Stock Market Outlook for July 6, 2023
REITs are finally moving beyond declining trendline resistance as the second period of strength for the sector gets underway.
*** 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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KLA Corp. (NASD:KLAC) Seasonal Chart
Qorvo, Inc. (NASD:QRVO) Seasonal Chart
Alpha and Omega Semiconductor Ltd. (NASD:AOSL) Seasonal Chart
iShares U.S. Consumer Services ETF (NYSE:IYC) Seasonal Chart
SPDR Global Dow ETF (NYSE:DGT) Seasonal Chart
Arch Coal, Inc. (NYSE:ARCH) Seasonal Chart
The Markets
Stocks closed mixed on Wednesday as core-cyclicals struggled following a weaker than expected headline print of factory orders for May. The S&P 500 Index closed down by a mere two-tenths of one percent, continuing to hold above Friday’s upside open gap around 4400 and support at the rising 20-week moving average. Major moving averages continue to fan out, providing characteristic of a bullish trend and highlighting a number of points of reference below that may act as support should near-term volatility materialize. Momentum indicators are showing similar bullish traits above their middle lines. The only knock against the market, technically, at this point is that evidence of a short-term parabolic rise persists, which could make the benchmark vulnerable to a retracement towards major moving averages below, but seasonal tendencies through the middle of July suggest that stocks should remain resilient and the higher risk of decline is likely to be seen as the period of volatility in stocks ramps up in August and September. The breakout of the approximately 400-point span between 3800 and 4200 projects an upside target towards 4600, or just over 3% above present levels. The fundamental backdrop to the economy still presents plenty of reason for concern, but there are still areas to target within portfolios that check the three prong to our apporach. Our list of Accumulate candidates, according to our weekly chart books, is available to subscribers below.
Today, in our Market Outlook to subscribers, we discuss the following:
- Defensive/Interest-rate sensitive segments of the market catching a bid and our proffered bet in these sectors
- Our weekly chart books update including the list of segments of the market to either Accumulate or Avoid
- US Construction Spending and how to play the above average trend of non-residential spending
- US Factory Orders and what it has to say about exposure to core-cyclical sectors this summer
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for July 6
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Want to know which areas of the market to buy or sell? Our Weekly Chart Books have just been updated, providing a clear Accumulate, Avoid, or Neutral rating for currencies, cryptocurrencies, commodities, broad markets, and subsectors/industries of the market. Subscribers can login and click on the relevant links to access.
- Currencies
- Cryptocurrencies
- Commodities
- Major Benchmarks
- Sub-sectors / Industries
- ETFs: Bonds | Commodities | Equity Markets | Industries | Sectors
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Sentiment on Wednesday, as gauged by the put-call ratio, ended neutral at 0.96.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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