Stock Market Outlook for June 5, 2024
The divergence of the price of oil compared to the average trend of strength over the past couple of months highlighting the market’s skepticism pertaining to the demand profile of the commodity (and the strength of the economy) moving forward.
*** 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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Orex Minerals Inc. (TSXV:REX.V) Seasonal Chart
Santacruz Silver Mining Ltd. (TSXV:SCZ.V) Seasonal Chart
CoreCard Corporation (NYSE:CCRD) Seasonal Chart
The Markets
Stocks closed mixed on Tuesday as risk aversion in the market continues to grip trading activity. The S&P 500 Index closed with a gain of just over a tenth of one percent, making incremental upside progress above support at 20 and 50-day moving averages. The 100-day moving average continues to underline the positive intermediate-term trend, but topping patterns on the charts of core-cyclical segments of the market and evidence of waning buying demand around these record heights threatens a violation of the significant level below as the off-season for stocks progresses. Negative momentum divergences on the chart have failed to confirm the higher levels above the March peak and a double-top setup is the risk, a pattern that would forecast a test of the rising 200-day moving average at 4782. The equity market had an excellent “on-season” between October and May and now is the time to pay the piper as economic momentum cools and as traders shy away from risk. Seasonally, the middle of June tends to encompass one of the weakest periods of the year for stocks (see out monthly outlook), providing little reason to be aggressive in the equity market until closer to the end of the month.
Today, in our Market Outlook to subscribers, we discuss the following:
- The significant tone of risk aversion in the market
- The divergence of the price of oil versus the seasonal norm
- Job Openings and Labor Turnover Survey (JOLTS)
- US Construction Spending and the fading glow in this segment of the economy
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Sentiment on Tuesday, as gauged by the put-call ratio, ended slightly bullish at 0.93.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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