Stock Market Outlook for July 25, 2022
While traders debate whether the bottom for stocks is in, the more defined bottom to be constructive of may not be in the equity market at all.
*** 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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SPDR Barclays International Corporate Bond ETF (NYSE:IBND) Seasonal Chart
Invesco Dividend Achievers ETF (NASD:PFM) Seasonal Chart
IQ Global Resources ETF (NYSE:GRES) Seasonal Chart
BMO S&P/TSX Equal Weight Industrials Index ETF (TSE:ZIN.TO) Seasonal Chart
Cal-Maine Foods, Inc. (NASD:CALM) Seasonal Chart
Southwest Airlines Co. (NYSE:LUV) Seasonal Chart
Ivanhoe Mines Ltd. (TSE:IVN.TO) Seasonal Chart
WisdomTree High Dividend Fund (NYSE:DHS) Seasonal Chart
iShares Global Monthly Dividend Index ETF (CAD-Hedged) (TSE:CYH.TO) Seasonal Chart
Alpha and Omega Semiconductor Ltd. (NASD:AOSL) Seasonal Chart
The Markets
Stocks dipped to end the week as a shocking reaction to earnings from Snap led a selloff in technology on the day. The S&P 500 Index closed down by 0.93%, showing initial reaction to June’s downside gap as a zone of resistance between 3975 and 4020. The benchmark is reaching back to its recently broken 50-day moving average in what could present a critical test of the near-term attempt to shift the intermediate trend away from lower-lows and lower-highs that the benchmark has realized all year. The intermediate moving average has been pointing lower all year, keeping the downward momentum in the market intact, but should evidence of support around this zone become defined in the days/weeks ahead, it would provide something that we could pin our bets against as we navigate through what has historically been the most volatile time of year for stocks through the third quarter. Momentum indicators have cracked above their middle lines in the most meaningful way since the end of March as characteristics of a negative trend start to fade. Still, much more work is required to confirm that there is a base conducive enough to support a sustained rally in the market, but we are making progress.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark
- Bonds
- Ratio of Consumer Discretionary (XLY) versus Consumer Staples (XLP)
- Canadian Retail Sales
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for July 25
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Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.06.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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