Stock Market Outlook for May 2, 2024
According to the JOLT Survey, the change in hires through the first quarter of 2024 was the weakest for a non-recessionary period in the past two decades.
*** 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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Colliers International Group Inc. (TSE:CIGI.TO) Seasonal Chart
Herbalife Nutrition Ltd. (NYSE:HLF) Seasonal Chart
Sapiens Intl Corp. N.V. (NASD:SPNS) Seasonal Chart
iShares Canadian Real Return Bond Index ETF (TSE:XRB.TO) Seasonal Chart
Horizon Technology Finance Corp. (NASD:HRZN) Seasonal Chart
Loop Industries, Inc. (NASD:LOOP) Seasonal Chart
The Markets
Stocks closed generally mixed on Wednesday amidst a wild swing in equity prices following the FOMC announcement late in the session. The S&P 500 Index closed down by around a third of one percent, giving up intraday day strength that followed the revelation that the Fed would slow its balance sheet runoff (effectively easing monetary policy) and that three cuts were still possible for the current year. A test of resistance at the 20-day moving average was realized at the peak of the session and algorithms/traders were on the ready to sell into this hurdle given the rejection that was produced in the session prior. Yet again, we are receiving further evidence of this market starting to place greater emphasis on levels of resistance as opposed to levels of support, continuing to make the market vulnerable in the short-term. Support can be seen below at the 100-day moving average (4975), a move below which would open the door to a full-blown correction of 10%+ down to previous horizontal breakout zones of 4600 and 4800. Momentum indicators have started to adopt characteristics of a bearish trend, pegging positions below their middle lines and turning off buy programs in the most meaningful way since October of last year. The near-term setup of the chart remains threatening and some are even attributing it to a bear-flag pattern based on the pullback that materialized through the month of April followed by the recent rebound. Seasonal tendencies suggest support for stocks through the first few days of May before the digestion of strength sets in through the middle of the month, therefore the window of opportunity for a rebound of stocks to play out is narrowing quick and we would certainly have to observe indications that support to the market is reinvigorating itself in order to stay exposed to the level of equity risk that has been held through the best six months of the year that started in October.
Today, in our Market Outlook to subscribers, we discuss the following:
- Job Openings and Labor Turnover Survey (JOLTs)
- Energy Supply/Demand and the seasonal trade in the sector
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Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.05
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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