Stock Market Outlook for June 21, 2024
The Technology sector has become the most overbought since September of 2020 and near-term digestion of strength attributed to the end of quarter mean reversion period is certainly reasonable.
*** 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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Synopsys, Inc. (NASD:SNPS) Seasonal Chart
Innergex Renewable Energy Inc. (TSE:INE.TO) Seasonal Chart
Tricon Residential Inc. (TSE:TCN.TO) Seasonal Chart
Rollins, Inc. (NYSE:ROL) Seasonal Chart
Sirius XM Holdings Inc. (NASD:SIRI) Seasonal Chart
J.P. Morgan Chase & Co. (NYSE:JPM) Seasonal Chart
Federal Realty Investment Trust (NYSE:FRT) Seasonal Chart
Arch Capt. Grp. Ltd. (NASD:ACGL) Seasonal Chart
Matson, Inc. (NYSE:MATX) Seasonal Chart
iShares Silver Bullion ETF (TSE:SVR.TO) Seasonal Chart
The Markets
Stocks closed mixed on Thursday as portfolio managers conduct their end of quarter portfolio re-balancing, pulling allocations back to within the limits of investment policy guidelines. The S&P 500 Index ended down by a quarter of one percent, charting a bit of a reversal candlestick after earlier gains failed to hold through the closing bell. Support can continue to be pegged at the rising 50-day moving average (5226), providing an effective stop for the summer rally trade that begins, on average, in about a week from today. Momentum indicators are showing very early signs of peaking in overbought territory with the Relative Strength Index still firmly embedded above 70, typically a characteristic of a bullish trend. Thus far, the market has managed to mitigate the weakness that typically coincides this end of quarter timeframe, but with signs of mean reversion starting to materialize, we cannot rule out seeing more days like this before the quarter comes to a close.
Today, in our Market Outlook to subscribers, we discuss the following:
- Mean reversion into the end of the second quarter and the most overbought level for the technology sector in years
- Precious metals on the move
- The change we are making in the Super Simple Seasonal Portfolio
- Weekly Jobless Claims and the health of the labor market
- US Housing Starts and the stocks of homebuilders
- Manufacturer sentiment
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Sentiment on Thursday, as gauged by the put-call ratio, ended bullish at 0.87.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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