Stock Market Outlook for January 18, 2024
The derailment of China from seasonal norms risks spreading more broadly to those areas of the market that rely on strength from this region of the world at this time of year.
*** 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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Unilever PLC (NYSE:UL) Seasonal Chart
Communication Services Select Sector SPDR Fund (NYSE:XLC) Seasonal Chart
Opera Ltd. (NASD:OPRA) Seasonal Chart
The Markets
Stocks closed lower for a second day as the rise in the dollar and rates alleviates some buying demand for risk assets. The S&P 500 Index closed lower by nearly six-tenths of one percent, breaking below short-term support at its 20-day moving average (4751). A short-term double-top below significant resistance at the all-time high of 4800 is becoming increasingly apparent, a pattern that would project a downside target to 4600, more or less aligning with the level that the 50-day moving average is hovering at. Momentum indicators have resumed a short-term trend of lower-highs and lower-lows that has been playing out since December 19th, however, characteristics of an intermediate-term bullish trend remain with both MACD and RSI remaining above their middle lines. The weakness in equity prices remains aligned with what is normal through the first couple of months of the year, a period during any given year and during election years when prices tend to soften following a strong run in the year prior.
Today, in our Market Outlook to subscribers, we discuss the following:
- A renewed attempt at normalization of the yield curve and the headwind it is causing for equity prices
- Gold and Gold Miners
- The derailment from seasonal norms in China and the resulting threats on seasonal trades that typically perform well at the start of the year
- US Retail Sales
- US Industrial Production
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for January 18
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Sentiment on Wednesday, 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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