Stock Market Outlook for March 28, 2022
Quarter-end mean reversion in the equity market is reaching maturity and it’s time to consider our next move.
*** 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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Donnelley R R & Sons Co. (NYSE:RRD) Seasonal Chart
Enerplus Corp. (TSE:ERF.TO) Seasonal Chart
Invesco Dynamic Oil & Gas Services ETF (NYSE:PXJ) Seasonal Chart
SPDR S&P Oil & Gas Equipment & Services ETF (NYSE:XES) Seasonal Chart
Occidental Petroleum Corp. (NYSE:OXY) Seasonal Chart
Cenovus Energy Inc. (NYSE:CVE) Seasonal Chart
Boise Cascade Co. (NYSE:BCC) Seasonal Chart
ProShares Ultra NASDAQ Biotechnology (NASD:BIB) Seasonal Chart
The Markets
Stocks closed higher on Friday, capping off another positive week for the equity market despite tremendous adversities pertaining to geopolitical tensions and rising rates. The S&P 500 Index added half of one percent, closing back at its now declining 100-day moving average. Levels above the 200-day continue to stick as support, for now, as the mean reversion into the end of the quarter seemingly defies expectations. Momentum indicators remain on the rise having broken above declining trendline resistance in the past few sessions, however, the MACD histogram has stopped expanding, hinting that the mean reversion rally has matured. We’ve certainly benefitted nicely from this end-of quarter tendency, but we are looking out for our next move.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark and our thoughts pertaining to the progression of the mean reversion trade from here
- The change we are enacting in the Super Simple Seasonal Portfolio
- A look at the risks we are watching that could set the stage for the next down-leg in stocks
- European equities
- Banks and insurance stocks
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Sentiment on Friday, as gauged by the put-call ratio, ended bullish at 0.87.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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