Stock Market Outlook for January 19, 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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BJ’s Restaurants Inc. (NASD:BJRI) Seasonal Chart
Nautilus Group, Inc. (NYSE:NLS) Seasonal Chart
Stag Industrial Inc. (NYSE:STAG) Seasonal Chart
TWC Enterprises Limited (TSE:TWC.TO) Seasonal Chart
The Markets
Stocks struggled and bond prices surged on Wednesday as weaker than expected economic data poured cold water on the prospect of a soft landing following ongoing monetary policy tightening on the part of the Fed. The S&P 500 Index closed down by 1.56%, erasing early session gains and showing a sharp rejection from declining trendline resistance at 4000. The benchmark is back testing its rising 50-day moving average, but, with evidence of a lower short-term high below the December peak, there is little confidence that it will be able to hold as a point of support as we progress through this period of seasonal weakness for the broader equity market. Momentum indicators continue to show signs of upside exhaustion following the recent upturn from the start of the year lows. The Relative Strength Index (RSI) is rolling over below declining trendline resistance and MACD is still showing lower highs following the summer rally that peaked in August. While a weekly close below 3877 would be required to flip our Neutral rating that we have held of the S&P 500 Index through the fourth quarter to Avoid, the rejection from declining trendline resistance that is seen on the daily chart is providing compelling evidence to suggest caution of domestic equities, something that we have been alluding to anyways in recent reports.
Today, in our Market Outlook to subscribers, we discuss the following:
- Breakout of the intermediate treasury bond ETF above its 200-day moving average
- Equity ETFs turning lower from horizontal resistance
- Retail ETF reversing from declining trendline resistance
- Waning downside momentum of the US Dollar
- US Retail Sales
- US Industrial Production
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Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.23.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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