Stock Market Outlook for January 2, 2025
The S&P 500 Index has averaged a return of 1.2% in January, however, the frequency of gains is rather muted at 58%.
*** 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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International Business Machines (NYSE:IBM) Seasonal Chart
Core Laboratories N V (NYSE:CLB) Seasonal Chart
Medicenna Therapeutics Corp. (TSE:MDNA.TO) Seasonal Chart
Boxlight Corporation (NASD:BOXL) Seasonal Chart
Tiziana Life Sciences PLC (NASD:TLSA) Seasonal Chart
Note: With the New Year’s Day holiday on Wednesday, our next report will be released on Thursday. Happy New Year!
The Markets
Ongoing end-of-year rebalancing amidst low volume holiday trade continued to weigh on equity markets in the last session of 2024. The S&P 500 Index ended lower by 0.43%, hovering just below the 50-day moving average (5942). The benchmark remains above the previous level of horizontal support at the open gap charted following the US Election at 5850. While we continue to rely on this point as the propping level for the strength that is normal during this holiday period, there is still much to be contemplated pertaining to the near-term trend given the sharply negative candlesticks charted during the last two hours of trade a couple of weeks ago following the FOMC announcement. If you recall, it is within the one-day range of that volatile Wednesday session that we have expected the Santa Claus rally period to trade within and this is certainly proving to be the case. Zooming out, a head-and-shoulders topping pattern can be picked out based on the declines produced over the past four sessions, but, given the low volume environment that we are within during this holiday timeframe, the significance of this topping setup is certainly diminished. The bearish pattern proposes a downside target of 5670, which was the level of resistance from this summer’s high. Neckline support at 5850 would have to be definitively broken, first, to achieve the downside potential that the pattern suggests. More important is the resistance that is being derived at the 20-day moving average, sufficient to raise concern. Should major moving averages increasingly derive points of resistance, reason to conclude the shift of trend would be provided. Our list of candidates in the market to Accumulate and to Avoid remains appropriately positioned at this seasonally strong time of year, but our Avoid list has been growing in recent weeks given the fading of the election euphoria in the market.
Today, in our Market Outlook to subscribers, we discuss the following:
- Monthly look at the large-cap benchmark
- The volatility that is normal at the start of the year
- Average tendency for stocks in January
- Securities that have gained or lost in every January over their trading histories
- The change in home prices and the coincident quality that this indicator has for the economy and equity market
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for January 2
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Just Released…
Our monthly report for January is out, providing you with everything that you need to know to navigate the market through the month(s) ahead.
Highlights in this report include:
- Equity market tendencies in the month of January
- Beware the US Dollar
- Post-election year influence on the US Dollar
- Post-Election Tendency for stocks
- Low return, low volatility during post election years
- Yields during post election years
- One coincident indicator of a market downfall has been triggered, but the conditions are likely not in place to fuel a dramatic decline in prices
- Drill Baby Drill
- Energy sector
- Consumer Holiday Ho Hum
- Too much product to sell this holiday season
- Discretionary consumer momentum the weakest it has ever been for November
- Industrial Production
- Our list of all segments of the market to either Accumulate or Avoid, along with relevant ETFs
- Positioning for the months ahead
- Sector Reviews and Ratings
- Stocks that have Frequently Gained in the Month of January
- Notable Stocks and ETFs Entering their Period of Strength in January
Subscribers can look for this 114-page report in their inbox and, soon, in the report archive.
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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.78.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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