Equity Clock

Stock Market Outlook for September 26, 2022

*** 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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FedEx Corp. (NYSE:FDX) Seasonal Chart

Gibraltar Steel Corp. (NASD:ROCK) Seasonal Chart

Werner Enterprises, Inc. (NASD:WERN) Seasonal Chart

Kronos Worldwide Inc. (NYSE:KRO) Seasonal Chart

NXP Semiconductor N.V. (NASD:NXPI) Seasonal Chart

iShares China Large-Cap ETF (NYSE:FXI) Seasonal Chart

Global X China Financials ETF (NYSE:CHIX) Seasonal Chart

iShares Global Agriculture Index ETF (TSE:COW.TO) Seasonal Chart

UBS AG (NYSE:UBS) Seasonal Chart

Emerson Electric Co. (NYSE:EMR) Seasonal Chart

Nuance Communications, Inc. (NASD:NUAN) Seasonal Chart

Hollysys Automation Technologies, Ltd. (NASD:HOLI) Seasonal Chart

XPO Logistics, Inc. (NYSE:XPO) Seasonal Chart

AAR Corp. (NYSE:AIR) Seasonal Chart

Wells Fargo & Co. (NYSE:WFC) Seasonal Chart

The Markets

Another tough day for the equity market as stocks continue to search for a floor following the more aggressive than expected Fed forecast released on Wednesday.  The S&P 500 Index shed 1.72%, quickly closing in on the June low that has been widely scrutinized by the market in terms of whether or not it will hold as support.  Momentum indicators have become oversold with the Relative Strength Index falling back below 30 for the first time since January.  Characteristics of a bearish trend have become ingrained as the 50-day moving average continues to show signs of rolling over.  The intermediate hurdle comes in around 4038, which presents a level of resistance to sell into in order to lighten up on allocations.  But, of course, the  major hurdle below is the June bottom at 3636, below which a range of support between 3200 and 3600 is the next logical point of reference, representing the range that the market benchmark traded in during the summer and fall of 2020 before breaking out.  A break below the June lows risks unleashing a flood of selling pressures, which could bring upon the aforementioned range of support in short order.  However, as ugly as things have become, we are quickly getting to levels where investors will want to consider becoming more aggressive with equity exposure given that the risk-reward has become incrementally better the cheaper that stocks have become, but as has been reiterated in our commentary, waiting for that intermediate turn remains the prudent course of action.

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

• Weekly look at the large-cap benchmark
• The breakdown in the energy sector and how to manage any allocations to this former market favourite
• The change we are enacting in the Super Simple Seasonal Portfolio given the violation of our stop level
• Investor/market sentiment
• The major requirement to remove the negative burden on stocks
• How gauges of risk are performing against their defensive counterparts
• The Volatility Index

Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for September 26

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Sentiment on Friday, as gauged by the put-call ratio, ended overly bearish at 1.35. 

Seasonal charts of companies reporting earnings today:

• No significant earnings scheduled for today. 

S&P 500 Index

TSE Composite

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