Stock Market Outlook for June 7, 2023
S&P 500 Index testing an important Fibonacci retracement level of last year’s decline.
*** 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
Gold Fields Ltd. (NYSE:GFI) Seasonal Chart
goeasy Ltd. (TSE:GSY.TO) Seasonal Chart
Centrais Eletricas Brasileiras SA (NYSE:EBR) Seasonal Chart
York Water Co. (NASD:YORW) Seasonal Chart
Murphy USA Inc. (NYSE:MUSA) Seasonal Chart
iShares Core 10+ Year USD Bond ETF (AMEX:ILTB) Seasonal Chart
Global X Nasdaq 100 Covered Call ETF (NASD:QYLD) Seasonal Chart
Dynamic iShares Active U.S. Dividend (TSE:DXU.TO) Seasonal Chart
The Markets
Stocks closed marginally higher on Tuesday as the rally in stocks starts to broaden out amidst the mean reversion that we have been expecting for the month of June. The S&P 500 Index closed with a gain of just less than a quarter of one percent, remaining above the band of resistance that was broken last week between 4100 and 4200. Major moving averages are maintaining an upward slope, providing support to the rising trend between 4000 and 4100. The benchmark is approaching an important Fibonacci level of last year’s pullback around 4300, which represents a 61.8% retracement of the over 1300-point decline that was realized between January and October of 2022. The hurdle closely aligns with the last major high charted in August of last year, presenting the next formidable hurdle for traders to contend with. So far reaction remains muted, but, in this mean reversion month of June, some kind of digestion around this hurdle appears probable.
Today, in our Market Outlook to subscribers, we discuss the following:
- Traders plowing into some of this year’s laggards as the mean reversion phase in the market gets underway
- Using covered call ETFs during this mean reversion period
- Pipelines
- US Vehicle Sales and the stocks of the producers
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Sentiment on Tuesday, as gauged by the put-call ratio, ended slightly bullish at 0.90.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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