Stock Market Outlook for January 3, 2024
Last year’s winners are turning into this year’s laggards.
*** 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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Laboratory Corporation of America Holdings (NYSE:LH) Seasonal Chart
Philip Morris Intl Inc. (NYSE:PM) Seasonal Chart
Integra LifeSciences Holdings Corp. (NASD:IART) Seasonal Chart
Transcontinental Realty Investors Inc. (NYSE:TCI) Seasonal Chart
Invesco S&P International Developed Low Volatility ETF (AMEX:IDLV) Seasonal Chart
ProShares VIX Mid-Term Futures ETF (NYSE:VIXM) Seasonal Chart
Kala Pharmaceuticals, Inc. (NASD:KALA) Seasonal Chart
The Markets
Stocks had a tough showing in the first session of the new year as former growth darlings came under pressure amidst a normal start of the year rotational pattern towards the prior year’s laggards. The S&P 500 Index closed down by just less than six-tenths of one percent, continuing to show sluggish momentum around the all-time high that was charted two years ago around 4800. MACD remains on a sell signal following the bearish crossover that was realized last week and the Relative Strength Index (RSI) is showing a short-term divergence versus price, hinting of upside exhaustion around these heights. These are short-term signals of a near-term pause in trajectory, which could last merely days or weeks; the intermediate-term trend, supported by major moving averages, continues to lean positive. The 20-day moving average just below 4700 is a good initial downside target should the pullback in the market proceed, but the more logical hurdle remains previous resistance, now support, at 4600. The market is still within the traditional Santa Claus rally period that runs through the first couple of days of the year and, despite a very strong December performance for the market, there is still a risk of seeing a flat to negative Santa Claus rally return. As highlighted in a recent study, a negative result at this time of year when stocks tend to realize the positive drift amidst the slower holiday timeframe has portended poorly for equity market performance through the month of January and the first quarter overall, not to mention that below average full year performance for the large-cap benchmark is the norm. Our definition of what the Santa Claus rally encompasses spans the remainder of this week and, after Tuesday’s decline, the benchmark only has half of one percent of upside leeway before a negative return for this typically upbeat timeframe is realized.
Today, in our Market Outlook to subscribers, we discuss the following:
- The gap lower in Technology to start the new year
- Strength in core-defensive segments
- The gap higher in the US Dollar Index and what this could entail for stocks
- Our weekly Chart Books update, along with all segments of the market to either Accumulate or Avoid
- US Construction Spending and how to play the fundamental trend
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for January 3
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Want to know which areas of the market to buy or sell? Our Weekly Chart Books have just been updated, providing a clear Accumulate, Avoid, or Neutral rating for currencies, cryptocurrencies, commodities, broad markets, and subsectors/industries of the market. Subscribers can login and click on the relevant links to access.
- Currencies
- Cryptocurrencies
- Commodities
- Major Benchmarks
- Sub-sectors / Industries
- ETFs: Bonds | Commodities | Equity Markets | Industries | Sectors
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Just released…
Our monthly report for January is out, providing you with everything that you need to know heading into the month(s) ahead.
Highlights in this report include:
- Equity market tendencies in the month of January
- Rebound in stocks being fueled by an injection of liquidity in the market
- Credit Conditions Improving
- Equity Market performance during Election Years
- Average performance of stocks during recessionary years
- Struggling loan activity
- Retail Employment showing the weakest November change since the Great Financial Crisis
- Consumer Spending: Retail Sales
- Inversion of the yield curve
- Bond Market
- How Low can the yield on the 10-Year Treasury Note go
- The tendency for Bond Yields during Election Years
- Notable shift in the inflationary backdrop heading into the end of the year
- Average path of Consumer Prices during Election Years
- Election Year tendency for Gold
- Equity Market Breadth Expansion
- REITs
- US Dollar
- Our list of all segments of the market to either Accumulate or Avoid, along with relevant ETFs
- Positioning for the months ahead
- Sector Reviews and Ratings
- Stocks that have Frequently Gained in the Month of January
- Notable Stocks and ETFs Entering their Period of Strength in January
Subscribers can look for this 109-page report in their inbox and in the report archive.
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Sentiment on Tuesday, as gauged by the put-call ratio, ended close to neutral at 0.94.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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