Stock Market Outlook for July 21, 2022
The bears will need a new General to lead their march lower if technology/growth is no longer the dominant burden on the broader market.
*** 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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WisdomTree LargeCap Dividend Fund (NYSE:DLN) Seasonal Chart
ProShares Short FTSE China 50 (NYSE:YXI) Seasonal Chart
Invesco S&P 500 BuyWrite ETF (NYSE:PBP) Seasonal Chart
SPDR S&P Bank ETF (NYSE:KBE) Seasonal Chart
BMO Aggregate Bond Index ETF (TSE:ZAG.TO) Seasonal Chart
SkyWest, Inc. (NASD:SKYW) Seasonal Chart
QUALCOMM Inc. (NASD:QCOM) Seasonal Chart
Pfizer, Inc. (NYSE:PFE) Seasonal Chart
The Markets
Stocks rallied on Wednesday as a less negative than expected report from Netflix sent traders back into the growth segments of the market that had been left for dead amidst the rising cost of borrowing this year. The S&P 500 Index gained just less than six-tenths of one percent, continuing to make progress above the upper limit to the narrowing trading range that the benchmark broke out of in the previous session. The benchmark is now making progress closing the significant downside gap that was charted in June between 3975 and 4020, which will be a significant achievement for the bulls, if overcome. Momentum indicators continue to reach higher following the recent positive divergence with respect to MACD, hinting that a shift of the negative trend that the market has been in this year is underway. There is still quite a bit of noise on the daily look as gap resistance is battled with and amidst the suggestion of a bear-flag pattern that cannot yet be dismissed, but we suspect that, at some point in the weeks ahead, we will want to increase risk exposure again. In the meantime, we are seeing benefits from our technology allocations that were implemented in the model portfolio, available to subscribers in our monthly report, on May 25th.
Today, in our Market Outlook to subscribers, we discuss the following:
- The breakout of the NASDAQ 100 ETF (QQQ)
- Beaten down technology stocks moving above short-term bottoming patterns
- Defense sectors of the market starting to struggle
- Stocks over bonds: An update to the ongoing debate
- US Existing Home Sales
- Canada Consumer Price Index
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for July 21
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Sentiment on Wednesday, as gauged by the put-call ratio, ended close to neutral at 0.95.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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