Stock Market Outlook for September 21, 2022
Unlike the US, Canada is showing that shelter inflation is rolling over, something that the broader equity market has been seeking to confirm that the worst of inflationary pressures have past.
*** 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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DENTSPLY Intl Inc. (NASD:XRAY) Seasonal Chart
EVI Industries, Inc. (AMEX:EVI) Seasonal Chart
Eagle Bancorp Montana, Inc. (NASD:EBMT) Seasonal Chart
First Trust Small Cap Value AlphaDEX Fund (NASD:FYT) Seasonal Chart
ProShares Short High Yield (NYSE:SJB) Seasonal Chart
Planet Fitness, Inc. (NYSE:PLNT) Seasonal Chart
The Markets
Stocks closed lower on Tuesday as investors braced for the Fed event on Wednesday. The S&P 500 Index closed down by 1.13%, continuing to hold below rising trendline support that was broken last week. Resistance can still be pegged at the 20 (~3993) and 50-day (~4041) moving averages, the latter of which continues to feel the pull on its recent rising path given that price is now firmly below. The Relative Strength Index remains in a rising trend, hinting of the same for stocks as indications persist that selling pressures have alleviated. Of course, the pivotal Fed announcement on Wednesday will have much to say about the near and intermediate-term path of stocks moving forward. The consensus in the market still appears overwhelmingly bearish, expressing that investors are already positioned for a negative outcome, therefore the better risk-reward may be to bet on a bullish outcome. We are staying on the fence in our low volatility equity allocation in the Super Simple Seasonal Portfolio and will seek the intermediate low in the market that will signal that risk-taking is now prudent. The benchmark is presently within a range of support between the June lows at 3636 and the recently broken 3900, a range that is still being looked upon as providing a base to our back-half of the year rebound following first half of the year weakness forecast.
Today, in our Market Outlook to subscribers, we discuss the following:
- The breakout of the 10-Year Treasury Yield, the breakdown in price, and the strategy for the position as the seasons change
- The rally in shares of Apple on Tuesday and the optimal holding period for the stock
- US Housing Starts and the stocks of the home builders
- Canada Consumer Price Index (CPI)
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Sentiment on Tuesday, as gauged by the put-call ratio, ended neutral at 0.97.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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