Stock Market Outlook for October 20, 2022
Housing starts showing the weakest year-to-date trend since 2007 as the economy was moving towards the Great Financial Crisis.
*** 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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Landmark Bancshares, Inc. (NASD:LARK) Seasonal Chart
Beam Global (NASD:BEEM) Seasonal Chart
Invesco S&P SmallCap Information Technology ETF (NASD:PSCT) Seasonal Chart
Fang Holdings Ltd. (NYSE:SFUN) Seasonal Chart
Autoliv, Inc. (NYSE:ALV) Seasonal Chart
Carlisle Cos, Inc. (NYSE:CSL) Seasonal Chart
Rockwell Automation (NYSE:ROK) Seasonal Chart
Microchip Technology Inc. (NASD:MCHP) Seasonal Chart
ITT Inc. (NYSE:ITT) Seasonal Chart
Honeywell International, Inc. (NASD:HON) Seasonal Chart
The Markets
Stocks slipped on Wednesday as rising rates and a stronger dollar kept the market under pressure. The S&P 500 Index shed two-thirds of one percent, charting a rather indecisive doji candlestick around the recently broken 20-day moving average at 3672. Momentum indicators continue to point higher with both RSI and MACD positively diverging from price over the past few weeks, signalling waning selling pressures. The 50-day moving average overhead around 3900 continues to be viewed as the logical test within the context of a market that is still showing an intermediate-term trend of lower-lows and lower-highs. Using the hurdle as a point to sell into in order to alleviate equity exposure continues to be seen as appropriate until such point as the direction of this variable hurdle curls back higher. By the end of the year, however, we are looking at the prospect of an overshoot of the 50-day towards declining trendline resistance below 4200, but we will take things one step at a time.
Today, in our Market Outlook to subscribers, we discuss the following:
- The breakout of treasury yields
- The shifting trend of the relative performance of bonds over stocks and what we are doing about it
- Sectors that are charting double bottom lows heading into periods of seasonal strength
- Interest rate sensitive sectors continuing to weaken as per seasonal norms for this time of year
- US Housing Starts
- Canada Consumer Price Index (CPI)
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for October 20
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Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.02.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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