Stock Market Outlook for June 7, 2022
Stability in the crypto market is lending itself to increased risk-taking in the equity market.
*** 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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Harley Davidson Inc (NYSE:HOG) Seasonal Chart
Kroger Co. (NYSE:KR) Seasonal Chart
Consolidated Communications Holdings Inc. (NASD:CNSL) Seasonal Chart
Centrais Eletricas Brasileiras SA (NYSE:EBR) Seasonal Chart
Corvus Gold Inc. (TSE:KOR.TO) Seasonal Chart
Sprott Physical Gold Trust (NYSE:PHYS) Seasonal Chart
The Markets
Stocks struggled on Monday as the cost of borrowing inches back to the highs of the year following Friday’s stronger than expected payroll report for May. The S&P 500 Index gained a mere three-tenths of one percent as the struggle around horizontal resistance at 4150 continues. A bull flag setup around this hurdle remains intact with the flag pole derived by the sharp gains recorded between May 25th and May 27th and the digestion/consolidation in the past five sessions representing the flag to what is typically understood to be a continuation setup. The flag portion to the setup is taking place above the recently broken 20-day moving average, which, if you recall, represents the stop to our recently ramped up equity exposure in the Super Simple Seasonal Portfolio. Intermediate resistance at the declining 50-day moving average at 4241 continues to encroach on price in what is viewed as the potential cap to the recent rebound attempt before a more pronounced digestion phase begins ahead of the start of the summer rally period. Seasonally, stocks tend to hold up during the first half of June before realizing selling pressures through the back half, but this typically follows strength through the first five months of the year. An opposing path is a fair assumption this year where weakness through the first half of June turns to strength at some point in the back half as the mean-reversion and summer rally period for stocks begins.
Today, in our Market Outlook to subscribers, we discuss the following:
- A look at the recent consolidation of stocks through an hourly chart of the S&P 500 Index
- The critical juncture for markets
- Notable ratings changes in this week’s chart books: Learn more about the rotation that is being realized below the surface of the equity market
- Break of the trend of underperformance of mid-cap stocks
Subscribers can look for this report in their inbox or by clicking on the following link: Market Outlook for June 7, 2022
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Sentiment on Monday, as gauged by the put-call ratio, ended bearish at 1.04.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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