Stock Market Outlook for October 18, 2022
A near-term peak in the US Dollar is lending itself to strength in stocks. Find out how high we think stocks may rebound in today’s report.
*** 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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Interpublic Grp Of Cos (NYSE:IPG) Seasonal Chart
Teradyne, Inc. (NASD:TER) Seasonal Chart
Cineplex Inc. (TSE:CGX.TO) Seasonal Chart
Audiovox Corp. (NASD:VOXX) Seasonal Chart
West Fraser Timber Co. Ltd. (TSE:WFG.TO) Seasonal Chart
The Markets
Stocks jumped to start the new week as strong bank earnings helped to alleviate some of the negativity that has flourished in recent weeks. The S&P 500 Index closed with a gain of 2.65%, continuing to show wild daily swings around the June low of 3636. The benchmark is back testing its declining 20-day moving average, a hurdle that traders have been using to sell into during recent weeks given the ongoing trend of lower-lows and lower-highs. The stage is being set for a rebound beyond this short-term hurdle to test levels of intermediate resistance, such as the 50-day moving average, in the weeks ahead. On Friday, we indicated that we are likely at logical levels for equity benchmarks to attempt to peg a low for the strongest time of the year for stocks that begins this month and the recent difficulty by the bears to push stocks lower attests to the potential near-term shift of trend. Positive momentum divergences have been recorded on the Relative Strength Index (RSI) and MACD over the past couple of weeks, signalling waning selling pressures. The 50-day moving average currently sits at 3923, or almost 7% above Monday’s close, presenting a logical level to see tested as earnings season takes the focus off of interest rate headwinds. As has been highlighted, using major moving averages, such as the 20 and 50-day, as hurdles to sell into remains appropriate until such point that the intermediate trend shifts definitively.
Today, in our Market Outlook to subscribers, we discuss the following:
- Near-term peak in the US Dollar and the levels to shoot off of
- The change we are making to the Super Simple Seasonal Portfolio
- CASS Freight Index and our view of stocks in the Transportation sector
- Empire State Manufacturing Survey
- Ratings changes in this week’s chart books: Find out what we have upgraded to Accumulate this week and how to play it via an ETF
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for October 18
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Sentiment on Monday, as gauged by the put-call ratio, ended neutral at 0.99.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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