S&P 500 Index caps off the worst first half of the year performance since 1970, but, historically, bear-market declines during the first half have warranted buying.

Stock Market Outlook for July 5, 2022

S&P 500 Index caps off the worst first half of the year performance since 1970, but, historically, bear-market declines during the first half have warranted buying.

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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Rogers Communications, Inc. (TSE:RCI/B.TO) Seasonal Chart

Richelieu Hardware Ltd. (TSE:RCH.TO) Seasonal Chart

International Business Machines (NYSE:IBM) Seasonal Chart

Royal Bank Of Canada (NYSE:RY) Seasonal Chart

Palo Alto Networks Inc. (NYSE:PANW) Seasonal Chart

Walmart Inc. (NYSE:WMT) Seasonal Chart

Bank Of Montreal (NYSE:BMO) Seasonal Chart

Note: As a result of the Canada Day holiday on July 1st and the Independence Day holiday on July 4th, our next report will be released on July 5th. Have a great long weekend!

The Markets

Stocks continued to struggle in the last session of June as recession fears top investor psychology. The S&P 500 Index closed down by just less than nine-tenths of one percent, charting another rather indecisive doji candlestick around the 3800 level that we have been hyper-focussed on in recent weeks. Resistance at the declining 20-day moving average continues to be confirmed as the evolving trend of lower-lows and lower-highs continues. This is certainly not the type of action that is representative of the average summer rally period that we find ourselves in. The benchmark is reaching back towards declining trendline support that now sits just above 3650. Declining trendline resistance can be pegged just above 3900. MACD continues to show a positive divergence compared to price, highlighting that the downside momentum is waning, but this gives little comfort when the bulls refuse to show up. A break of levels of resistance overhead is, quite obviously, required to entice broader participation in order to fuel a sustained rally attempt.

Today, in our Market Outlook to subscribers, we discuss the following:

Equity market performance following bear market declines (~20%) through the first half of the year

Stocks that have gained or lost in every July over their trading history

Weekly jobless claims and the health of the labor market

Margin debt in investment accounts

Canada GDP, the performance of the TSX, and the bright spot that is being realized in the Canadian economy

Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for July 5

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Just released…

Our monthly report for July is out, providing all of the insight that is essential from the perspective of our three-pronged approach (seasonal, technical, fundamental) for the month(s) ahead.

Highlights in this report include:

Equity market tendencies in the month of July

Favor bonds or stocks?

The two weakest periods in the equity market

Opportunity emerging to ramp up exposure to the ultra large-caps

Trading the period of seasonal volatility ahead

The Summer Rally

What the playbook has to say

Peak in the Fed’s balance sheet

Jump in home inventory

Consumer demand destruction becoming confirmed

Falloff of consumer demand forcing retailers to shed unnecessary payrolls

Prices of necessities keeping inflationary pressures elevated as the prices of discretionary items level off

High prices forcing consumers to make purchases on credit

Declining manufacturer sentiment

Industrial Production still trending strong

Downside targets achieved

The segments of the market that led the downside momentum through the first half of the year have stopped falling

Biotech

Opportunities outside of the US

Positioning for the months ahead

Sector Reviews and Ratings

Stocks that have Frequently Gained in the Month of July

Notable Stocks and ETFs Entering their Period of Strength in July

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With the new month upon us and as we celebrate the release of our monthly report for July, today we release our screen of all of the stocks that have gained in every July over their trading history. While we at Equity Clock focus on a three-pronged approach (seasonal, technical, and fundamental analysis) to gain exposure to areas of the market that typically perform well over intermediate (2 to 6 months) timeframes, we know that stocks that have a 100% frequency of success for a particular month is generally of interest to those pursuing a seasonal investment strategy. Below are the results:

And how about those securities that have never gained in this seventh month of the year, here they are:

*Note: None of the results highlighted above have the 20 years of data that we like to see in order to accurately gauge the annual recurring, seasonal influences impacting an investment, therefore the reliability of the results should be questioned. We present the above list as an example of how our downloadable spreadsheet available to yearly subscribers can be filtered.

Sentiment on Thursday, as gauged by the put-call ratio, ended close to neutral at 0.95.