Equity Clock

Stock Market Outlook for June 4, 2021

Reaction to short-term resistance at 4200 is becoming clear, pointing to near-term buying exhaustion.

 

 

 

*** 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:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

Canadian Western Bank (TSE:CWB.TO) Seasonal Chart

Berkshire Hills Bancorp, Inc. (NYSE:BHLB) Seasonal Chart

Splunk Inc. (NASD:SPLK) Seasonal Chart

James River Group Holdings, Ltd. (NASD:JRVR) Seasonal Chart

CNB Financial Corp. (NASD:CCNE) Seasonal Chart

 

 

The Markets

Stocks closed mixed on Thursday as weakness in the growth/momentum areas of the market offset strength in staples, utilities, energy, and health care.  The S&P 500 Index shed just over a third of one percent, continuing to show reaction to short-term resistance at 4200.  Support at the 20-day moving average around 4170 was tested at the lows of the day, drawing in buyers that were looking to buy the dip.  With the employment report slated to be released on Friday moving, seeing the benchmark pinned to its short-term moving average is a logical outcome and speaks to the desire of investors to go into the print in a neutral position for fear of what a hot number could do to interest rates.  The benchmark remains within a rising intermediate-term trend with the limits now seen around 4150 and 4350, however, action in recent weeks certainly points to a stalling of the trend, increasing the risk that we may be setup for a pullback ahead as portfolios are rebalanced ahead of the end of the month.  While momentum indicators continue to point higher, the action has been tenuous since the MACD buy signal that was recorded in the past week.  The technicals are hinting that some caution may be warranted, but we are certainly not at the point where being full-out bearish is justified.  The waning fundamental tailwind in this market, as noted in our last report, hints that the risk-reward in this market has become evenly matched, which could be the setup for a horizontal trading range through the weeks ahead.

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

• Weekly jobless claims and what the trends are saying about what to expect of the monthly payroll report
• Natural gas inventories and how we’re playing the commodity
• Petroleum inventories and our stance in the energy sector
• US Vehicle Sales and the desired way to approach the stocks of the auto manufacturers
• The interesting theme that has emerged in the auto industry and what it has to say about where we should be allocating funds
• Responding to a subscriber inquiry on the strategy surrounding REITs in the month of June

Subscribe now and we’ll send this outlook to you.

Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.67. 

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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