Stock Market Outlook for October 6, 2023
Short-term breadth indicators indicate that this market is oversold around levels of significant support.
*** 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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El Pollo Loco Holdings, Inc. (NASD:LOCO) Seasonal Chart
New Pacific Metals Corp. (TSE:NUAG.TO) Seasonal Chart
Texas Roadhouse Inc. (NASD:TXRH) Seasonal Chart
Southern First Bancshares, Inc. (NASD:SFST) Seasonal Chart
Retail Opportunity Investmnt Corp. (NASD:ROIC) Seasonal Chart
The Markets
Stocks closed slightly lower on Thursday as investors continue to make a stand around levels of significant support for many benchmarks. The S&P 500 Index shed just over a tenth of one percent, continuing to hold above the horizontal band of support between 4100 and 4200, along with the rising 200-day moving average. The MACD histogram continues to narrow, highlighting the fading of near-term selling pressures around the levels of significance below. Resistance can continued to be pegged around the 20 and 50-day moving averages at 4364 and 4428, respectively. Treasury yields and the US Dollar Index are rolling over from overbought territory, according to the Relative Strength Index (RSI), conducive to achieving a short-term low in stocks; the sustainability of any rebound attempt remains in question so long as both of these headwinds retain a positive slope over an intermediate-term timeframe. Scrutinizing the bond and currency market reaction following the release of the non-farm payroll report on Friday will be prudent.
Today, in our Market Outlook to subscribers, we discuss the following:
- Short-term breadth indicator suggests an oversold market
- Longer-term breadth indicators raise questions as to the sustainability of any strength beyond an oversold bounce
- Weekly jobless claims and the health of the labor market
- A preview of what to expect for September’s Non-Farm Payroll report
- High-yield spreads elevating off of their lows
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Sentiment on Thursday, as gauged by the put-call ratio, ended overly bearish at 1.30.
Seasonal charts of companies reporting earnings today:
- No significant earnings scheduled for today
S&P 500 Index
TSE Composite
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