Stock Market Outlook for July 13, 2022
As we wait for the latest read of consumer prices, gauges of inflation expectations continue to decline as commodity prices slide.
*** 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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Diageo PLC (NYSE:DEO) Seasonal Chart
Baidu, Inc. (NASD:BIDU) Seasonal Chart
PennyMac Financial Services, Inc. (NYSE:PFSI) Seasonal Chart
iShares MSCI All Peru Capped ETF (NYSE:EPU) Seasonal Chart
Invesco 1-30 Laddered Treasury ETF (NASD:PLW) Seasonal Chart
The Markets
Stocks drifted lower on Tuesday as investors started to sniff out what Wednesday’s Consumer Price Index (CPI) report may reveal. The S&P 500 Index closed down by nine-tenths of one percent, reaching back to its declining 20-day moving average that was broken as a level of resistance last week. Momentum indicators are starting to show signs of rolling over again around the mid-point of their ranges, keeping their characteristics of a bearish trend intact. The slide in recent sessions continues to be realized from around the upper limit to the declining wedge pattern, which continues to hint of waning selling pressures, something that the positive divergence with respect to MACD also expresses. The apex of the pattern can be pinpointed around 3500 by the start of September and the buy point to the setup would be deemed upon a breakout of the upper limit of the narrowing range. Our bias is that we see this breakout in the present quarter, but this is merely speculation at present and we will let the price action tell the final story.
Today, in our Market Outlook to subscribers, we discuss the following:
- The sharp plunge in the price of oil and the pivotal point for the commodity
- The classic leading indicator to an economic recession triggers again
- The NYSE McCellan Summation Index
- Declining inflationary expectations
- The rise of Wholesale Inventories
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Sentiment on Tuesday, as gauged by the put-call ratio, ended neutral at 0.98.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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