Stock Market Outlook for May 20, 2022
The path towards an economic recession is brewing, but it is not imminent, which means there are segments of the market that we can buy.
*** 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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Cascades, Inc. (TSE:CAS.TO) Seasonal Chart
American Campus Communities Inc. (NYSE:ACC) Seasonal Chart
Entertainment Prop Trust (NYSE:EPR) Seasonal Chart
Invitae Corp. (NYSE:NVTA) Seasonal Chart
Alexandria R E Eqty, Inc. (NYSE:ARE) Seasonal Chart
Idacorp, Inc. (NYSE:IDA) Seasonal Chart
iShares NASDAQ 100 Index ETF (CAD-Hedged) (TSE:XQQ.TO) Seasonal Chart
SPDR S&P 1500 Momentum Tilt ETF (AMEX:MMTM) Seasonal Chart
The Markets
Stocks closed slightly lower on Thursday as the bulls failed to muster the troops to fuel a snap-back from Wednesday’s selloff. The S&P 500 Index ended with a loss of just less than six-tenths of one percent, still holding above the previous Thursday lows around 3860. The levels of resistance overhead remain overwhelming, while support below is isolated to the prior week’s reversal low and declining trendline support, now at 3800. Momentum indicators are still holding above the lows seen a week ago and it is not off the table that a bullish crossover with respect to MACD is revealed before the month is through, but this market really needs to see levels around the prior Thursday’s low hold in order to reinvigorate broader participation in a rebound rally attempt. Obviously, the market is on the edge at the present time.
Today, in our Market Outlook to subscribers, we discuss the following:
- Watching 3858 on the hourly chart of the S&P 500 Index
- An ideal entrance point for a volatility hedge that is gearing up for its period of seasonal strength
- Clean energy stocks
- US Existing Home Sales and the rise in the price of homes sold
- Philadelphia Fed Manufacturing Index
- Weekly Jobless Claims and the health of the labour market
- Sentiment once again reaching a bearish extreme
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Sentiment on Thursday, as gauged by the put-call ratio, ended bearish at 1.21.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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