Stock Market Outlook for April 22, 2024
Highly abnormal March declines in business loans and shipping volumes are signalling caution for the trajectory of the economy heading through the normally upbeat period in the spring.
*** 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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Rave Restaurant Group, Inc. (NASD:RAVE) Seasonal Chart
FlexShopper, Inc. (NASD:FPAY) Seasonal Chart
Upland Software Inc. (NASD:UPLD) Seasonal Chart
Gabelli Utility Trust (NYSE:GUT) Seasonal Chart
RumbleOn, Inc. (NASD:RMBL) Seasonal Chart
PagSeguro Digital Ltd. (NYSE:PAGS) Seasonal Chart
Capital One Fncl Corp. (NYSE:COF) Seasonal Chart
Green Dot Corp. (NYSE:GDOT) Seasonal Chart
MFA Financial Inc. (NYSE:MFA) Seasonal Chart
BlackRock Muni Income Fund (NYSE:BLE) Seasonal Chart
Valvoline Inc. (NYSE:VVV) Seasonal Chart
Goosehead Insurance, Inc. (NASD:GSHD) Seasonal Chart
The Markets
Stocks closed significantly mixed on Friday as an ongoing rotation away from the technology sector dragged on growth heavy benchmarks, such as the S&P 500 Index and Nasdaq Composite. The S&P 500 Index ended down by nine-tenths of one percent, closing February’s upside gap between 4983 and 5038, now testing the rising 100-day moving average at 4934. Faster moving momentum indicators have been pointing to an oversold state over the past couple of sessions and now some of the slower momentum indicators, such as Relative Strength Index (RSI), are getting to the same point. At 31.29, the RSI is at the lowest level since last October, doing an effective job to reset the overbought condition that was stubborn into the end of 2023 and through the first couple of months of 2024. Gradually, characteristics of an intermediate-term (multi-month) bullish trend are being lost now that a wide array of momentum indicators have fallen below their middle lines and moving averages have started to converge on one another. But as has been highlighted in recent reports, the health of the prevailing intermediate-term trend is never decided by the first short-term pullback, but rather by the strength of the rebound, something that we are on the lookout for now that our downside target at February’s (NVIDIA) gap has been closed. The market would have to be battered with a string of negative catalysts from here to sustain the near-term selling pressures. A full-blown correction of around 10%+ down to previous levels of horizontal resistance between 4600 and 4800 is expected at some point during the off-season for stocks that runs between May and October, but there is nothing on our radar that would trigger that type of decline immediately.
Today, in our Market Outlook to subscribers, we discuss the following:
- Weekly look at the large-cap benchmark
- The defensive tilt being adopted by the market
- US Industrial Production and the themes that are working to warrant exposure in seasonal portfolios
- The mixed reads of manufacturer sentiment across the country
- Abnormal declines in business loans and shipping activity for March
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Sentiment on Friday, as gauged by the put-call ratio, ended bearish at 1.09.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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