Stock Market Outlook for March 21, 2022
Best weekly return for the S&P 500 Index since November of 2020, however, with tremendous supply overhead on the benchmark, there are questions pertaining to how sustainable the rebound rally will be.
*** 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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ProShares Ultra Real Estate (NYSE:URE) Seasonal Chart
SPDR S&P Global Infrastructure ETF (NYSE:GII) Seasonal Chart
iShares Global Infrastructure Index ETF (NASD:IGF) Seasonal Chart
Invesco DWA Emerging Markets Momentum ETF (NASD:PIE) Seasonal Chart
SPDR Dow Jones Global Real Estate ETF (NYSE:RWO) Seasonal Chart
SandRidge Energy, Inc. (NYSE:SD) Seasonal Chart
Boardwalk Equities, Inc. (TSE:BEI/UN.TO) Seasonal Chart
Genesco, Inc. (NYSE:GCO) Seasonal Chart
Newell Brands Inc. (NASD:NWL) Seasonal Chart
Maxar Technologies Ltd. (NYSE:MAXR) Seasonal Chart
North West Co. Inc. (TSE:NWC.TO) Seasonal Chart
BP Amoco PLC (NYSE:BP) Seasonal Chart
The Markets
Stocks continued to claw their way higher on Friday as the negative positioning in the market unwinds heading into the end of the quarter. The S&P 500 Index posted a return of 1.17%, moving above short-term resistance at 4400 and charting the first higher-high of significance this year. Intermediate resistance at the declining 50-day moving average has now been broken and the 200-day moving average at 4470 is now the test. There is an elevated likelihood of a reaction to this long-term level of resistance, particularly given that this hurdle was not really tested in the evolution of moving average tests on the way down. There is a saying on Wall Street that nothing good happens of the market when below this significant hurdle, so we cannot underemphasize the significance of this test. Fortunately, however, we are seeing a market for the first time this year that is more willing to break beyond levels of short and intermediate term resistance, which is something that we had been seeking in order to gain confidence that the systematic selling in the market has concluded. We ramped up equity exposure in the Super Simple Seasonal Portfolio during the week prior to this abrupt and significant rebound, just as others were stampeding the opposite direction. Taking advantage of the market when it is at extremes and adopting a contrarian view has historically proven to be a sound investment strategy and it has proven to be that for us. The headline risks in this market remain extreme and we will have to consider the speed of the mean reversion in the market to contemplate our next move, but, for now, tuning out the headlines and the pundits and focussing on the three prongs to our strategy has been effective.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the S&P 500 Index
- The percent of stocks above 50 and 200-day moving averages
- US Existing Home Sales
- Canada Retail Sales
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Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.80.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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