Stock Market Outlook for March 11, 2025
Don’t be the hero trying to catch a falling knife, but lookout for these signs of capitulation to buy the dip.
*** 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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Moody’s Corp. (NYSE:MCO) Seasonal Chart
UGI Corp Holding Co. (NYSE:UGI) Seasonal Chart
Five9 Inc. (NASD:FIVN) Seasonal Chart
Invesco S&P International Developed Quality ETF (AMEX:IDHQ) Seasonal Chart
SandRidge Energy, Inc. (NYSE:SD) Seasonal Chart
Dropbox, Inc. (NASD:DBX) Seasonal Chart
The Markets
The selloff in stocks continues into the new week amidst ongoing economic uncertainties as the tariff war continues to heat up. The S&P 500 Index shed 2.70%, falling and closing below below support around the 200-day moving average (5734) for the first time since October of 2023. A declining short-term trend remains intact now that the benchmark is below the trading range it was in previous between 5830 and 6100. A simple sign to suggest that the market is moving beyond this short-term declining path is if the benchmark is able to close above the high of the prior day, something that has not been seen since February 19th. At some point, a checkback of resistance at the declining 50-day moving average (5975) is reasonable and likely, at which point the true health of the intermediate-term trajectory of stocks can be determined. Markets that are showing greater resistance than support must be avoided, a framework, on an intermediate-term scale, we have not seen yet. Momentum indicators on the daily chart have negatively diverged from price since the middle of last year, highlighting the waning enthusiasm investors had been expressing towards tech-heavy (Mag-7) benchmarks, like this, amidst extreme valuations. For now, the drawdown in the market can still be viewed as healthy and ordinary within a bull market, by any measure, but scrutiny is certainly warranted now that some critical levels are being tested, such as 5700 on the S&P 500 and levels around 73,000 for Bitcoin. Below these thresholds, more dire scenarios for risk assets must be considered. We continue to monitor the potential impact of the apparent rotation in the market on our list of candidates in the market to Accumulate and to Avoid and we have adopted more of a neutral stance as segments that were previously noted as Accumulate candidates fall off (eg. Technology) and as areas to Avoid are added.
Today, in our Market Outlook to subscribers, we discuss the following:
- Things to lookout for to identify capitulation and a tradable low in stocks
- Our weekly chart books update, as well as our list of all segments of the market to either Accumulate or to Avoid
- Other Notes
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Sentiment on Monday, as gauged by the put-call ratio, ended close to neutral at 0.95.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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