Equity Clock

Stock Market Outlook for March 24, 2021

While the market reverts back to the mean through the end of the quarter, we have to be prepared to position our portfolios for the flip side.

 

 

 

*** 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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Amazon.com, Inc. (NASD:AMZN) Seasonal Chart

SoTHERLY Hotels Inc. (NASD:SOHO) Seasonal Chart

Altura Energy Inc. (TSXV:ATU.V) Seasonal Chart

Eaton Vance Tax-Managed Diversified Equity Income Fund (NYSE:ETY) Seasonal Chart

FS Investment Corp. (NYSE:FSK) Seasonal Chart

Tortoise Midstream Energy Fund, Inc. (NYSE:NTG) Seasonal Chart

 

 

The Markets

Stocks closed lower on Tuesday as the much anticipated quarter-end rebalance plays out in the market.  The S&P 500 Index closed down by around three-quarters of one percent, reaching back towards short-term support at the 20-day moving average.  MACD is on the verge of triggering a sell signal as the momentum indicator continues to show a trend that is diverging from price, an indication of waning buying demand and typically a precursor to a pullback.  Downside risks remain to previous horizontal resistance at 3550, while horizontal support around 3700 presents a level for the bears to contend with.  This rebalance has been long awaited and we are delighted that it is playing out, giving us the opportunity to ratchet up our risk exposure for the month ahead.

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

• The reversion to the mean amongst equity sectors
• Reversion to the mean in the bond market and how to play the asset class through the month ahead
• The normal performance of the US Dollar and what comes next
• The elevated level of the Volatility Index (VIX)
• New Home Sales in the US

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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.81.

 

 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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