&P 500 Index alleviating the most oversold extreme since February of 2020
- Mid-term election year tendency for stocks
- US Retail Sales
- Business Inventories
- Manufacturer sentiment
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for June 16
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Sentiment on Wednesday, as gauged by the put-call ratio, ended slightly bearish at 1.03.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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