Stock Market Outlook for January 5, 2023
*** 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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Kala Pharmaceuticals, Inc. (NASD:KALA) Seasonal Chart
Fortis Inc. (NYSE:FTS) Seasonal Chart
iShares U.S. Consumer Services ETF (NYSE:IYC) Seasonal Chart
Invesco CurrencyShares Swiss Franc Trust (NYSE:FXF) Seasonal Chart
Darden Restaurants, Inc. (NYSE:DRI) Seasonal Chart
Zillow Group, Inc. (NASD:ZG) Seasonal Chart
Lindsay Corp. (NYSE:LNN) Seasonal Chart
Pentair, Inc. (NYSE:PNR) Seasonal Chart
Smith AO Corp. (NYSE:AOS) Seasonal Chart
Crescent Point Energy Corp. (TSE:CPG.TO) Seasonal Chart
Sherwin Williams Co. (NYSE:SHW) Seasonal Chart
The Markets
Stocks closed marginally higher on Wednesday as the holiday influenced grind below levels of short-term resistance continues. The S&P 500 Index closed higher by three-quarters of one percent, remaining in a tight consolidation band below its 20 and 50-day moving averages, as well as horizontal resistance at 3900. A resolution to the recent short-term range should be expected in the near-term, but a lack of catalysts to drive markets one way or the other during this slower holiday timeframe keeps a neutral short-term view intact. While there remains a couple more days to our definition of the Santa Claus rally timeframe from December 15th to January 6th, the more traditional view encompassing the days following Christmas and the first two trading days of the new year is ending with a slight gain with the large-cap benchmark up by 0.21%. November’s upside gap between 3770 and 3860 has given the benchmark a zone of support to shoot off of during this positive timeframe, but the buyers strike given the prospect of a pending economic recession has left the vast majority of traders on the sidelines. The benchmark still has to rally by around 1.1% to place our timespan of the the Santa Rally in a profitable position, which, with only two days left, is looking doubtful that it will achieve success. Seasonality beyond the Santa Claus rally period is typically negative, but with sentiment as pessimistic that it has been in recent weeks, we must stay on our toes for an opposing path given that selling pressures are typically mitigated when few in the market are left to sell, as sentiment would suggest.
Today, in our Market Outlook to subscribers, we discuss the following:
- The breakout of recent consolidation ranges for ACWX and EEM
- Job Openings and Labor Turnover Survey (JOLTs)
- US Construction Spending
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Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.12.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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