Stock Market Outlook for October 6, 2022
*** 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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New Pacific Metals Corp. (TSE:NUAG.TO) Seasonal Chart
Minim Inc. (NASD:MINM) Seasonal Chart
Raytheon Technologies Corp. (NYSE:RTX) Seasonal Chart
VanEck Vectors Semiconductor ETF (NASD:SMH) Seasonal Chart
Oppenheimer Large Cap Revenue ETF (NYSE:RWL) Seasonal Chart
US Global Jets ETF (AMEX:JETS) Seasonal Chart
Spirit Airlines, Inc. (NYSE:SAVE) Seasonal Chart
Whitestone REIT (NYSE:WSR) Seasonal Chart
The Markets
Stocks closed mildly lower on Wednesday as treasury yields and the US Dollar bounced firmly from levels of short-term support around their rising 20-day moving average. The S&P 500 Index closed down by two-tenths of one percent, trading predominantly within the span of the prior session’s range. Similar to the bond market, short-term resistance is implied at the declining 20-day moving average with the more ominous threat remaining around the declining 50-day moving average at 4000. The gains to start the month and the quarter has triggered a MACD buy signal as the momentum indicator crosses above its signal line. While we came close to realizing this positive technical signal in the first half of September, the last time this momentum indicator triggered was around the end of June, just prior to the summer rally in stocks. Momentum indicators remain embedded below their middle lines, which is characteristic of a bearish trend. Tuesday’s upside gap around 3700 remains the hurdle to shoot off of on the downside, but so long as major moving averages are pointed lower, such as the 50-day, using the hurdles as levels to sell into in order to lighten up on equity exposure is still seen as the prudent course of action until the intermediate path of the market shifts. We remain in our more “market-sensitive” core allocation to stocks in the Super Simple Seasonal portfolio, but we would look to decrease equity exposure should severe negative reaction materialize around the aforementioned levels of resistance, whether that be in the days, weeks, or months ahead.
Today, in our Market Outlook to subscribers, we discuss the following:
- The bounce of yields and the dollar index from their 20-day moving averages
- The action that we are taking in the Super Simple Seasonal Portfolio
- US Petroleum inventories and demand
- Oil and energy stocks along with the viable seasonal play in the sector through the end of the year
- US Vehicle Sales and the stocks of the auto makers
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Sentiment on Wednesday, as gauged by the put-call ratio, ended surprisingly bullish at 0.84.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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